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Verizon Jumps Into Satellite-to-Cell Market With AST SpaceMobile 

By Rachel Jewett | May 29, 2024

      Rendering of an AST SpaceMobile satellite. Photo: AST SpaceMobile

      AST SpaceMobile just added a second major mobile network operator (MNO) partner in the U.S. — announcing a $100 million deal with Verizon on Wednesday. Verizon is now a strategic partner of AST SpaceMobile, making a $100 million commitment for satellite direct-to-cellular service for its customers. 

      This is Verizon’s first move in terms of satellite-to-cell connectivity and a win for AST SpaceMobile. The three top wireless providers in the U.S. now have satellite partners. Verizon and AT&T are working with AST SpaceMobile, and T-Mobile is working with SpaceX.

      This news also comes two weeks after longtime partner AT&T signed a commercial agreement to provide direct-to-cell service with a $20 million revenue commitment. 

      AST SpaceMobile CEO Abel Avellan said the company now has access to 850 MHz spectrum that covers 100% of the continental United States. He called the deal with Verizon a “transformational commercial milestone.” 

      “This partnership will enhance cellular connectivity in the United States, essentially eliminating dead zones and empowering remote areas of the country with space-based connectivity,” Avellan said in a news release. 

      The $100 million Verizon commitment includes $65 million ​of​ commercial prepayments, $45 million of which are subject to certain conditions, and $35 million of convertible notes.

      Verizon commented that this is part of its strategic spectrum strategy. 

      “By entering into this agreement with AST, we will now be able to use our spectrum in conjunction with AST’s satellite network to provide essential connectivity in remote corners of the U.S. where cellular signals are unreachable through traditional land-based infrastructure,” Srini Kalapala, senior vice president of Technology and Product Development at Verizon said in a release. 

      AST SpaceMobile’s business model is to partner with MNOs and operate its satellite direct-to-cell service using the spectrum of partner MNOs to serve their customers. The company hasn’t shared specifics of how its services will be sold, but executives have said the packages will allow users to receive text, voice, full broadband internet, and they are priced accordingly depending on the amount of service. 

      AT&T put out a statement on the Verizon deal, hinting that the company was involved in the decision to work with Verizon. 

      “AST SpaceMobile’s news today reinforces the shared commitment to providing nationwide space-based broadband direct to everyday cell phones. Together with AST SpaceMobile we have agreed to welcome another mobile operator in the U.S. to bring in more spectrum and more coverage to create an even better solution and enhance service capabilities. With AST and the other partners around the globe we are shaping the future of connectivity for all,” Chris Sambar, head of Network for AT&T said in a statement shared with Via Satellite

      While AST SpaceMobile is moving ahead to launch five satellites that it says will offer non-continuous service across the U.S., it still does not have market access from the FCC to operate in the U.S. Execs have said they are optimistic about FCC approval. 

      There are different approaches to deliver satellite-to-cell connectivity. AST SpaceMobile and SpaceX’s approach is to use MNO partner spectrum. Other approaches involve using licensed satellite spectrum and making changes on the phone/chip side to communicate with satellite. Apple used this approach for its emergency messaging service, and the Mobile Satellite Services Association (MSSA) is advocating for the same approach.