AST SpaceMobile and Rakuten Mobile to Beam Connectivity from Space in 2026; What’s the Market Potential of the Space-Based NTN Mobile Market?

In February 2024, Rakuten Mobile announced plans to launch a Non-Terrestrial Network (NTN)-mobile service in Japan by 2026, in partnership with AST SpaceMobile, a company with the ambitious goal of providing the first space-based cellular broadband network accessible by standard smartphones. This collaboration will aim to offer 4G/5G mobile services that includes text, voice, and video calls in Japan nationwide, and enhance mobile connectivity in remote or disaster-prone areas through AST SpaceMobile’s Low Earth Orbit (LEO) satellite network. The strategic partnership, initiated in March 2020, leverages AST SpaceMobile’s satellite network for direct communication with consumer smartphones, with a focus on expanding mobile connectivity across Japan's challenging terrains and improving network resilience against natural disasters.

AST SpaceMobile's innovative SatCom approach seamlessly transforms standard smartphones into satellite-connected devices. AST SpaceMobile’s network leverages a constellation of LEO satellites that function as “space-based cell towers”, extending coverage to remote regions and filling in connectivity gaps left by traditional terrestrial networks.  When a user sends a signal, it is captured by the nearest AST SpaceMobile satellite and relayed to a ground-based cellular network to enable calls, texts, and data services, even in areas where traditional ground-based cellular coverage is sparse or non-existent.

AST SpaceMobile has strategically partnered with major Mobile Network Operators (MNOs) globally to use their spectrum. This means that users with standard/unmodified smartphones can easily tap into its Non-Terrestrial Network (NTN)-mobile services for uninterrupted service when outside their MNO's coverage area. With agreements including more than 35 MNOs and potentially impacting billions of subscribers, AST SpaceMobile is well-positioned to revolutionize global connectivity.

Potential Impact of AST SpaceMobile's NTN-Mobile Services:

Potential Disruption in the Telecommunications Sector: AST SpaceMobile’s NTN-mobile services could potentially challenge the dominance of international roaming services from terrestrial cellular networks, particularly in geographically challenging areas. BlueWalker 3 is AST SpaceMobile’s prototype satellite designed to operate directly with standard, unmodified mobile devices. The spacecraft was built with an aperture of 693 square feet to establish connectivity directly with cell phones via The 3rd Generation Partnership Project (3GPP) standard frequencies, allowing it to establish a higher data rate of above 10 Megabits per Second (Mbps) from space. This was demonstrated when BlueWalker 3  successfully beamed 4G and 5G connectivity to standard, unmodified mobile devices over the past year.

Signal of Satellite Communications (SatCom) Market Trends: AST SpaceMobile's development of NTN-mobile services could act as a catalyst for the validation of the viability of seamless integration between standard smartphones and space-based networks. If successful, AST SpaceMobile’s business model could provide market validation that the NTN-mobile concept could be poised to go beyond niche markets and enter into the mainstream consumer market, which would set a precedent for further innovation in space tech. In addition, it was announced in January 2024 that Google and AT&T participated in a strategic investment round for AST SpaceMobile, contributing to a total of US$155 million. Following this, in February, AST SpaceMobile disclosed that it had secured a new contract from a leading contractor that is engaged with the U.S. Government. This initial firm-fixed-priced contract, supported by AST SpaceMobile's BlueWalker 3 satellite and its next five commercial satellites, marks a major step forward in the company's development. Revenue-generating contracts like this highlight the flexibility of its dual-use technology and demonstrate the increasing adoption of its solutions.

The potential convergence of satellite and terrestrial mobile networks promises to transform the telecommunication landscape. This shift is expected to fuel market growth in the NTN handset segment, projected by ABI Research to reach more than US$228 billion in revenue by 2030 with a 36% Compound Annual Growth Rate (CAGR). This market expansion offers substantial opportunities for MNOs, device manufacturers, and satellite service providers. For more details, refer to ABI Research's Satellite Communication Terminals & CPE Shipments: NTN (MD-SATTN-101).

ABI Research offers three key recommendations for market participants aiming to optimize growth and tap into the growing demand for SatCom connectivity within the NTN-mobile marketspace:

1. Traditional MNOs: MNOs should prioritize innovation and strategic partnerships with satellite service providers to maintain competitiveness in the face of NTN-mobile technologies. MNOs should explore hybrid terrestrial-satellite solutions to augment their network coverage. A growing number of leading MNOs, including T-Mobile, AT&T, Rakuten Mobile, Vodafone, Saudi Telcom Company, Rogers, Salt, Telefónica, and others, have embraced partnerships with NTN-mobile providers like AST SpaceMobile, Lynk Global, and SpaceX. This global trend shows the growing role of SatCom and its potential in expanding mobile networks.
2. Device Manufacturers: Direct access SatCom technology, while still an emerging space, will present immense potential for revolutionizing the use of consumer mobile devices. Moves to provide satellite-capable mobile devices by major consumer smartphone manufacturers and chipset makers, including Apple, Qualcomm, Motorola, MediaTek, Huawei, and ZTE, could be seen as a marker of the market’s readiness for SatCom with consumer devices. Integrating optimized satellite connectivity features and support for higher SatCom data rates in future smartphones may become necessary to ensure compatibility with evolving space technology.
3. Satellite Service Providers: Satellite service providers will have abundant business opportunities within industries like oil & gas, mining, maritime, and emergency services, which frequently operate in remote or infrastructure-limited locations. Focusing on strategic partnerships within these key markets can drive revenue growth and adoption of satellite-based connectivity solutions.