A series of Verizon TV commercials ran during the early 2000s, in which the main character travelled the country in a fruitless search to expose the (non-existent) dead spots in the company’s network. A decade after the last ad aired, Americans still remember his catchphrase—“Can you hear me now?”—and, despite what the ads implied, dead spots in the cellphone network still exist. It is estimated that at any given moment around the world, roughly 780 million (15%) cellphone users are not connected.1
What has changed is that carriers no longer have to rely solely on large capital expenditures to build out cell towers to expand their networks. Today, there is a new tool at their disposal: satellites. Satellite and telecommunications companies have a history of competition, but that is starting to change with network standards for interoperability and improving satellite capabilities. As evidenced by a host of satellite-to-cell service initiatives by major companies like Apple, Vodafone and Qualcomm, the satellite industry now has a meaningful opportunity to help support the more than five billion cell phones used across the globe today.
This functionality will allow new and existing cell phones to connect, without any modification, directly to satellites, enabling text and voice capabilities. Until now, this has been the preserve of heavy and expensive handheld satellite phones. Apple has garnered the most attention with their partnership with Globalstar, offering emergency service access to iPhone 14 users. This is not just a marketing exercise—we have already seen several reports of lives being saved by this remote offering and Apple expects their $450mn investment in Globalstar’s constellation of satellites will help improve the offering. Vodafone and AT&T have also announced partnerships with satellite operator AST SpaceMobile to provide satellite-to-cell service to customers in their networks; Starlink (owned by SpaceX) announced a similar agreement with T-Mobile; and most recently, Qualcomm announced that they will be introducing chips into new Android phones that will leverage satellite operator Iridium’s constellation to provide true global connectivity.
We are finally starting to see tangible progress in closing the digital divide
With (small) cell towers costing up to $300,000 to build, and more money to maintain, expanding networks in this way becomes much less cost-effective as telecommunications companies try to cover increasingly remote areas. As satellite and chip technology advances, providing improved latency, bandwidth and connectivity, they are providing a viable alternative solution. This technology enables telecommunications companies to reach new customers with limited infrastructure costs, and increase revenue from existing customers who are willing to pay for connectivity when they travel to more remote locations. Meanwhile, the satellite operators are entering an entirely new market of billions of cell phones, providing an opportunity for the industry to scale up like never before. Recent reports have estimated that the direct-to-cell market could generate more than $90bn of additional revenue over the next decade.
This is a step-change opportunity for the satellite industry. The ability to service consumers directly has been a long-term goal for the Space Economy. Additionally, this effort with cell phones can help provide proof points for space-based IoT connections for farming, mining, offshore and other equipment in remote areas. While we constantly interact with satellites through navigation, banking or weather, bringing that connectivity to cell phones is allowing the industry to go mainstream.
To answer Verizon’s question: Yes, we can now hear you… everywhere.
Qualcomm
Qualcomm is a leading connectivity vendor with a silicon portfolio spanning cellular, connectivity and satellite solutions. The company first publicly entered the space race in 2021, when Qualcomm collaborated with NASA to design and launch the first autonomous drone to land on Mars. Qualcomm supplied Snapdragon processors, which run on low power and feature computer-vision navigation and low-latency processing. These enabled the drone to navigate the terrain on Mars in real time by scanning images of the terrain and sending them to earth for analysis. Qualcomm’s “One Roadmap” approach makes its platform extremely versatile, enabling Snapdragon to be designed into a variety of other robotics use cases. Qualcomm further expanded into satellite communication in 2023, with Snapdragon Satellite, which provides satellite-based messaging as a feature for mobile phone OEMs, enabling emergency services for users in locations with minimal cellular coverage. Snapdragon Satellite is set to expand into more use cases across computing, automotive and IoT devices as the ecosystem matures.