- Everyone is wondering what SpaceX’s purchase of EchoStar’s 2 GHz spectrum will mean for the entire wireless ecosystem
- A report last week suggested Apple may add support for SpaceX satellite connectivity in the next iPhone
- In a recent interview, a T-Mobile exec reiterated the company’s confidence in its partnership with SpaceX
Is Apple going to do a deal with SpaceX to support its soon-to-be-acquired EchoStar spectrum in the next iPhone? If so, what happens to Globalstar, the company that’s been supplying satellite coverage for Apple devices since the iPhone 14? And where does all this leave direct-to-device (D2D) challengers like AST SpaceMobile, which has deals with AT&T, Verizon and dozens of other operators around the world?
These are just some of the questions swirling since The Information last week published a report (subscription required) chronicling signs that Elon Musk may be negotiating anew with Apple after previous talks collapsed. It comes as Musk’s SpaceX preps to take control of the 2 GHz spectrum that it’s acquiring from EchoStar for $17 billion.
Last month, SpaceX President Gwynne Shortwell said SpaceX is working with chip manufacturers to get the proper chips into cell phones to support its new spectrum, but she didn’t name specific phone manufacturers.
The Information article certainly stoked a lot of speculation on social media over the weekend, rekindling sentiments about how Starlink is basically going to make other telecom companies obsolete. Some analysts say it’s more likely that for the foreseeable future, SpaceX/Starlink will continue to fill coverage gaps due to satellite shortcomings, like capacity and in-building coverage.
For Globalstar, the article raised alarm bells – and temporarily, its valuation. Globalstar shares were up almost 8% on Friday after the report said Globalstar Chairman James Monroe floated the possibility of selling his satellite company for more than $10 billion. Apple is an investor in Globalstar but it’s unlikely to buy the company because Apple doesn’t want to become a telecom carrier and be regulated as such, according to the report.
Fierce reached out to Globalstar for comment and will update this story if we hear back. The same goes for Apple and SpaceX.
Iridium to pivot in response to SpaceX
Globalstar is one of two U.S.-based satellite companies that survived bankruptcy in the late 1990s and early 2000s. Iridium is the other one – and last week, Iridium CEO Matt Desch told investors that his company will pivot in response to SpaceX’s purchase of the EchoStar spectrum and increased competition coming from Starlink.
That’s in part because Starlink’s ability to create a vast global satellite system is far greater than what EchoStar could have done on its own. “Frankly, they have rockets and satellites and other things that others don't have,” Desch said, according to a Seeking Alpha transcript.
“Our goal isn't [to] go straight at them and compete. It's to be complementary to them, doing things like Iridium NTN Direct, which we think has enduring value regardless of really what happens here,” Desch said on the Q3 earnings call.
A much newer satellite company, AST SpaceMobile is gunning for a piece of the D2D space with super huge satellites that promise to deliver 24/7 high-speed cellular broadband direct to unmodified cell phones.
Individual investors in AST SpaceMobile, who identify as part of the exuberant “SpaceMob,” were quick to point out on social media that carriers globally are aligned with AST SpaceMobile because they want to keep the mobile customer relationship and not hand it off to a fixed broadband rival like Starlink.
Broadly speaking, cellular carriers don’t want customers to go off their networks and onto the satellite network unless it’s the last resort, said Tim Farrar, principal of TMF Associates. (Farrar, it’s worth noting, has come under direct fire from both Elon Musk and the SpaceMob for different reasons.)
“This is going to be one of these interesting questions about how the implementation is done,” Farrar told Fierce. “Some of that is not just down to the cellular operator but it’s down to the handset manufacturer in terms of under what conditions you can go off to the satellite,” he said.
It’s a problem right now in “fringe areas” where the signal from the cellular network is not good enough to do a decent voice call, but strong enough to prevent it from diverting to the satellite.
“If you think about what SpaceX is saying about having its own spectrum and being somewhat independent of the operators, that is going to be one of these questions,” Farrar said. “It’s how you configure the phone.”
How much shaking up will Musk do?
For years, Musk has talked about shaking up the telecom industry, criticizing legacy carriers as antiquated while promoting Starlink as the latest and greatest. Earlier this year, he slammed Verizon in a row over the Federal Aviation Administration’s communications infrastructure.
Currently, T-Mobile is the only U.S. carrier to strike a partnership with SpaceX, which is providing Starlink satellite connectivity for its T-Satellite service. T-Mobile’s service works on both iPhone and Android devices.
“We’re excited about the continued journey with Starlink,” Mo Katibeh, chief marketing officer for T-Mobile’s Business Group, told Fierce on the sidelines of a recent event marking the opening of T-Mobile’s new Executive Briefing Center.
SpaceX’s purchase of the EchoStar spectrum “from our perspective, is simply a reinforcement of how important it is to eliminate dead zones, and we’re very excited to see what’s next for Starlink,” he said.
When pressed about whether U.S. carriers should be more concerned about Musk’s presence in mobile, Katibeh again stressed T-Mobile’s partnership with SpaceX. “We’re incredibly excited about the partnership journey that we’ve been on and that we continue to be on,” he said.
He alluded to something a lot of analysts point out: The amount of spectrum required to operate a successful mobile business is far more than the 50 megahertz that SpaceX is buying from EchoStar, not to mention the sheer scale of regulatory and security requirements that telecom operators need to adhere to.
In sum, he gave what we can only conclude is a politically safe answer from a wireless industry executive: “We love T-Satellite as a complement to our terrestrial,” he said.