Closing Bell - Manifest Space: AT&T’s Dead Zone Busting Satellites with AT&T Head of Networks Chris Sambar 9/12/24

Episode Date: September 12, 2024

AST SpaceMobile has successfully launched its first five Bluebird commercial satellites, in a major step towards building space-based service for smartphones. AT&T has been a strategic partner of the company since 2018, as well as a key investor and beneficiary of the mass market. Fresh off the launch, AT&T Head of Networks Chris Sambar, joins Morgan Brennan to discuss the commercial partnership, how its venture differs from Verizon’s investment in the company, and the future of satellites for smartphones.

AST SpaceMobile announcing a successful launch of its first five Bluebird commercial satellites, lifting off early Thursday morning via a SpaceX rocket, with the spacecraft successfully transmitting from orbit. The launch representing not only a milestone for AST, but also for one of its longest standing investors and partners, AT&T. AT&T's head of network, Chris Sambar, who joined AST Space Mobile's board earlier this year, says this is the moment the telecom giant has been waiting for when the promise of space-based service begins to scale.

What we're going to do with AST in partnership with them is we're going to bring satellite connectivity and not just voice, not just text, but full data connectivity to your regular cell phone that's sitting in your pocket today. And that's pretty exciting. So really, we're bringing satellite connectivity to the masses. And it's never been that way before. And AST is the first company to do this at scale, at data speeds over 20 megabits per second to a regular unmodified cell phone like you and I carry around all day. No time yet on when service launches. Sambar is hopeful that

happens within the next two years. But on a day when the Polaris Dawn private astronauts made history stepping into space and are now setting sights on testing SpaceX's Starlink, the growing role of space when it comes to connectivity is in focus, bolstering the big bets by AT&T and others. What we're really doing at its simplest form is we're taking the cell sites there. You know, we have tens of thousands of cell sites across America. AT&T does. All we're doing is we're taking those cell sites and we're putting them up in space. And if you think about it from an economic standpoint, instead of having to build cell site after cell site after cell site on the ground, tens of thousands of them, you can

instead put dozens of them up in space and get a lot of the same job done. Now, the space-based network can't replace the terrestrial network because you can't get the same data speeds, latency, throughput, all those things. But still, in rural areas where it may not be economical to build a terrestrial cell site, you know, a fixed steel structure, you can just rely on space instead. On this episode, AT&T's Sambar joins me from Florida's Space Coast, fresh off the Bluebird launch, to discuss the commercial partnership, how that compares to AST's deal with Verizon,

and what Apple's iPhone signals about where this market is headed. I'm Morgan Brennan, and this is Manifest Space. Joining me now, Chris Sambar, the head of network at AT&T and on the heels of a successful launch for AST SpaceMobile's first satellites to orbit. AT&T is a key partner, investor in AST. Walk me through this moment and why it's so important. It's incredibly important

and thanks for having me join you today, Morgan. Really appreciate it. So, you know, we've been involved with AST for about six years now and they had a test satellite that they put up at the end of 2022, September 2022. We've been doing a lot of testing ever since then, but this is really it. This is the moment we've been waiting for when we begin to scale the project. And today we saw the successful launch real early this morning of five satellites and I couldn't be more excited I we got word about three hours ago that they got a successful connection to each of the five satellites so they're working just as

they should so very exciting moment mmm that's exciting to hear and of course we're talking about the Bluebird satellites. What do these enable? Why are these such a game changer when we talk about the communications landscape? Sure, sure. So at AT&T, we've been using satellite technology for years and years.

In fact, AT&T was the very first company in the world to put up a communications satellite long, long time ago, back in the 60s. Well, we've come a long ways with satellite connectivity, but even in just the last few years, if you wanted to have a satellite connection for a voice call, for example, you had to buy a special phone. And these are kind of big and they're a little bit clunky. If we wanted to have a robust satellite data connection, you had to have a big truck or a big setup and big pelican cases that you would set up that you

Pull off of a truck What we're gonna do with AST in partnership with them is we're gonna bring Satellite connectivity and not just voice not just text but full data connectivity to your regular Cellphone that's sitting in your pocket today, and that's pretty exciting So really we're bringing satellite connectivity to the masses. And it's never been that way before. And AST is the first company to do this at scale at data speeds over 20 megabits per second to a regular unmodified cell phone like you and I carry around all day. So when as an AT&T customer, when does this start to affect my service in a positive way?

Since I realize we're talking about what becomes a complement to the existing terrestrial network. Yeah, so exactly. It's a complement to the existing terrestrial network. So we say connecting the unconnected. That's AST's motto. So whether you're in a rural area or it's after a disaster and first responders need to get in and clean up a disaster-stricken area, we'll be able to connect those unconnected users where the network isn't there. We're not given exact timeframes yet. This is the next five in a series of satellites. So they've launched one in 2022, five more. They have 17 more that they are in the process of producing. They've started building the components and they'll start assembling those satellites soon. And we'll see those launches in the

coming months. We're not giving an exact timeframe, but we're really optimistic that in the coming, you know, 18 to 24 months, we're going to see some pretty robust service coming online. But again, no exact dates right now. So does this mean that I'm not going to be driving through certain areas where maybe there's not good phone service and my calls are going to drop out, that that goes away? You got it, Morgan. That's exactly right. And the beauty of this is you're not going to know the difference. You're not going to have to look down at your phone and see, am I on satellite?

Do I have a little satellite icon? Do I have a 5G icon or an LTE icon? We're going to give you seamless connectivity. The device and the network are going to select for you whatever the best connection is. So if it's the regular terrestrial land-based mobile network that we operate today, or if it's the satellite network, we will be able to switch back and forth between those networks, and it'll be seamless to you. You won't even realize that it's happening on your device. Now, just walk me through how all of this came together because AST has been around for a little while.

AT&T was really one of the first big companies to invest in the startup. And then just earlier this year, and you and I spoke when this happened, earlier this year, you forged this commercial partnership. You joined the board of AST as well. So how did all of this come to fruition? Well, if we go back to the beginning, I think it's kind of a funny story.

It's about six years ago. And back then, I was responsible for AT&T's FirstNet program. So we built a network for first responders. And Abel came to visit me. So we were the first wireless carrier that he talked to. And I was the first person inside of AT&T that he talked to and he said, Chris, we've got this idea and he has this PowerPoint deck and he starts going through it with me. And, you know, six years ago, this is satellite. We all knew satellite and how it worked, but nobody really had a dream of connecting a device directly to a satellite, a regular unmodified cell phone.

And he starts telling me about it. I remember thinking in the back of my head, this guy's crazy. But I also knew from people inside of AT&T, because we worked with him for years and years, they said, he's got some interesting ideas, but he's really, really smart. He's really, really motivated.

And he builds great teams to get the job done. And that's exactly what he's done. So over the last six years, we have done an excruciating amount of testing with our AT&T engineers and his really smart engineers. And it's just amazing what he has built and we've built together. And after the commercial news earlier this year, Verizon also came out and said that they're partnering with and forging a commercial relationship with AST. So how does this landscape continue to evolve? What does it mean for AST? What does it mean for AT&T?

And what does it mean for, I guess, the network overall and that continuity between different carriers? Yeah, so we had a choice for the first five and a half years of this project. It was exclusive AT&T and AST. We were the only operator in the US and then he had single operators in many other countries. It was up to AT&T whether we wanted to let Verizon participate or not.

And so we thought long and hard about it. And we said, you know what? We think that bringing another carrier into the fold, a competent carrier who knows what they're doing, like Verizon, bringing another carrier into the fold will probably make the solution a bit more robust. And so we decided to do that. So Verizon will be part of the solution. AT&T is still the core network operator, the ground operator, if you will. So we really have the lion's share of the control of the terrestrial network as it relates to the backbone core. But we are inviting Verizon in to participate as well. So I think it'll be a more robust solution having two really strong operators in the U.S. participating in this.

And I think it's good for all Americans because we're going to see more robust networks. You know, today they're really robust, but they're going to get even better being able to connect you in places that you're not used to having a connection. Just early this morning, we saw SpaceX with the Polaris Dawn mission make history as you had those private astronauts step out and do the first ever extravehicular activity, EVA, spacewalk, testing the new SpaceX suits. But what was particularly interesting to me was the fact that they were beaming all of this back. Basically, in real time, the images were incredible, and they were using Starlink communications to do it.

So if I just take a step back, how are we seeing the competitive landscape around connectivity evolve right now? And do people really fully appreciate the role that space infrastructure is going to play in it? I don't think so. I think, well, I'll say that the people who study it and pay close attention to it, of course, they appreciate it. But the average citizen probably doesn't realize that what we're essentially doing here, you know, like I said earlier, some solutions were purpose built for a fixed connection on the earth. So not a mobile device that's moving around. AST is really unique in the entire industry for what they're doing. They purposely built their system to work with a mobile device that's moving around.

And so what we're really doing at its simplest form is we're taking the cell sites that are, you know, we have tens of thousands of cell sites across America, AT&T does. All we're doing is we're taking those cell sites and we're putting them up in space. And if you think about it from an economic standpoint, instead of having to build cell site after cell site after cell site on the ground, tens of thousands of them, you can instead put dozens of them up in space and get a lot of the same job done. Now, the space-based network can't replace the terrestrial network because you can't get the same data speeds, latency, throughput, all of those things. But still, in rural areas where it may not be economical to build a terrestrial cell site, you know, a fixed steel structure, you can just rely on space instead. So it's really revolutionary what we're doing. And you used to have to have big, clunky equipment to make all that work, but not anymore.

Now you can do it with the cell phone in your pocket. Certainly, Apple has shined a light on this. They have their partnership with Global Star, for example. Just earlier this week, they unveiled their new iPhones, the iPhone 16 lineup. How does this differ from that in terms of that ability to connect and have that seamless transition with space and terrestrial network connectivity, I guess, for lack of a better word. Yeah. Yeah. No, I think Apple has done a nice job of introducing this to people. I think I'll say they've dipped their toe in the water of satellite connectivity directly to a device, but they've just dipped their toe in the water. It's really SOS texting, right? You want

to send a basic text if you've got an issue that you need solved And if you're in a rural area or you're in a remote area, for example We're going way past that. This isn't just texting. This isn't just voice. This is full data connectivity We've done testing in the last year from Midland, Texas in the middle of nowhere where there's no wireless networks of any kind. From Hana, Hawaii, again, no wireless networks of any kind in this area where we've done the testing. And we've been able to get data speeds in excess of 20 megabits per second. So imagine, you know, first responders rolling up onto a car accident. And actually, one of them relayed this story to me years ago.

They were in a pretty remote area. It was a windy road through some mountains. They came upon a car accident. There were people that needed help, but they couldn't actually call for a paramedic. Their radios didn't work. Their cell phones didn't work. They had to drive back out of this mountain pass so they could get a connection, call for the paramedics, and then go back to the vehicle where the people were. Then the paramedics showed up and the paramedics when they're triaging and loading people up in the ambulance, they wanted to send vital signs back to the hospital but they didn't have any connectivity, especially didn't have any data connectivity. AST has the potential to solve all of that. They won't have a problem making a call, they won't have a problem sending vital signs and data back. So this is really a game

changer not only for the average citizen, but for first responders too. And the solutions that are in market today, before AST, those solutions really don't accomplish any of those goals. AST is going to accomplish that. And finally, the service. I know you're not giving me a timeline on when we actually see this up and running, but is it something that's just folded into consumer or businesses' existing service? Is there an extra cost associated with it? How are you thinking about the business model? You're thinking about it the right way, and we don't have an answer to that yet.

We haven't figured out how we're going to fold this into the business model and how we're going to allow consumers to take advantage of it. But as we solidify those plans, we'll definitely let you know. Okay. Anything else to keep in mind as we see these first five production satellites connecting with Earth and so far things running smoothly? No, it's an exciting day for us here at AT&T. The opportunity to connect the unconnected in partnership with AST. I really appreciate your interest in this, Morgan. Thank you. Well, thank you, Chris Sambar of AT&T.

Great to speak with you. And definitely the best live part of the day. I'm glad you said that. That makes me feel better. Thanks. Bye-bye. That does it for this episode of Manifest Space. Make sure you never miss a launch by following us wherever you get your podcasts

and by watching our coverage on Closing Bell Overtime. I'm Morgan Brennan.