Sizing the satellite connectivity opportunity for smartphones

Satellite connectivity is coming to smartphones, Apple is adding Emergency SoS using satellites to the iPhone 14 range. Initially, it will be available in the U.S. and Canada. In time, it will possibly come to cellular smartwatches as well. Also, Huawei has announced similar support in the Mate 50. Now, Opensignal has analyzed over 100 global markets to understand the extent of the cellular “no signal” problem that mobile users face and which satellite connectivity seeks to solve. Satellite connectivity offers not just connectivity for all, but connectivity all of the time.

It’s no surprise to see that satellite connectivity is coming to smartphones because of the number of companies that have already made announcements and its inclusion in upcoming 5G standards. To date, Qualcomm, Ericsson and Thales are starting to test satellite connectivity as part of their 5G Release 17 development work. Best known as the maker of CAT-branded smartphones, Bullitt will launch a smartphone with satellite connectivity in early 2023. Apple and Globalstar were rumored to be working tgether. While Elon Musk’s Starlink has announced a deal with T-Mobile US also for launch in 2023 and Google has confirmed support will arrive in Android 14 also in 2023. Apple is able to move quickly because it has more in-house control over hardware and software than many of its competitors.

To launch low earth orbit connectivity for mobile users, companies need to gauge how important it is to users to strike the right commercial deals. And, this is critical given the other tasks needed such as creating and testing new dedicated hardware, adding software support, gaining per country regulatory approval. 

 

Service providers will likely aim to target users in richer markets first as those users will be most able to pay additional tariff fees. Across the G7 group of leading economies, Opensignal data shows clear differences in the proportion of time users spend without cellular service, ranging from 2.14% in France to just 0.51% in Japan.

It’s important to remember that while these percentages may seem small, some times will be considerably more valuable to users than others, for example, the ability to send an emergency message when off-grid during a car breakdown or because of a hiking accident. And, it’s unsurprising the absolute values are low because wireless carriers are not stupid — they build their cellular infrastructure to target the places and times that matter most to their users. But some locations are simply extremely costly to reach and there will always be gaps where satellite connectivity can help.

Initial launches of smartphone satellite connectivity by Huawei and Apple focus on emergency messaging, this is because:

  • Smartphones may struggle to see all fast moving low earth satellites. Existing home broadband satellite data services suffer interruptions when the satellite dish lacks a clear view of the sky and so cannot see the full orbiting constellation. A limited view of the sky can also slow signal acquisition. This situation is more likely for a smartphone user where trees, mountains or buildings may limit sky visibility. However, a short message service will be able to slip through when the mobile device can see a satellite avoiding the need for continuous service.

  • Battery power may limit more demanding services. Unlike fixed satellite dishes, smartphones have relatively small batteries that are needed for all functions. Off grid, an owner will need the battery to support navigation — GPS is also battery hungry — and may need to use a bright display for daylight visibility, again a battery drain. Short messaging will minimize the additional drain on the smartphone.

  • Messaging keeps data costs low. Short messages — whether iMessage, Signal, WhatsApp or LINE — use modest amounts of data. This means the mobile service provider can manage the roaming data costs. This is similar to the model for SMS in the late 90s.

While nationally, the amount of time users spend without a mobile signal may be relatively low, there are large regional differences that offer opportunities for satellite service. In the U.S. the national no signal percentage is 1.09%, but in eight states users spent approximately double or more time than the national average without cellular service: Alaska (4.25%), Wyoming (3.98%), Vermont (3.86%), Montana (3.48%), West Virginia (3.44%), Idaho (2.47%), Colorado (2.08%), and Oregon (2.05%). This means that users on vacation in picturesque states will value the peace of mind of satellite connectivity as well as those state’s residents. 

Similarly, across Canada, we see no signal time range from 1.26% in Alberta up to 2.2% in British Columbia. In France, and especially in Brazil, the time users spend without service is higher indicating there are clear global opportunities.

Opensignal has analyzed over 100 global markets. Above, we list 10 markets in each region where users experienced the highest proportion of no signal time, and the five markets per region where they had the best experience and little time with no signal. A lower proportion of time with no cellular signal is a better experience for users. 

The challenge for service providers looking to add satellite connectivity is that in the main those markets with less cellular signal availability tend to be emerging markets. In those markets GDP per head tends to be lower and so the commercial opportunity may need to involve governmental organizations, to tie into meaningful connectivity programs, rather than the private sector alone. 

Companies also need to assess the other ways in which to fill in coverage gaps. For example, to understand the role for Wifi, distributed antenna systems (DAS) and cellular small cells to boost  in-building connectivity where cellular service from traditional macro towers does not penetrate — and most likely neither will satellite signals. How should such small cell endeavors be deployed — by each operator separately, or should there be a neutral host model?

In rural locations, regulators and operators may do well to look to national roaming agreements to fill in quick win gaps in service. In other words, where one cellular operator has service, but others currently do not, should regulators intervene to mandate national roaming? Most likely this will offer a better experience than satellite connectivity, but equally it will not solve the connectivity challenge on its own.

Regardless, it’s clear there are connectivity gaps today. This initial Opensignal analysis on the satellite smartphone opportunity that looks at the time with no signal is just a start. Opensignal will be continuing to analyze mobile users' data to see which user segments and in which locations the opportunities are greatest.