AT&T, Verizon, and T-Mobile Join Forces on Satellite Connectivity

Full Transcript

Don Kellogg 0m10s

Hello, and welcome to the two hundred and ninety sixth episode of The Week with Roger, a conversation between analysts about all things telecom, media, and technology by Recon Analytics. I'm Don Kellogg, and with me as always is Roger Entner. How are doing, Roger?

Roger Entner 0m22s

I'm good. How are you?

Don Kellogg 0m24s

I'm good. So we had some interesting news that hit the wire last week. There's a new joint venture between all three of the big wireless carriers. You wanna tell us about it?

Roger Entner 0m35s

Yeah. So AT&T, Verizon, T Mobile announced the intent to form a joint venture to advance d to d communication direct to device. What they're going to do is they are going to donate spectrum. They're gonna work on harmonizing terrestrial connectivity part for satellite providers. And that will allow consumers to have a much more seamless experience in rural America.

Roger Entner 1m8s

It will allow them to have less dead zones regardless of what carrier they're with. And especially in disasters, we will have a much more resilient network. And so the neat thing here is, you know, that there's competition on the ground, and there's cooperation in the sky for the benefit of all Americans. And so that makes it then also a lot easier for different satellite network constellation providers to provide connectivity because the way that it connects into the network becomes standardized. And so AST, LEO, Starlink, you name it, are all connecting seamlessly and in the same way in a standardized way into the network.

Roger Entner 2m0s

Should make it a lot more interesting.

Don Kellogg 2m1s

Well, the interesting thing is they all maintain their individual agreements with respective satellite providers as well. Right?

Roger Entner 2m9s

Correct.

Don Kellogg 2m9s

So this is kind of an overlay or fallback or shared whatever you wanna call it. Yeah. It's a backstop, really.

Roger Entner 2m16s

It's a backstop, and it's like the way we connect today to 911 with a mobile device. When you turn on an old device without service, you can call 911. The phone will connect to whatever network is available. So this is like that universal connectivity regardless of provider and regardless of satellite constellation. Or that's at least what they're envisioning.

Don Kellogg 2m45s

Right. And you'd need to have a phone that can talk to the satellite. Right? Which is That would help. Newer models.

Don Kellogg 2m51s

Right?

Roger Entner 2m51s

Yeah. 2023, 2024 is, like, all the newer models have, like, satellite connectivity capability. But, I mean,

Don Kellogg 3m0s

this is gonna end up saving lives. Right? Because somebody will be out in the middle of nowhere and be able to call for help.

Roger Entner 3m5s

That's the idea.

Don Kellogg 3m6s

One of the use cases. Right? It's like hikers that get injured, that sort of thing.

Roger Entner 3m11s

Yeah. And so, you know, normally, we measure consumer benefit in dollars and cents. Here, we can measure it in lives. This will then also enable fewer coverage gaps. Again, this is like dead zones, not dead spots, and will give us a joint remote network capability.

Roger Entner 3m31s

I think it's a great thing. Right?

Don Kellogg 3m33s

Yeah. I agree. I agree. What are the implications for kind of the individual satellite providers? I know there's a lot of noise about Starlink right now, and you've you've written quite a bit about satellite recently.

Don Kellogg 3m44s

We'd love to get your take.

Roger Entner 3m45s

Yeah. We have, like like, half a dozen of Starlink and SpaceX reports coming, I think, the week of this. There's a lot of buzz around Starlink and, you know, rightfully, because of the lead that they have in the market. I view this a little bit like the lessons from the electric vehicle time. When we go back several years, every manufacturer had their own plug, and they were trying to work on a common standard.

Roger Entner 4m15s

And in the end, the common standard was was Tesla's because they also had the most

Don Kellogg 4m21s

Largest installed base. Yeah.

Roger Entner 4m22s

And the largest charging base. Exactly. And so here, I think what they want to be avoided is that the whole connectivity layer is controlled by Starlink. You have to admire Starlink. You have to admire Elon Musk, the man who's a visionary who makes visions real.

Roger Entner 4m44s

Right? Unbelievable work ethic, unbelievable execution. At the same time, he doesn't play well with others. You know? You can see this in the courtroom with this conflict with OpenAI right now.

Roger Entner 4m59s

Right? And so I think nobody wants to live in a or not a lot of people wanna live in a world that's being controlled by Elon Musk. And so this is in a way an attempt to have the basic connectivity to be standardized across everybody.

Don Kellogg 5m16s

Well, it also removes an advantage that Starlink Mobile theoretically could have at some point. Right?

Roger Entner 5m21s

Or in reality has. They could set the standard, and everybody else needs to follow. Standard should be set by all the stakeholders with the respective input, and then that the best connectivity is actually working out. The other interesting thing is this will become almost de facto the global standard because The US is doing this before anybody else, and it's going to do it with more satellite providers than anybody else, and almost all of them or many of them are American. And they will be implemented in the phones.

Roger Entner 5m58s

And so it becomes quite likely that the Europeans and other countries will follow suit. I would imagine them becoming also members. And what's really nice about this, this is open to anybody and everybody. Nobody's too large. Nobody's too small.

Roger Entner 6m15s

And make this work out.

Don Kellogg 6m16s

Right? I mean, I think it's also interesting because, I mean, at some level, this could be the end of the coverage wars. Right? Because at some point, once you get out of the middle of nowhere, you lose signal, satellite turns on. Right?

Don Kellogg 6m26s

So no more holes in the network at some level.

Roger Entner 6m29s

At some level, no more holes in the no more areas. I think in urban markets, you will still have a differentiated experience based on coverage because of the interference issues in in high

Don Kellogg 6m42s

Well, I think I think there's some tuning issues to be had too. Right? I mean, was on the Starlink T Mobile beta, and one of the things that was kind of frustrating sometimes was if you'd get into a dead zone, it would try to switch over to satellite and then you're stuck on satellite for a minute or two and before it switched back. Exactly. When it actually kind of triggers, think is something and and, you know, I'm sure T Mobile's and Starlink have done some work on it since then.

Don Kellogg 7m6s

But when it triggers, I think, is really important as well because you don't want it just triggering when you go into a tunnel somewhere and then have failing to hand off back. Right?

Roger Entner 7m14s

Yeah. And and the thing is, like, how quickly does it hand over? I don't think that you can dynamically, during a call, hand over from a terrestrial network to a satellite network and back. In four g and five g, it is break before make. And so one of the reasons why a lot of calls drop is exactly that.

Roger Entner 7m37s

Technically speaking, when you are moving from one cell site to the next cell site. Say you and I are talking, and one of us is moving from one cell site coverage into the next cell site coverage. Technically speaking, without us knowing, the call is broken, and then it's reconnected in the same cell site. And that is happening in few milliseconds. When this handover doesn't work, that's when the call drops.

Roger Entner 8m7s

And so when you're driving and you're talking and the call drops, that's what happened. You moved from one cell site to the next cell site. It broke the connection and it didn't reconnect it. With the link budgets with satellites, this is a lot, lot more difficult. Now, in 2027, when we will have five g non terrestrial network standards, And, for example, Starlink will come out with gen two satellites.

Roger Entner 8m35s

When he has enough satellites, there's a very, very good chance that they can do Vaulty or VONR through satellites. And that's a whole different ballgame. Today, with Gen one Starlink satellites, yes, you can do video calling. Yes, you can do voice calling, but only with WhatsApp or other VoIP platforms who have a much more tolerant latency budget. When you talk over satellite today, you can't do that with a regular VoLTE or VONO connection.

Roger Entner 9m8s

Just doesn't work. There are not enough satellites out there. And so that's why we don't have voice communication on satellite. But this will all come then after 2027 when we have enough satellites in the sky that they can do that, and you can actually have this.

Don Kellogg 9m23s

Well, it's certainly exciting. Kudos to the industry for getting this done. You know? And I think your point about this being kind of a leading edge technology that's gonna be adopted across the globe, hopefully, is also a good development as well. So

Roger Entner 9m36s

The important thing also to note is this is a declaration of intent, And the way to hell is paved with good intentions.

Don Kellogg 9m45s

Yeah. There there are a few cellular JVs that are in the in the graveyard, right, or in the history wireless. Right?

Roger Entner 9m52s

Yeah. And quite a few, you know, friend of the show, Walt Piecyk, took a much more cynical view on this. We're here optimistic about it. Walt talked about it and basically said, like, they've tried these things before, and it never worked out. Well, I hope this time it's different.

Don Kellogg 10m12s

Well, we'll see and definitely be monitoring it. I think this is a positive momentum from a coverage perspective and certainly from a safety perspective if they can make it work.

Roger Entner 10m20s

Yeah. Absolutely.

Don Kellogg 10m22s

Alright. We'll talk next week. Thank you.