- Earlier this year, Verizon didn’t see a compelling case for satellite coverage in smartphones beyond what Apple is doing
- That all changed when it struck a deal with AST SpaceMobile in May
- Now it’s got another satellite deal to talk about: a D2D service with Skylo coming this fall
Talk about doing a 180. Six months ago, Verizon executives were skeptical about the direct-to-device (D2D) market, uninterested in using their spectrum for a satellite-based service.
That was their take at the time, even though arch rival T-Mobile was going full throttle with SpaceX and AT&T was already pinning its satellite hopes on AST SpaceMobile.
Now, Verizon is bragging about how it will be the first mobile carrier to commercially launch smartphone connectivity on Skylo’s non-terrestrial satellite network and be the first mobile carrier to launch a commercial D2D service offering.
Not only that, but it’s made a $100 million investment in AST SpaceMobile, which will use 850 MHz spectrum from Verizon (and AT&T) to offer a D2D service. And it’s talking up its ability to use Skylo’s satellite IoT technology to enable farmers to track cattle and monitor soil quality.
So what gives? Fierce caught up with Verizon’s Srini Kalapala last week. He’s the senior vice president of Technology and Product Development for Verizon.
Turns out, they just needed to find the right partner.
“Once we found the right technology partner, in this case AST, we were able to then work on a model where our spectrum gets to be used in the right manner,” both terrestrially and in space, he said. “When we figured out that we could deliver the best of both worlds, that’s when we said, ‘OK, we can work with AST.’ That’s how we came to that conclusion.”
Up until the last few months, the satellite story at Verizon revolved around backhaul and providing connectivity in extremely remote areas, usually using geostationary constellations from its satellite partners and more recently, low Earth orbit (LEO). A few years ago, Verizon struck a deal to collaborate with Amazon’s Project Kuiper on cellular backhaul for connecting rural and remote communities, but that wasn’t a D2D deal.
Flash forward to today, and Verizon’s agreement with AST SpaceMobile calls for using its 850 MHz spectrum alongside AST’s satellite network to provide connectivity in remote corners of the U.S. where cellular signals are unreachable through traditional land-based infrastructure. That’s expected to be available sometime next year.
The good part about that is every customer who has a device from Verizon today will be able to take advantage of it because 850 MHz already is supported in those devices, Kalapala said.
The Skylo model is slightly different and will be available sooner. Skylo uses L-Band spectrum dedicated for satellite use. That requires collaboration with chipset vendors as well as handset OEMs to make sure the devices are capable of taking advantage of that spectrum. It’s targeting Android devices because Apple already offers emergency SOS service on new iPhones through its deal with Globalstar.
With Skylo, Verizon plans to start offering emergency SOS service this fall, and then by early next year it will offer the ability to text anywhere via satellite for customers with select devices, according to Kalapala. Capable devices include Google Pixel models.
Sky-high ambitions
TMF Associates analyst Tim Farrar said he thinks Verizon’s new agreement with Skylo is a way to explore the D2D opportunity while not allowing T-Mobile to gain too much of an advantage. The expectation is that the T-Mobile/SpaceX service will be free, and Verizon can’t afford to charge for a messaging service that will be less capable than SpaceX and more comparable to the free Apple/Globalstar offering on iOS 18.
Farrar expects to see a commercial offering from T-Mobile before the end of the year. But he noted Elon Musk’s tweet over the weekend where Musk pointed out that the T-Mobile service is only exclusive for the first year. After that, SpaceX can support other mobile operators.
With AST’s timetable continuing to slip, the one-year exclusivity is likely to expire well before AST can even launch enough satellites to offer contiguous coverage of the U.S., he said. That raises the question: Would Verizon then consider supporting SpaceX’s D2D service instead?
If that were to happen, Verizon’s satellite ambitions would be way bigger than anyone would have imagined a year ago.