AT&T plans 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.

In a recent Federal Communications Commission (FCC) filing, AT&T said it entered into a long-term lease agreement with AST that will allow the satellite entity to use those spectrum assets for the private use of AT&T services. The carrier added that AST’s service would be able to smoothly integrate into AT&T’s current offerings.

“AST intends to provide broadband access directly to AT&T customer handsets that operate on the leased spectrum, without any modifications or the use of special chipsets, and without the buildout of any additional terrestrial wireless infrastructure,” according to the filing AT&T shared with SDxCentral. “This is expected to allow AT&T to provide space-based broadband coverage in its licensed areas, including temporary coverage following natural disasters.”

AT&T’s leasing of low-band spectrum highlights the seriousness of the effort as those bands are highly prized by telecommunication operators for their propagation characteristics. The carrier recently used some of its 850 MHz spectrum as part of an industry first 5G uplink test.

The spectrum lease boosts AST’s ongoing satellite efforts in the telecommunication space. The Texas-based company is building a satellite constellation that can transmit data between standard cellular devices.

Last year it placed its BlueWalker 3 satellite into orbit. That satellite was used as part of a recent test that facilitated a two-way voice call between a pair of Samsung Galaxy S22 smartphones. One of the phones was on AT&T’s network in Texas with the other on Rakuten Mobile’s network in Japan, with United Kingdom-based telecom giant Vodafone also part of the test.

That trial built on past work between AST and AT&T. Chris Sambar, president of network at AT&T, late last year participated in a video extolling the potential of using AST’s satellite network to expand cellular broadband coverage.

AT&T’s AST boost came on the heels of rival T-Mobile US last year signing a much-hyped deal with Elon Musk’s SpaceX to provide satellite connectivity using some of T-Mobile US’ 2.5 GHz spectrum. AT&T CEO John Stankey dismissed that deal, telling Bloomberg in an interview that his company was significantly ahead of T-Mobile US in integrating satellite connectivity.

AT&T has a satellite history

AT&T has been active beyond AST in tying satellite connectivity into its commercial operations.

The carrier signed a strategic deal with OneWeb in 2021, targeted at using the company’s low Earth orbit (LEO) constellation to expand coverage for enterprise customers into remote and edge location. AT&T also nearly 13 years ago launched a satellite-based smartphone service with TerreStar Network.

The carrier more recently unveiled a portable device for its FirstNet public safety service that uses satellite connectivity for backhaul.

MTN Consulting in a recent report noted the increasingly competitive satellite communications market. It cited the emergence of new players like AST, SpaceX and Lynx; a tough funding environment; and market concentration as forcing competitors to expand their addressable markets. The analyst firm said those markets could include direct-to-device (D2D) communications, IoT and cloud-based services.

“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 the report. “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.”