AST SpaceMobile partners with Verizon, adding to AT&T coverage deal for satellite internet to phones

Satellite-to-phones service provider AST SpaceMobile announced a partnership with Verizon on Wednesday, adding to the company’s recent deal with AT&T to provide remote coverage across the United States.

AST SpaceMobile is building satellites to provide broadband service to unmodified smartphones, in the nascent “direct-to-device” communications market.

The company’s chairman and CEO, Abel Avellan, touted AST’s agreements with Verizon and AT&T as “essentially eliminating dead zones and empowering remote areas of the country with space-based connectivity.”

Verizon’s deal effectively includes a $100 million raise for AST, as well, in the form of $65 million in commercial service prepayments and $35 million in debt via convertible notes. The companies said that $45 million of the prepayments “are subject to certain conditions” such as needed regulatory approvals and signing of a definitive commercial agreement.

A variety of major players are pursuing the direct-to-device, or D2D, opportunity, seeing a chance to expand the mobile communications market to any place on Earth that “cellular signals are unreachable through traditional land-based infrastructure,” as Srini Kalapala, senior vice president of technology and product development at Verizon, described in a statement Wednesday.

Smartphone makers, service providers and satellite companies alike are working or partnering on D2D projects. Rivaling AST’s deals is SpaceX’s Starlink, which has teamed up with T-Mobile. Additionally, Apple has been spending heavily to provide its Globalstar-supported “Emergency SOS with Satellite” service, which it rolled out with iPhone 14 models.

AST expects to launch its first five commercial satellites later this year. SpaceX, boasting more than 3 million Starlink customers, is aiming to roll out the addition of its T-Mobile-supported phone service later this year. Elon Musk’s company earlier this month completed what it said was the “first video call” via social media using its satellites connected to unmodified phones.