Quiver Quantitative - AT&T (T) has entered into a strategic partnership with satellite provider AST SpaceMobile (ASTS) to deliver space-based broadband directly to cell phones. This collaboration, formalized after years of cooperation under a memorandum of understanding since 2018, aims to revolutionize connectivity by launching a network of satellites to provide internet access in remote areas. As part of the deal, AST SpaceMobile will dispatch five satellites from Cape Canaveral into low-Earth orbit this summer, with commercial service expected to follow. This venture is set to run through 2030, with AT&T’s head of network, Chris Sambar, joining AST SpaceMobile’s board to solidify the partnership.
The new network will utilize ordinary mobile phones, a significant advantage over current satellite-based services that require specialized equipment. This innovation promises to provide seamless connectivity along rural roads and in remote locations like national parks, where traditional cell tower coverage is unavailable. AT&T's chief operating officer, Jeff McElfresh, highlighted the strategic importance of integrating emerging satellite technologies with their existing mobile network to offer customers uninterrupted connectivity. Abel Avellan, AST SpaceMobile's CEO, emphasized that this partnership is a crucial step in unlocking the potential of space-based cellular broadband for everyday smartphone users.
Market Overview: -AT&T and AST SpaceMobile forge a partnership to develop a space-based cellular broadband network. -AST SpaceMobile's stock price jumps nearly 33.5% in after-hours trading. -The agreement signifies a major step towards providing mobile phone connectivity in remote areas beyond cell tower reach. -This technology aims to complement existing networks and offer full data services, unlike current limited satellite communication options. -The partnership intensifies the competition in the race to deliver robust satellite-based mobile networks, with T-Mobile (TMUS) collaborating with SpaceX.
Key Points: -The collaboration extends through 2030, solidifying AT&T's strategic partnership with AST SpaceMobile. -The network will function with standard cell phones, eliminating the need for bulky specialized equipment. -AST SpaceMobile plans to launch five initial satellites this summer, laying the groundwork for commercial service rollout.
Looking Ahead: -This partnership disrupts the mobile connectivity landscape, potentially bridging the gap for unconnected populations. -The competition between AT&T-AST SpaceMobile and T-Mobile-SpaceX highlights the intensifying race for satellite-based mobile network dominance. -While details on service launch remain undisclosed, the potential for full data services beyond basic messaging suggests a significant advancement in mobile communication.
This move places AT&T in a competitive position against other wireless providers racing to expand mobile phone connectivity in hard-to-reach areas. T-Mobile has been collaborating with SpaceX's Starlink service, aiming to launch a similar satellite-based calling service this year. SpaceX, with approximately 6,000 satellites in low-Earth orbit, has already begun offering mobile phone services with its recent satellite launches. However, Elon Musk noted that technical limitations prevent this service from fully competing with existing terrestrial cellular networks. Meanwhile, Apple (NASDAQ:AAPL) (AAPL) has introduced an emergency satellite-messaging feature for iPhones, allowing users to send SOS messages without a cellular connection.
The partnership between AT&T and AST SpaceMobile is a significant development in the telecommunications industry, reflecting a shift towards leveraging satellite technology for enhanced mobile connectivity. As wireless providers continue to innovate, consumers can look forward to improved connectivity in previously inaccessible areas, marking a new era of mobile communication. This collaboration not only strengthens AT&T's position as a leader in the industry but also demonstrates the potential of satellite technology to complement and enhance traditional mobile networks.
This article was originally published on Quiver Quantitative