Game-changer can threaten Vodacom and MTN’s business models

New technological developments that enable mobile phones to connect directly to low Earth orbit satellites are a game-changer which can threaten mobile operators’ current business models.

When Apple unveiled the new iPhone 14, it announced that its software allows the phone’s antennas to connect directly to satellites.

The service will initially be used for messaging emergency services outside of cellular or Wi-Fi coverage, but it can easily grow to other services in the future.

Apple’s announcement followed one day after Huawei announced that its Mate 50 smartphone allows users to send text messages via satellite communication.

A few platforms are already developing and testing direct-to-mobile satellite services – Lynk Global, SpaceX, AST SpaceMobile, and GalaxySpace.

In April, Lynk Global successfully launched and deployed its sixth ‘cell-tower-in-space’ satellite, Lynk Tower 1.

Lynk Global describes itself as the world’s leading satellite-direct-to-phone telecoms company, aiming to become the world’s first commercial cell-tower-in-space.

Last month, T-Mobile and SpaceX announced a partnership to bring cell phone connectivity everywhere using Starlink’s low Earth orbit (LEO) satellites.

The companies will create a new network, broadcast from Starlink’s satellites using mid-band spectrum, to offer the satellite-to-cellular service with near ubiquitous coverage.

AST SpaceMobile announced this week that its BlueWalker 3 test satellite reached orbit.

AST SpaceMobile is building the first space-based cellular broadband network accessible directly by standard mobile phones.

The BlueWalker 3 satellite launch will enable the company to start testing its satellite-to-cellular service with mobile network operators on six continents.

Vodafone and its South African subsidiary Vodacom are among its test partners.

Not to be outdone, Chinese start-up GalaxySpace launched its first low-Earth orbit (LEO) broadband satellite constellation to take on SpaceX’s Starlink service in March.

AST Spacemobile, Lynk Global, and the upcoming SpaceX V2 satellites will work directly with any standard 2G or 4G mobile device.

There is no need to build in special support as in the iPhone 14. Depending on the configuration of the satellite, it will provide messaging, voice or broadband services.

When the satellites are in place — and handsets can connect directly to them — it can change the mobile telecommunications landscape.

It will provide near-complete coverage worldwide, including in South Africa, enabling people to use satellites instead of mobile networks for basic mobile communications.

Developing nations in Africa with low mobile network penetration will benefit significantly from satellite networks.

The typical challenges with satellites — high latency and limited bandwidth — remain. However, the impact may be limited because of the growth of fibre across South Africa.

In an environment where most households and offices have Wi-Fi access through fibre, mobile communications will only be needed when travelling.

The initial application of satellite-direct-to-phone services will provide connectivity in areas where mobile networks do not have coverage.

However, it can change depending on the service levels and pricing associated with satellite services.

Mobile operators can benefit from the technology by partnering with satellite providers like Lynk Global, SpaceX, and AST SpaceMobile.

If they don’t, they may risk losing data revenue, similar to what WhatsApp did to their SMS and voice revenue.


This article was first published on Daily Investor and is republished with permission.

Now read: Vodacom and MTN’s multi-billion rand network battle

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Game-changer can threaten Vodacom and MTN’s business models