Verizon’s recent $100 million investment in AST SpaceMobile furthers the interest of its telecom rival AT&T, which has also partnered with the nascent satellite connectivity provider and wants that broader ecosystem to have plenty of competitors.

AT&T CFO Pascal Desroches told an audience at the recent Bank of America C-Suite TMT Conference that “for us having choices, having a competitive marketplace will allow us to provide consumers with a great experience at a really affordable price.”

“Here is the way we’re thinking about this,” Desroches said. “There will be multiple providers, and in fact as far as we’re concerned, we want there to be multiple providers. We want the market to be fairly deep, and AST is one of the companies.”

Desroches did acknowledge that one of those other “companies” will be SpaceX, which has surged into a leadership position among satellite-based connectivity providers. That leadership position has been on the back of an aggressive launch and service schedule for its Starlink service that has also drawn service arrangements with a handful of service providers, including T-Mobile in the United States, Rogers in Canada, KDDI in Japan, Optus in Australia, One NZ in New Zealand, Salt in Switzerland, and Entel in Chile and Peru.

Analysts have noted that SpaceX’s strong push into the market has allowed the provider to be aggressive on pricing and virtually smother efforts from potential rivals.

“Starlink’s wholesale capacity pricing substantially undercuts that of the rest of the industry,” Analysys Mason Research Analyst Luke Wyles noted in a recent report.

AST SpaceMobile has AT&T, Verizon support AT&T and Verizon have both so far steered away from SpaceX and instead have backed AST SpaceMobile’s efforts. Those efforts have the satellite company scheduled to launch its first commercial low-Earth orbit (LEO) satellite this summer, with plans to eventually have five satellites in orbit.

LEO satellite constellations typically operate relatively close to Earth at a height of less than 1,000 kilometers and are able to make a full Earth orbit in around 90 minutes. This allows a constellation to provide relatively low latency compared to satellites that operate in medium-Earth orbit (MEO) at the expense of coverage per satellite.

AT&T has been working with AST SpaceMobile toward those efforts for several years.

The carrier last year agreed to lease some of its prime low-band spectrum assets to AST SpaceMobile to potentially bolster the carrier’s integration of satellite-based telecommunications services in expanding the reach of its 5G-based broadband network to more remote and edge locations. The move would allow AST SpaceMobile’s satellites using that spectrum to smoothly integrate into AT&T’s current offerings.

AT&T has also been working with AST SpaceMobile on several 5G technology-based direct-to-device tests that have produced downlink speeds in excess of 10 Mb/s. The speed mark is significant as it expands the broadband capabilities of satellite-based connections, especially as they are being looked at to support bridging the digital divide and supporting high-throughput enterprise applications like SD-WAN services.

AT&T last month announced official plans to partner with AST SpaceMobile to provide a satellite-based broadband network connection to AT&T smartphones. That deal will use low-band spectrum leased by AT&T to AST SpaceMobile, which will allow standard AT&T mobile devices to take advantage of broadband speeds in remote locations.

Verizon a couple of weeks later also jumped on that opportunity in committing a total of $100 million toward AST SpaceMobile for satellite-based service using low-band spectrum from the carrier. That investment includes $65 million in commercial prepayments for AST SpaceMobile services and a $35 million investment in the form of convertible notes that will provide Verizon with a stake in the satellite company.

“By entering into this agreement with AST, we will now be able to use our spectrum in conjunction with AST’s satellite network to provide essential connectivity in remote corners of the U.S. where cellular signals are unreachable through traditional land-based infrastructure,” Srini Kalapala, SVP of technology and product development at Verizon, said in a statement.

Satellite market remains murky These deals between satellite communication providers like AST SpaceMobile and telecom operators will be significant.

A recent report from industry trade group GSA “identified 77 publicly announced partnerships between operators and satellite vendors across 43 countries and territories.” That number included 50 operators in 37 countries and territories that “have planned satellite services,” nine operators in nine countries and territories “currently evaluating, testing or trialing these,” and 10 operators in 10 countries and territories having “commercially launched satellite services.”

Analysts have questioned the ability for the market to support several satellite-based service options, especially if they try to compete on a level-playing field with already established terrestrial-based telecommunication providers.

“Looking at these market opportunities, a thought may arise whether satellite operators are trying to disrupt the traditional telecom market. But the reality is that telcos will continue to be the primary service provider for wireless access,” MTN Consulting’s Arun Menon wrote in a report last year. “Telcos are also going to benefit from partnerships with satellite operators as they will aid in providing an enhanced experience for telco customers, reinforced by ubiquitous coverage. For satellite operators, though, navigating the regulatory hurdles and ensuring constant capital flow are key concerns; several players from the current herd will vanish in the next three to five years.”