US operator AT&T struck a deal with AST SpaceMobile to provide what they claim will be the first full space-based broadband service direct to common mobile phones, although a launch date was not specified.

The six-year agreement replaces the pair’s previous memorandum of understanding (MoU) signed in 2020.

AT&T is also a strategic investor in the direct-to-device satellite player (a “$20 million revenue commitment”, according to an AST SpaceMobile investor presentation last month) alongside Google and Vodafone Group. The trio have invested a total of $110 million of ten-year subordinated convertible notes.

In addition to AT&T, AST SpaceMobile is collaborating with Rakuten Mobile, Rogers Communications, Orange, Vodafone and American Tower to address internet connectivity gaps, but the US operator is the only commercial agreement to date.

A representative for AT&T told Mobile World Live (MWL) it is too early to give a specific date for when the service will be available, but now there is a formal agreement in place “we’ll be working towards commercial launch”.

The representative told MWL the service is designed to integrate with the operator’s wireless network and “when needed, fill coverage gaps in remote and otherwise off-grid locations by connecting with our customers’ existing devices”.

In its Q1 earnings report, released yesterday (15 May), AST SpaceMobile stated its first five satellites will enable a nationwide, non-continuous service across the US with more than 5,600 cells in premium low-band spectrum.

The company previously targeted Q1 2024 for the launch of five of its low-earth orbit BlueWalker 3 satellites, but AST SpaceMobile CEO Abel Avellan stated on the earnings call it will move those birds to the launch site between July and August, with launches to occur shortly thereafter.

It will take several months for the birds to reach the correct orbit.

AST SpaceMobile expects to spend $150 million on the first five birds, with more than 95 per cent expended to date. For the next two quarters, it will spend approximately $25 million to $40 million on capex.

While some of AST SpaceMobile’s rivals have launched SMS or emergency messaging, Avellan stated the work with AT&T will enable text, voice and streaming on the broadband service across a range of tariffs.

“We believe there is a significant part of the population that will be willing to pay for the service,” he explained. “They move in and out of connectivity in the US, so we have a multitude of packages”.

Chris Sambar, head of network for AT&T, will be appointed to the satellite provider’s board of directors in the coming months.

In 2023, AT&T agreed to lease spectrum to the non-terrestrial network specialist to further its plan to enable communication with standard mobile phones.

AST SpaceMobile faces stiff competition from other direct-to-device service providers including Lynk Global, Starlink and Amazon’s Project Kuiper.