Smartphones with satellite connectivity could eventually prove vital to rural communities, bringing voice, data and broadband to Americans living in underserved markets. Advances in battery density, chipset processing power, and antenna technology have now made it possible for smartphones to connect with satellites for some basic services.
Satellite smartphones have gained momentum thanks to recent announcements from Apple, T-Mobile, and SpaceX. In conjunction with Globalstar, Apple has equipped its new iPhone 14 with satellite service, giving them a two-year head start on the market. T-Mobile and SpaceX announced plans to offer satellite connectivity for smartphones, with beta testing scheduled to begin in late 2023.
According to a new report from CoBank’s Knowledge Exchange, satellite smartphones could have a profound impact on residents of rural communities as technology advances and more robust service offerings become available. text messages and SOS,” said Jeff Johnston, chief communications economist at CoBank. “But as new satellites are launched in the coming years, more advanced voice calls and data applications should become available. And smartphones equipped with satellite technology will work anywhere in the US, regardless of cell coverage.”
The ability to make calls and send messages in remote areas where cell service does not exist would give some rural residents options and flexibility that were previously unimaginable. However, cost will be a key determinant of consumer adoption and the finer details about pricing are still unclear.
Apple provides the service for free for the first two years, and it remains to be seen how much they’ll charge after that. However, it is reasonable to assume that Apple will keep the price low and use the service to increase sales of iPhones, given its first-mover advantage. T-Mobile said satellite services will be free on its most popular plans, but it’s unclear how much those plans will cost when T-Mobile launches the service in 2024.
While it may seem like consumers can eventually expect to cancel their wireless carrier service and use satellite service exclusively, Johnston said this is highly unlikely.
“Satellite smartphones need a clear line of sight to the sky, which would limit service in urban and suburban areas,” he said. “And the capital required to create network capacity on a satellite network comparable to what is currently available on terrestrial networks would be incredibly high. The return on investment would never be calculated.”
Wireless carriers interested in pursuing satellite connectivity could take T-Mobile’s approach and offer service directly with SpaceX or a similar satellite carrier. The other option is to partner with Apple, or presumably Samsung as they are also expected to partner directly with a satellite operator. Watch a video synopsis and read the report, Niche for now, satellite smartphones could answer the call for rural connectivity.
CoBank is a cooperative bank serving vital industries in rural America. The bank offers loans, leases, export financing, and other financial services to agribusinesses and rural energy, water, and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated farm credit associations that serve more than 76,000 farmers, ranchers, and other rural borrowers in 23 states across the country.
CoBank is a member of the Farm Credit System, a national network of banks and retail lending associations formed to support the lending needs of US agriculture, rural infrastructure, and rural communities. Headquartered outside of Denver, Colorado, CoBank serves customers from regional banking centers in the US and also maintains an international representative office in Singapore.