- AT&T, T-Mobile and Verizon officially launched their satellite D2D joint venture
- Industry veteran Paul Roth will serve as interim CEO until a permanent exec is named
- The Big 3's combined effort counters a potential long-term competitive threat from SpaceX/Starlink Mobile
In case there were any doubts that the joint venture the Big 3 wireless carriers announced earlier this year was merely an exercise “in principle,” the companies announced Thursday that their JV is indeed, the real deal.
“AT&T, T‑Mobile and Verizon have entered into a joint venture agreement focused on expanding coverage in underserved areas across the U.S.,” the carriers said in a joint press release.
Each founding member of the JV will have a representative on the board.
Paul Roth named interim JV CEO
Heading up the JV will be Paul Roth, who will serve as interim CEO while a search is underway for a permanent CEO. Roth is described as a seasoned wireless industry executive; he previously held several leadership roles at AT&T, Cingular Wireless and Ameritech.
Beyond that, the new press release doesn’t expound a whole lot on the earlier announcement from May, when the Big 3 wireless carriers described the JV as a way to address coverage dead zones through joint investment in satellite-based, direct-to-device (D2D) technologies.
They still haven’t identified the spectrum they expect to pool or any other specific activities.
However, they expect to agree on some common technical specifications, taking a “unified approach” to provide a “better and more consistent customer experience across the industry.”
Independent efforts remain
Thus far, each of the Big 3 carriers – beyond the Apple SOS service on newer iPhones – have been approaching the direct-to-device (D2D) satellite space individually, and that isn’t expected to change.
“Existing carrier-satellite agreements will remain in place and the JV partners can continue connectivity efforts independently,” they stated.
AT&T and Verizon are both invested in AST SpaceMobile, which is building a constellation using giant-sized Bluebird satellites to cover large swaths with signals from space. Verizon also offers a messaging service through Skylo.
T-Mobile was the first to launch a commercial D2D service on a wide scale with SpaceX; its T-Satellite service is included in some higher-end rate plans.
However, T-Mobile President and CEO Srini Gopalan has said T-Satellite is about 0.0002% of its total network usage and about 0.0003% during the busiest summer months, proving that D2D is a complementary category to regular terrestrial mobile services.
What’s behind the JV?
The publicly stated purpose of the JV is to help close coverage gaps by making satellite-enabled connectivity easier to deliver in areas where terrestrial service is limited.
The unstated motive? Observers speculated in May that the JV was a way to show solidarity against SpaceX, but that it didn’t have any real legal teeth behind it. Judging by this week’s announcement, those concerns about it being a JV merely on paper can largely be laid to rest.
Questions also arose about the Big 3 being accused of collusion. During an investor conference last month, SpaceX CFO Bret Johnson suggested the carriers wanted to create a “cartel,” adding that SpaceX’s next generation service – which is going to be more 5G-like with more bells and whistles than emergency texting – will have the ability to deliver a service that is “really compelling for people.”
Some of this back-and-forth is related to the fact that all of the Big 3 CEOs have said they’re not interested in striking an MVNO deal with SpaceX/Starlink Mobile, which they publicly say would not widen their total addressable market.
The unstated fear is that an MVNO would basically hand over the keys to the mobile kingdom to Elon Musk.
For their part, Musk and his associates at SpaceX have said they plan to build out a terrestrial network using femtocells and the spectrum they acquired from EchoStar. Of course, they can always buy more spectrum via secondary market transactions and/or upcoming FCC auctions.
But analysts at New Street Research (NSR) said they don’t see how building out terrestrial capabilities – which entails spectrum, stores, salespeople, vendor relationships, billing, network operations center (NOC) and truck fleets – and repeating that process across the whole globe is where Musk will ultimately choose to allocate capital that could be going to space.
“The best option, in our view, is don't re-build a global facilities or distribution network. Work with carriers that already have this and collect a very high-margin check,” wrote NSR analyst David Barden in a Thursday note for investors.
Obviously, there’s a lot at stake here for everybody. But as for the carriers, “working with, not against each other, is where the win lies,” he said.
Read more stories about the Big 3, SpaceX and D2D on Fierce Network
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