FEATURE INTERVIEW: Non-terrestrial network (NTN) player Skylo – fresh from big US operator deals with Verizon, Charter and Comcast – told Mobile World Live (MWL) it is gearing up to support satellite voice services on smartphones this year but poured cold water on the business case for supporting fast mobile broadband and video services.

In an interview for MWL’s latest podcast focused on the Satellite and NTN market, Skylo co-founder and chief product officer Tarun Gupta said the company is set to build on its flagship Verizon deal with potential voice applications.

The operator initially offered emergency messaging and location sharing across North America using Skylo’s kit and compatible smartphones (Google Pixel 9 and Samsung Galaxy S25) before extending this last month to a text messaging service for friends and family using SMS over satellite when customers are out of the reach of terrestrial mobile networks.

Now Skylo wants to be able to support its mobile operator customers with voice services from space. Gupta said the company’s partners demoed Push-To-Talk (PTT) voice services at MWC25 Barcelona but bigger plans are ahead. “What you’ll see is, by the end of the year, us doing probably OTT voice, and then in about a year you’ll probably see native voice,” noted Gupta. “It’s just going to be some regulatory work that we need to work through on that, but we believe that having a native experience in your hand, where you don’t have to change user behaviour, is a huge benefit to the industry.”

Unlike competing ‘direct-to-device’ (D2D) satellite services from the likes of Starlink, AST SpaceMobile and Lynk Global, Skylo is a wholesale provider that does not own satellites but instead connects its NTN kit to satellites from Viasat, Ligado, Terrestar Solutions and EchoStar.

And also unlike AST and Starlink, Skylo isn’t convinced there is a business model for superfast mobile broadband services over satellite.

“We want to make sure that we are going hand in glove with a consumer willingness to pay and a business model with the technology. Just because the technology can do video to your cell phone, I’m not convinced that is something I’d want to pay $15 or $20 a month for frankly. I’m already paying $40, $50 a month for my cellphone bill now, adding another 30% to 50% of that for that x percent of time when I’m out of cellular coverage, it seems like it’s not something I would be willing to pay for even if the technology is there.”

Skylo’s fresh approach to the D2D satellite market has also caught the attention of European operator giant Deutsche Telekom, which last month claimed Europe’s first successful trial of a D2D SMS over satellite to a commercial smartphone (Pixel 9) using Cosmote’s Greek mobile network. The trial triggered Cosmote parent Deutsche Telekom to publicly state it aims to launch the first commercial D2D messaging services in Germany and Europe by the end of this year.

Investment
Skylo has also attracted recent VC investment, adding an extra $30 million to its coffers in a round led by Nokia’s NGP Capital. The fresh funding brings its total investment raised to $183 million and will see the company ramp up its engineering base.

Gupta says one other focus of the investment will be on educating the market and its potential mobile operator customers: “How does it work? What are the use cases? And recognising that it’s not around watching Netflix when you’re out hiking in the middle of the forest, or YouTube, and not necessarily those high bandwidth services that people are looking for, but really that emergency 2G, 3G type services people need.”

Gupta argues there’s a similar level of marketing and awareness needed on partners beyond operators too. “When you think about the work that we’ve done, for example, with Android, it’s really opening up the OS to make sure that the phone and the applications know how to use NTN, and how to really switch between cellular and NTN and WiFi and all those things. So how do you make that process seamless?”

Competing with bigger players
Skylo believes its approach to the D2D satellite market – working with established satellite companies, smartphone vendors and chipset companies such as Qualcomm and Mediatek and then integrating its NTN system, essentially a virtualised RAN and core integration, across that ecosystem – is also far more cost-efficient than the strategy that new satellite players such as AST and Starlink are taking. It’s also, he claims, more technically astute.

“Frankly, the satellite portion is a very small part of the overall network and network layer that has to happen. You have to have a billing system, you have to have a NOC [Network Operations Centre], you have to have customer support, all those things that we raised that additional $30 million for to drive that side of the business. Whereas if you look at some of these guys, $30 million is the cost of one bird… and they need anywhere from 200 to 300 birds to launch a service… And if you don’t have any experience on building and operating and being able to maintain a network integration and a connectivity platform, it’s not going to work.”

What’s in it for operators?
Mobile operators clearly see D2D satellite as a vital technology in helping them close the so-called ‘coverage gap’, and many are hedging their bets when it comes to choosing their satellite partners. Skylo’s big operator customer Verizon, for example, has also invested in AST SpaceMobile and plans a major launch together, and Verizon customers can also use the T-Mobile/Starlink SMS service that’s currently in beta.

But the jury appears out on whether this can become a major new revenue generator for operators.

As Skylo’s Gupta notes, that issue isn’t helped when the might of Apple is offering SOS messaging for free on iPhones thanks to a deal with satellite player Globalstar.

He believes there are ways operators can monetise these services without charging additional revenue. He gives the example of an operator using it as an opportunity to migrate customers from a more basic lower tier package such as prepay, to a higher-ARPU postpaid plan offering D2D services.

“Churn is quite high and quite an expensive proposition for the operator. So this is also a way to get retention. What we’re also finding is operators are saying that for a low usage scenario, [NTN] prevents [them] from having to put up another cell tower, which is saving [them] capex.

“I think if you’re looking for a dollar to dollar correlation, say for example we charge $1 and the carrier then charges $1.10 or whatever [for satellite connectivity], I don’t necessarily think that is the business model, because there are multiple ways here to make NTN work for an operator.”

Gupta claims Skylo’s decision to partner with traditional satellite players and use their spectrum (rather than the AST approach which requires mobile operators to use their own prized cellular spectrum) will save operators money that way too.

“Each of these [operators] is giving up at least 10 megahertz of spectrum to each of their satellite partners. That’s a very expensive proposition for the MNOs. They spent billions of dollars of this, typically at an auction basis, at least in the US, and so to give up that value density for satellite is very, very difficult, in my opinion, as a business model.”

Full interview
Elsewhere in the podcast interview Skylo’s Gupta discusses the company’s desire to get its technology working on more smartphones, as well as services launched in Brazil, Australia and New Zealand. Plus Gupta reflects on Verizon’s SOS service already having saved multiple lives in emergency situations. Listen to the full podcast interview here.