(Credit: Victor J. Blue/Bloomberg via Getty Images)
Are US consumers going out of their way to buy satellite-to-phone services that work in dead zones? Not as a standalone offering, according to T-Mobile’s CEO.
On Monday, Srini Gopalan gave his take on the emerging market for satellite connectivity for phones; T-Mobile offers SpaceX’s Starlink Mobile as T-Satellite.
“Most consumer wireless, especially the premium offers, are going to end up having satellite connectivity linked to it. We’ve also seen very, very little take-up of à la carte connectivity, right?” Gopalan said at the JP Morgan Global Technology, Media and Communications Conference.
The comment is notable, given that T-Mobile has been offering T-Satellite as both a paid add-on and a free perk on the carrier’s most expensive plans. Gopalan is now indicating the paid add-on approach isn’t exactly resonating.
“Pretty much no one buys satellite standalone; they buy it as part of the premium package, which gives you a bunch of other benefits, global roaming, ad-free Netflix, etc.," he said.
Last month, T-Mobile's CEO also said the carrier was seeing lower T-Satellite usage than expected. In Monday’s talk, he got more specific. “Just to give you an example, we look at our data in May, and satellite usage is 0.0002% of our total network usage. That’s three zeros,” he said, later adding: “We’re seeing it largely focused on the national parks.”
(Credit: PCMag/Michael Kan)Gopalan didn’t elaborate on why the usage has been so low. But last month, Speedtest.net parent Ookla also collected data that suggested T-Satellite usage had decreased, possibly because fewer people were traveling outdoors in dead zones during the winter season. The free beta for the satellite service also ended last year, forcing consumers to pay up.
The 0.0002% figure isn’t exactly surprising, since T-Satellite has been estimated to offer only 4Mbps, limiting it to texting and data for select mobile apps, though it can support video calls. In contrast, the ground-based cellular T-Mobile network offers median download speeds of around 260Mbps.
T-Satellite is also available to customers on rival carriers through a secondary eSIM. But T-Mobile required sign-ups at a carrier store or by calling the company, until earlier this month, when it reopened online sign-ups for everyone, making enrollment easier.
In his talk, T-Mobile’s CEO spoke positively about SpaceX, noting that the carrier has a “great partnership” with Elon Musk's company to develop the satellite-to-phone service. Still, Gopalan added: “It’s clear that this is going to be a fundamentally complementary category.”
Gopalan also signaled that he’s already preparing for a future in which several providers offer cutting-edge satellite-to-phone services, rather than just SpaceX. He expects all US carriers to be offering satellite connectivity on their premium plans going forward. “And there'll be enough supply of it,” he said. “And this is no longer going to be a source of differentiation.”
Last week, T-Mobile joined AT&T and Verizon in announcing an upcoming joint venture that’ll pool their radio spectrum to support a wide range of satellite-to-phone services from multiple providers. The Starlink Mobile rivals include AST SpaceMobile, the Amazon-bound Globalstar, and Skylo, which could all theoretically benefit from the pooled spectrum to unleash even faster speeds and capacity. On the joint venture, Gopalan added: “This is about creating an efficient wholesale infrastructure.”
The joint venture has also been seen as a counter to SpaceX’s Starlink Mobile, which is preparing major upgrades to deliver 5G at 150 Mbps using next-generation satellites. Although the company continues to pitch Starlink Mobile as a complementary service for telecom providers, there’s been speculation that SpaceX could one day compete directly with carriers.
T-Mobile’s CEO weighed in on whether a satellite-to-phone provider might pose a competitive threat down the line by selling directly to consumers. “In the non-dead zone areas, I’d almost frame the question to you, what do you think is the gap that D2D [direct to device] or D2C [direct to cell] would address that’s not being addressed by terrestrial?” he asked. “And then we can have an informed conversation on technology.”
“But starting technology first, could there be a D2C product? Yeah. But look at the take up of à la carte satellite, right? I’m more intrigued in what’s the problem to solve?” he added.