AST & Science lands $100M round for satellite cell towers

Satellites extending the use and reach of terrestrial cellular networks got a whole lot more serious.  Midland, Texas-based AST & Science  announced $100 million in private funding for its SpaceMobile project with Rakuten and Vodafone leading the round, with participation from American Tower and Samsung among others.  SpaceMobile will be a low Earth orbit (LEO) satellite network connecting directly to standard smartphones.

“SpaceMobile will be particularly transformative to the growing US$1 trillion annual global mobile market because it will eliminate the coverage gaps faced by today’s five billion mobile subscribers moving in and out of connectivity every day. It will also help the world’s most under-served communities to access the latest mobile services much sooner than predicted, helping more people to access the digital economy,” said Abel Avellan, AST & Science chairman and CEO.

The SpaceMobile network will initially offer 4G services to partner networks around the world. Support for 5G will be delivered in the futures. AST & Science says the SpaceMobile network will enable seamless roaming to and from terrestrial networks at “comparable data rates” without the need for specialized satellite hardware.

Vodafone has agreed to a strategic partnership with AST & Science in addition to its investment in the company. The global carrier will contribute technical, operational and regulatory expertise in support of SpaceMobile.  Vodafone has mobile operations in 24 countries, partners with mobile networks in 42 more, and fixed broadband operations in 19 markets and as of 31 December 2019 had approximately 625 million mobile customers.

“At Vodafone we want to ensure everyone benefits from a digital society – that no-one is left behind,” Nick Read, CEO, Vodafone Group, said. “We believe SpaceMobile is uniquely placed to provide universal mobile coverage, further enhancing our leading network across Europe and Africa – especially in rural areas and during a natural or humanitarian disaster – for customers on their existing smartphones.”

Rakuten is investing in SpaceMobile as part of a broader strategy to become a leading mobile network operator in Japan and a global solution provider to markets around the world. The company, best known in the U.S. for its cashback services, says its strategic investment with AST & Science has the potential expand Japan national coverage from metropolitan to remote areas and bolster cellular networks in times of natural disaster.

AST & Science successfully tested its SpaceMobile technology aboard the BlueWalker 1 satellite, launched in April 2019, and has been further validating the technology following that initial flight. BlueWalker 1 is a 6U cubesat built for AST & Science by its NanoAvionics subsidiary. Two more satellites, presumably also built by NanoAvionics, are expected to be launched in 2020.

The new investment brings the total capital raised by AST & Science to US$128 million, including early investments from Cisneros and founder Abel Avellan.  Vodafone’s participation implies it will pitch in more in the future, but involvement by American Tower and Samsung is also significant.  American Tower is a real estate investment trust (REIT) and owner, operator and developer of wireless and broadcast towers with 41,000 properties in the U.S. and around 139,000 internationally. Samsung makes lots of cell phones and one division presented a white paper a few years ago describing a satellite broadband constellation.

Cellular phone manufacturers want to expand the utility of devices beyond traditional coverage, especially in geographic areas where there is limited or no access to service.  Sources Space IT Bridge spoke before yesterday’s announcement said there was interest in the cell phone community for solutions to provide enhanced utility and coverage. 

Operational satellites for AST & Science and Lynk will be larger than the typical 6U or 12U cubesat form factor, with the “secret sauce” likely involving deployable antennas on satellites to get around the need for modified cell phone hardware or awkward antennas on the ground. Expect to hear a lot of discussion around “link budget” – the balance between transmission power, distance and angle between satellite and ground device, and ability of antennas to receive and transmit data.

AST & Science is not the only company pursuing a “cell tower in the sky” satellite constellation. Lynk, formerly Ubiquitilink, announced the results of its first on-orbit tests at Mobile World Congress last year and has since conducted two more tests.  As of September 2019, Lynk had raised $18 million with CEO and founder Charles Miller saying there was a lot of “big money on the sidelines” available if the company met certain performance metrics.

Lynk’s initial business model relies on SMS text messaging as a first generation of services, acting either as a relay or using a store-and-forward method of moving them between phones out of coverage and back into the terrestrial cellular network. As more and more capable satellites are launched, Lynk will be able to support real-time voice and data services, but Miller said the bandwidth available per satellite made data rates of more than a few hundred kilobits per second for more than a few users impractical. A full LEO constellation providing real-time coverage for voice and data would require 1,000 or so satellites, while Lynk sees 24 or more sufficient for SMS text messaging and IoT.

Using satellite to expand cellular IoT coverage is another near-term revenue opportunity but will be much more competitive.  Lynk plans to support GSM and LTE IoT protocols, adding NB-IoT as it is deployed around the globe.  Eutelsat, OQ Technologies, and Sateliot are all planning on using cubesats to communicate with ground-based cellular devices.

AST & Science and Lynk, as well as IoT-only player OQ Technologies, all say they have unique patents for satellite-terrestrial cellular communications.  There is the possibility for an ugly legal battle or two moving forward.

Doug Mohney

Doug Mohney, a principal at Cidera Analytics, has been working and writing about IT and satellite industries for over 20 years. His real world experience including stints at two start-ups, a commercial internet service provider that went public in 1997 for $150 million and a satellite internet broadband company. Follow him on Twitter at DougonTech or contact him at dmohney139 (at) gmail (dot) com.

Leave a Reply

Your email address will not be published. Required fields are marked *