ORLANDO, Fla. — Shares in direct-to-smartphone satellite players tumbled Jan. 29 after Apple enabled iPhones with a T-Mobile cellular plan to join beta tests for SpaceX’s rival Starlink service in the United States.
The capability was discreetly rolled out earlier this week with Apple’s iOS 18.3 software update, Bloomberg reported Jan. 28.
Shares in Globalstar, which enables connectivity beyond the reach of cellular towers on the latest iPhones via a far-reaching partnership with Apple, closed down nearly 18% the following day. Constellation developer AST SpaceMobile slipped 12%.
Canada’s MDA, which is building at least 17 satellites for Globalstar after Apple agreed to cover most of the costs to replenish the constellation, also saw its shares fall more than 9%.
Unlike Starlink and AST SpaceMobile, which rely on cellular partnerships for the radio waves needed to provide direct-to-smartphone services, Globalstar uses its Mobile Satellite Services (MSS) spectrum licenses.
“Combined, today’s price action in Globalstar and satellite manufacturer MDA suggest a real investor fear that SpaceX could disintermediate the Apple-Globalstar partnership,” said Adam Rhodes, a senior telecoms analyst at Octus.
“However, it appears to us that there is room for both services. Based on the information we have seen, we do not anticipate that Apple views the T-Mobile-Starlink service as a replacement for the Globalstar MSS network, but rather it is choosing to enable the added feature on its T-Mobile phones.”
Starlink’s beta service is initially limited to SOS and basic texting, similar to Globalstar’s space-enabled iPhone connectivity, until its constellation expands and regulatory approvals allow for higher satellite power.
Last year, Globalstar disclosed Apple’s plans to inject $1.7 billion into a new constellation to enhance space-based communications for iPhones, though details remain undisclosed.
Apple and Globalstar did not respond to requests for comment.
B. Riley analyst Mike Crawford noted that Apple’s two binding contracts with Globalstar extend well into the next decade, ensuring both capital expenditure (capex) and recurring service revenues.
“In a perfect world, Apple will reap vast utility from this partnership,” he said.
“Regardless, Apple is contractually committed not only to pay recurring wholesale service revenues but also to reimburse 95% of capex for [Globalstar’s] replenishment satellites over the service life of the existing constellation.”
MDA Space is also likely one year into Globalstar’s extended MSS network constellation, he added, citing progress on replenishment satellites that SpaceX is slated to begin launching this year.
While SpaceX has already launched hundreds of Starlink satellites with direct-to-smartphone payloads, Crawford emphasized that this “will not be a winner-take-all market.”
He noted that SpaceX must also either modify its current satellite architecture or secure Federal Communications Commission (FCC) approval for a band-specific power flux-density (PFD) adjustment to enhance services. Meanwhile, he said AST SpaceMobile’s satellites already comply with the FCC’s proposed regulatory framework for direct-to-smartphone services.
AST SpaceMobile, which has partnered with AT&T and Verizon in the United States, is still awaiting permission to begin beta tests after deploying its first four operational satellites last year.
