US telecom executives this week provided more details on the recently announced plan to form a joint venture (JV) targeted at pooling some of their spectrum resources that would then be provided to satellite providers to bridge rural wireless coverage gaps.

Those details came during individual interviews at this week’s J.P. Morgan Investor conference, where the CEOs for AT&T, T-Mobile US, and Verizon were all peppered with questions regarding that JV and their broader views on the satellite-based communications space.

AT&T CEO John Stankey provided the most detail on why the JV is being formed.

“I think all three of us kind of stepped back and said, 'Look, there are some things that need to be fixed here.' It doesn't make sense for all of us to be lobbying for different priorities on the handset deck for spectrum capabilities, and if we get bifurcation on that, that's not going to be good for any of us,” Stankey said. “It doesn't make sense that you have IP that you've developed that allows applications to run more effectively in these heterogeneous networks that have to be integrated. We've got a little bit, you've got a little bit, if we kind of get together into the software space and start putting out more standards around that, things can operate more effectively.”

The “little bit” here and there includes low- and mid-band spectrum.

“Low band spectrum is pretty scarce,” Stankey said. “If we did something together, we could get a service out there that makes more sense, that's available in more places, that works better. It'll be better when it's paired with mid-band spectrum. We can engineer it better in that way. We can go and we can collectively figure out how that scarce license spectrum can be used most effectively with high utilization by aggregating our traffic.”

AT&T and Verizon currently have spectrum-related deals with AST SpaceMobile that include each carrier providing the nascent satellite entity with low-band spectrum in the 850 MHz band. Those deals recently received Federal Communications Commission (FCC) approvals.

AST SpaceMobile is constructing a low-Earth orbit (LEO) constellation. This includes the launch late last year of its BlueBird 6 satellite that spans nearly 2,400 square feet, which is three times larger than AST SpaceMobile’s previous BlueBird models and is claimed to be “the largest commercial communications array ever deployed in low-Earth orbit.”

That satellite is designed to use traditional cellular spectrum that allows it to support already released cellular devices. AST SpaceMobile has said that those contributed spectrum assets, when combined with its own L-band holdings, can provide network speeds of up to 120 Mbps.

Stankey noted that AT&T has “a great relationship with AST SpaceMobile. The technology and the approach that they're using is unique for direct-to-device (D2D), and I think it's going to be a great path for the first product that comes out that is effectively a seamless and straightforward product for a consumer to use that extends the network, and we're going to continue on that path.”

Stankey added that “the JV will take some time to mature and ultimately come up to operating speed,” and that with AST SpaceMobile, “we're still going to be pushing ahead to bring that product out to market to ensure our customers get access to it.”

Fostering an ecosystem

T-Mobile US CEO Srini Gopalan echoed that dual-path plan, stating the carrier would also continue its ongoing work with SpaceX’s Starlink alongside the new JV but that there needs to be a more unified approach to growing the market.

“There are real problems to be solved, problems like device ecosystem. Some devices support it, some don't. There isn't a uniform device ecosystem,” Gopalan said. “Problems like IP, and standardized interfaces, and standardized ways in which consumers can get access to the service … problems like standardized spectrum.”

Gopalan did provide the most detailed fact when he noted the carrier witnessed just .0002 percent satellite usage in May through its current Starlink arrangement, “that’s three zeros … so it’s clearly a complementary use case,” and as such, why the need for more spectrum.

“The reality is in hot spots like in the national parks, you do need spectrum, and because of the distribution of spectrum I might own the right spectrum outside Zion National and Verizon might have it over Yellowstone, which doesn't help the customer, and bringing it together creates a uniform spectrum world where we can pull in that spectrum, so all of that standardization plus aggregation of demand, which for the smaller satellite players is critical, or for the recent entrance is critical, creates a satellite ecosystem that allows the American customer to get wireless from satellite as part of a standardized package,” Gopalan explained.

Stankey also touted the venture’s ability to build a more robust tier of satellite providers, which should widen the market for operators.

“One of the fundamental things you want the JV to do is to make sure that there's a robust wholesale market in satellite,” Stankey said. “That means multiple constellations to buy from, and at the end of the day, that's a good thing because that means capacity will be out there that ultimately can be delivered to customers. It means a robust wholesale structure will keep pricing in check, so there isn't a bottleneck of any particular single provider that can dictate what that pricing is, and that ultimately benefits the consumer, because the product and service becomes more widely available.”

Gopalan also added that while the JV would pool resources, “we will compete, obviously, as providers in terms of how we innovate around that, but as we look around corners, the differentiation doesn't exist, and this is about creating an efficient wholesale infrastructure.”

Satellite as competitor

Verizon CEO Dan Schulman did not provide much additional insight into the JV but did reinforce previous statements that the carrier views satellite connectivity as a “complimentary service to the carriers.”

“If you think about our capacity in urban and suburban, we are 100- to maybe 1,000-times more efficient than satellite could ever be in those areas,” Schulman said during his time on the J.P. Morgan conference stage. “There are probably five million homes in the US where satellite can be a more efficient alternative, but for us the physics of satellite versus terrestrial are really kind of a night and day difference, and so for 95 percent-plus of our customers, we see satellite as a complementary service and very hard to compete with terrestrial networks.”

Schulman’s notion countered repeated questions regarding satellite communication-based competitive concerns or whether established cellular-based operators were interested in allowing satellite-based entities access to those cellular networks for their own competitive offerings, a notion shared by his peers.

“I think as we bring satellite and wireless together to address dead zones, I think that's something that does address a customer need,” Gopalan said. “But if you think about the non-dead zone areas, I'd almost frame the question to you, ‘what do you think is the gap that D2D or D2C [direct-to-device or direct-to-consumer] would address that's not being addressed by terrestrial?’, 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 a-la-carte satellite … I'm more intrigued with what's the problem to solve.”