Satellite phone tech coming to your mobe this year – but who pays for it?

Operators mulling whether to price tech into subs, says report, which notes Musk's Starlink satellite dominance

This year will be Ground Zero for the commercialization of satellite smartphone services, but a key question is whether operators will charge extra for this capability or include it as part of customer subscriptions.

A report by mobile industry analyst GSMA Intelligence says that the monetization of satellite services may hinge on whether mobile operators decide to charge for them, with a mixture of approaches already evident.

To be clear, we're talking about satellite connectivity with unmodified, standard smartphones, for when you're out of cellular range or service, not dedicated sat-phones that have been around for years already.

T-Mobile in the US, for example, has already said that satellite service will be included at no extra cost on high-value subscriptions, while customers on other plans can add the service for $15 per month. The company announced a beta service in February, which offers just text messages for now, with data and voice calls coming later.

In contrast, telco One New Zealand has said it is including satellite service for its subscribers in the Pacific island nation at no extra cost.

Both T-Mobile and One New Zealand have signed up with SpaceX's Starlink satellite service in order to provide the capability for their customers to stay connected when out of range of their network's cell towers.

As ever, we must point out that Apple has been offering satellite messaging for owners of its smartphones ever since the launch of the iPhone 14, which is free for two years following activation of the device. This capability is provided by the Globalstar satellite service.

But there are other options, with Vodafone teaming up with another satellite operator, AST SpaceMobile, to offer a commercial direct-to-phone satellite service in Europe starting sometime later this year. This could net it an addressable base of some 70 million people, according to GSMA.

We asked Vodafone if it was going to include satellite connectivity as part of its service plans or make it a paid-for extra, but it seems the company isn't ready to talk about this just yet.

Britain's telecoms regulator Ofcom kicked off a consultation at the end of March about licensing such services in the UK, hinting this could be in place before the end of this year – in which case Vodafone will likely be first in line.

The GSMA claims that, based on published tariffs, the implied increase for an average contract customer for satellite capability could be between 10 to 30 percent - making it roughly even with the premiums for LTE and 5G connectivity pricing when those were launched.

It says any impact on operator overall revenues cannot yet be measured, as services are largely pre-commercial, but this will be a crucial metric it will track over the course of 2025.

However, an earlier report from it found from a survey that 40 percent of mobile subscribers wouldn't be prepared to pay any more for satellite capability, while 32 percent might be willing to pay up to 5 percent extra on their tariff, 17 percent said they'd be willing to pay up to 10 percent extra, and only 4 percent were prepared to stump up another 20 percent.

Joe Gardiner, Research Analyst at CCS Insight, told The Register he believes satellite SMS services will be included in most mobile plans in an operator's portfolio to enhance the plan's value - as has already been seen with One New Zealand.

"I was interested to see the price point T-Mobile chose of $15 a month; this was higher than I expected for SMS texting," he said, adding "Once voice and data capabilities are available in the US, I think T-Mobile may reconsider its satellite pricing model, lowering or eliminating the price of SMS while charging for voice and data functions, possibly at a higher price than what it currently charges for SMS."

Emergency messaging is likely to be free in all countries due to its relatively small use and potential to help people in danger, creating good publicity for the operator and satellite company, Gardiner said.

"Once voice and data functions have been approved by regulators, I think they will be priced as an add-on or only included in the most premium plans by most operators. Given the capacity needed for these functions, it is highly unlikely they would bundle it in with mid and low-tier plans," he predicted.

However, emergency voice calls will likely be offered for free for the same reasons as emergency messaging, and might even be a condition of their license agreement with the regulator.

GSMA's report notes that on paper, Starlink should be leaving AST SpaceMobile in its dust, given that the latter currently has just five satellites in orbit, a small fraction of the more than 7,000 that Starlink has so far lofted into space.

But the higher capacity available with AST's larger satellites means it does not require as many in orbit to provide a comparable level of service, and the biz estimates 45 to 60 satellites will allow it to provide full coverage over North America and Europe. ®