Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Satellite telephony, the stuff of rugged terrain and far-flung wars, is going mainstream. The technology, under which satellite systems provide services to ordinary mobile devices, has seen a flurry of corporate activity. Mobile operators are striking deals to use satellites in low Earth orbit, a few hundred kilometres above earth, to deliver services in the areas their terrestrial networks cannot reach.
Vodafone of the UK has tested direct-to-device (D2D) video calls, and plans to roll out a direct-to-smartphone broadband satellite service later this year. Apple is sinking $1.7bn into Globalstar, a satellite operator, to deliver satellite-enabled services on iPhones. Elon Musk’s Starlink late last year cleared a regulatory hurdle on the road to operating a D2D service with T-Mobile. The UK’s own communications watchdog, Ofcom, is looking to lay out ground rules on mobile connectivity from space.
This is hardly a sputnik moment. In the UK, for instance, highlands and islands and stranded mountaineers aside, take-up will surely be modest. Only 7 per cent of landmass lacks 4G coverage, according to watchdog Ofcom.
Technical and regulatory issues abound, too. D2D gobbles up spectrum, a valuable commodity. Rules will be needed for sharing spectrum and possibly — given high costs — other infrastructure.
True, some regions may have greater potential, including the US where average revenues per user are more than double those of the UK, according to Karen Egan of Enders Analysis. And applications can be expanded. If you can beam direct to mobile phones, then why not laptops, cars or tractors?
For satellite operators such as Starlink, D2D could be a useful add on. The group’s global position, operating in more than 118 countries, is testament to the benefits of hitching cheap lifts on SpaceX rockets and Musk’s deep pockets. In the D2D arena, it has a proven record: 100,000-plus texts sent out, under an emergency waiver, in the wake of hurricanes.
For Apple, satellite services — for which it does not currently charge — deepen its ecosystem. They could give the latest iPhone model a glow-up, too.
While some operators may have a reason to pile in, satellite telephony will never replace mobile towers where the service is available. Texting to say you’re running late for dinner may involve far more complexity than the quotidian content implies. For now, the monetary gains are likely to be equally mundane.
louise.lucas@ft.com
