AT&T firms up AST SpaceMobile partnership ahead of commercial LEO launch

AT&T is another step closer to offering satellite direct-to-phone services after agreeing commercial terms with low Earth orbit (LEO) operator AST SpaceMobile.

Nick Wood

May 16, 2024

3 Min Read

The agreement paves the way for the US telco to offer non-terrestrial network (NTN) coverage via SpaceMobile's constellation until 2030. It's worth noting there is no firm launch date for SpaceMobile's network; however, AT&T said the first commercial satellites are due to be delivered to Cape Canaveral this summer.

"Space-based direct-to-mobile technology is designed to provide customers connectivity by complementing and integrating with our existing mobile network," said AT&T COO Jeff McElfresh. "This agreement is the next step in our industry leadership to use emerging satellite technologies to provide services to consumers and in locations where connectivity was not previously feasible."

The definitive commercial agreement follows on from an earlier memorandum of understanding (MoU) signed by AT&T and SpaceMobile, and is a significant milestone on a journey that began back in 2018 (although details of their partnership were not made public until 2020).

SpaceMobile has been using AT&T's spectrum to test its satellite direct-to-phone technology. A breakthrough was made last April when SpaceMobile successfully placed a call from AT&T's network in the US to Rakuten's network in Japan using an off-the-shelf Samsung Galaxy S22.

AT&T hasn't just been helping out on the technical side, it has also been helping SpaceMobile to keep the lights on.

In January, AT&T – along with Google and Vodafone – provided a combined $206.5 million in funding for SpaceMobile in the form of equity investment, convertible bonds and revenue commitments. The money is being used to support the commercial deployment of SpaceMobile's network. In addition, AT&T said that its head of network, Chris Sambar, will also soon be appointed to SpaceMobile's board.

"Working together with AT&T has paved the way to unlock the potential of space-based cellular broadband directly to everyday smartphones. We are thrilled to solidify our collaboration through this landmark agreement," said Abel Avellan, founder, CEO and chairman of AST SpaceMobile. Founder, Chairman, and CEO. "We aim to bring seamless, reliable service to consumers and businesses across the continental US, transforming the way people connect and access information."

Importantly for SpaceMobile, the sooner its network is up and running, the sooner it can start generating a return.

In 2023, SpaceMobile's operating expenses weighed in at north of $222 million, up from nearly $153 million in 2022. Plus or minus a few one-off items, full-year pre-tax losses amounted to almost $221 million.

In a quarterly update this week, SpaceMobile announced opex for the three months to 31 March of $56 million, up from $44.5 million a year earlier. However, a one-off gain helped to narrow its pre-tax loss to $39.5 million from $45.1 million.

SpaceMobile said its first five satellites should get to Cape Canaveral sometime in either July or August, and once in orbit will provide non-continuous service across the US.

It also said it is continuing to hold discussions with additional strategic partners.

"I am grateful for our global team's unwavering dedication and hard work as we prepare for the launch of our first five commercial satellites and initial commercial service," said Avellan. "We are set up for an exciting summer ahead as we push forward on all fronts of our business."

About the Author(s)

Nick Wood

Nick is a freelancer who has covered the global telecoms industry for more than 15 years. Areas of expertise include operator strategies; M&As; and emerging technologies, among others. As a freelancer, Nick has contributed news and features for many well-known industry publications. Before that, he wrote daily news and regular features as deputy editor of Total Telecom. He has a first-class honours degree in journalism from the University of Westminster.

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