AT&T will invest $20 million with satellite-to-cellphone provider AST SpaceMobile to help erase connectivity gaps in coverage by offering service from space.
The investment will come in the form of revenue commitment is part of a broader $155 million deal through which AT&T will also invest in AST SpaceMobile alongside Google and U.K.-based telecom giant Vodafone. AT&T’s $20 million commitment hinges on the launch and successful initial operation of the first five commercial satellites.
AT&T did not disclose its investment portion.
“Through our work with AST SpaceMobile, we’ve already proven the possibilities that satellite has to offer in helping connect more people via text, voice, and video,” said Chris Sambar, executive vice president and head of network at AT&T. “We’re excited to deepen our relationship with this investment as we continue to drive a first-of-its-kind innovation forward and work together to achieve this shared vision of space-based connectivity for consumers, businesses, and first responders all around the globe.”
The AST SpaceMobile deal underscores how companies are moving quickly to get service set up in space. Beyond, AST SpaceMobile, both SpaceX and Amazon are launching thousands of low-Earth orbit satellites to complete their respective satellite constellations to beam everything from cell service to internet coverage. SpaceX’s Starlink has a deal with T-Mobile, but so far only supports texting in its early testing.
AST SpaceMobile plans to build its connectivity to 5.5 billion cellular devices when they are out of coverage and eliminate connectivity gaps worldwide.
In addition to the investment, AST SpaceMobile plans to draw $51.5 million from its secured credit facility to further fuel its investment.
AST SpaceMobile was not immediately available for comment.
AST SpaceMobile refers to itself as the inventor of direct-to-direct satellite service. The company operates the largest commercial communications system in low Earth orbit, the BlueWalker 3 satellite. Its service eliminates the need to use a dedicated device for satellite connectivity. The service can be utilized by AT&T, Vodafone, Google, and more than 40 other cellular provider partners to provide connectivity to customers in areas lacking cellular service.
AT&T has already worked with AST SpaceMobile to conduct technology trials, including voice connectivity between an unmodified smartphone and a satellite, 10 Mbps LTE satellite-to-cellphone calls, and 5G voice and data connectivity between an unmodified smartphone and a satellite. The $20 million investment will come in the form of revenue commitments once the business gets up and running.
Vodafone made a similar commitment to spend $25 million on AST SpaceMobile, while Google plans to work with the company on product development, testing, and implementation plans for direct-to-device connectivity for Android and “related devices.”