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AT&T has AST Space Mobile. T-Mobile is aligned with SpaceX. But Verizon? It’s not playing ball
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Verizon said it hasn’t seen a compelling case beyond what Apple is doing
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Verizon prefers to use its spectrum for land-based services – not space-based services
AT&T spent a good portion of its time Mobile World Congress in Barcelona bolstering its partnership with AST Space Mobile, going so far as to share space in its booth.
And T-Mobile has an agreement with Elon Musk’s SpaceX, aiming to launch a service potentially this year to cover dead spots with satellite coverage.
But Verizon is the odd one out, choosing to forego any new partnerships with satellite companies. Yes, Verizon struck a deal with Amazon’s Project Kuiper project several years ago, but it’s been mostly quiet when it comes to incorporating satellite service into its customers’ cell phones.
The question is, why?
Fierce caught up with Verizon’s Global Networks and Technology President Joe Russo and SVP of Network Planning Adam Koeppe at MWC Barcelona last week and got the skinny on the situation.
The TL;DR version is this: Verizon isn’t partnering up with anyone because it hasn't seen a great consumer demand for space-based connectivity and it doesn’t want to give up its own terrestrial spectrum when satellite companies have their own.
“Certainly, we care and we pay attention to it,” Russo said. “We like that Apple has already enabled it,” in the iPhone 14 and 15, which serves a large percentage of customers if they need the SOS service.
The key when it comes to Apple is that the tech giant is using dedicated satellite spectrum for the emergency services it offers through Globalstar. However, T-Mobile’s partnership with SpaceX uses T-Mobile’s PCS spectrum. Verizon isn’t willing to do anything like that.
“We think the best use of our spectrum is our terrestrial network. It’s the most efficient and most beneficial to customers,” Russo said. “We also watch customer demand. We’ve done several studies, I would say, asking: Do customers need this? Is this something that they’re willing to pay for? Is this something that’s valuable that they would choose?”
In the meantime, Verizon has its partnership with Project Kuiper, which is exploratory in nature and Koeppe said they’re trying to figure out how the two networks can work together. Right now, there’s not a lot going on there, but that could change.
Wait-and-see approach
This isn’t the first time Verizon has addressed its no-show status in the direct-to-device (D2D) space where satellite services are combined with cell phones.
Tim Farrar, principal analyst at TMF Associates, noted that Frank Boulben, chief revenue officer in Verizon’s Consumer Group and a former LightSquared executive, addressed it at the New Street Research/BCG conference on December 13.
Boulben said Verizon did not have a strong interest in pursuing D2D, regarding it as a complementary feature which required line of sight and has limited capacity. So, although it would play a role in “white space” areas without cellular coverage, it was only relevant for a “small fraction of customers,” according to Farrar.
Despite the frenzy around satellite-based cellular services, Farrar, a long-time satellite industry analyst, said Apple hasn’t exactly sold a lot more iPhones as a result of the satellite messaging offer.
“To me, that’s where a lot of the challenges are – in the business model,” he concluded.