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September 1, 2022
You might think the arrival of a heavy hitter like Elon Musk as a new competitor would be bad news for startups such as Lynk, but apparently not.
The much heralded but somewhat anticlimactic collaboration between Musk’s SpaceX and T-Mobile US, unveiled last week, brought the hitherto niche satellite-direct-to-phone industry very much into the foreground. It marked a significant evolution of the core SpaceX proposition, branded Starlink, which provides satellite-based connectivity to base stations, which can then relay that connection to individual devices.
As the name indicates, satellite-direct-to-phone cuts out that middle stage and is thus a more efficient and desirable technology provided that trick can be pulled off. We were first made aware of this possibility a year ago by a podcast guest who introduced us to US startup Lynk, which has patented technology that allows a regular phone antenna to receive a radio signal from satellites. So when Musk made his move we were naturally curious to see what Lynk CEO Charles Miller (pictured above at this year’s MWC) made of it.
“I want to personally thank SpaceX and T-Mobile for their help in marketing the existence of a solution to the ‘0G problem’,” said Miller in an interview with Telecoms.com. “Three years ago, when Lynk first started talking about this publicly, there was a lot of scepticism. The first question was ‘can you really do this?’ The second question was ‘is this really a big business?’ Both of those questions have been unequivocally answered.”
While Miller showed just the kind of defiance and bravado you would expect from the CEO of a startup when faced with a giant new competitor, that doesn’t mean he was wrong. Few people, even within the telecoms industry, were talking about satellite-direct-to-phone prior to last week’s announcement, that changed in an instant. “A whole bunch of MNOs from around the world, including T-Mobile competitors here in the US, called us the morning after this announcement,” said Miller.
The ‘0G problem’ is another term for ‘notspots’, or coverage gaps. There are, of course, plenty of other solutions to the problem, including fixed wireless access and satellite offerings like Starlink, but there’s something uniquely neat and compelling about the prospect of being to revert straight to a satellite when terrestrial coverage lets you down. Musk and T-Mobile obviously agree.
As we noted in our report on the announcement it was the softest of launches, amounting more to a set of aspirations and vague promises than anything substantial, let alone imminent. Lynk, however, expects to be providing commercial service within months. “No need for consumers to wait for years, for a ‘someday service’, it’s coming to the market later this year,” said Miller. “People don’t care whose satellite it comes from, they just will want it.”
That development still depends on FCC approval, we were told, but Miller is clearly confident that will come soon. Once those commercial services are up and running we expect Lynk to spare no effort on trying to publicly contrast itself with Musk’s plans, which still face a number of technological hurdles. We wouldn’t bet against Musk overcoming them eventually, but Lynk’s head start could prove significant.
As Miller indicated above, the other positive presented by the arrival of a high-profile competitor in your space is that it gets the attention of the wider ecosystem. T-Mobile seemed to get a publicity boost from the announcement and there was presumably more than a bit of FOMO from its direct competitors. “We have been signing one commercial MNO contract per month on average,” said Miller. “I suspect the rate of MNO contract signings is going to increase now.”
His parting shot was to flag up Musk’s fondness of disrupting industries by cutting out the middleman. “SpaceX will naturally go after the direct-to-consumer business model in most countries over the 1.9 GHz spectrum, and also in the 2.0 GHz spectrum assuming Elon can take that spectrum away from Charlie Ergen [Chairman of satellite company EchoStar],” said Miller.
“Meanwhile, Lynk will never go direct to consumer. Our strategy is to be a great partner with MNOs. This one dynamic will segment the market, naturally forcing everybody in the mobile wireless industry to become better at serving customers, and ultimately will be great for the end-consumer.” The clear inference is that Miller thinks Musk will eventually cut operators out of the loop, as he has done banks and car dealers previously.
It still remains to be seen how big the total available market is for satellite-direct-to-phone services. Such connectivity only really offers the bandwidth to do messaging right now and, without Musk’s deep pockets, Lynk will have to grow its satellite fleet organically from commercial revenues. But the potential is undeniable and the prospect of truly ubiquitous coverage, albeit of varying quality, is a seductive one for operators and subscribers alike.
As the Editorial Director of Telecoms.com, Scott oversees all editorial activity on the site and also manages the Telecoms.com Intelligence arm, which focuses on analysis and bespoke content.
Scott has been covering the mobile phone and broader technology industries for over ten years. Prior to Telecoms.com Scott was the primary smartphone specialist at industry analyst Strategy Analytics’. Before that Scott was a technology journalist, covering the PC and telecoms sectors from a business perspective.
Follow him @scottbicheno
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