2degrees chief executive Mark Callander says local customer testing will begin shortly.

He’s already used the satellite service to make voice and video calls from his stock-standard smartphone (see video above).

As with SpaceX-owned Starlink and pending competitor Amazon Leo, AST SpaceMobile’s satellites will act as “cell towers in the sky”, allowing partners like 2degrees to offer coverage in “blackspots” outside their terrestrial mobile networks, or where cell towers have been taken out by a natural disaster.

There’s also a key difference from Starlink. AST says its satellites’ tennis court-sized arrays – with solar panels on one side and 4G and 5G antennas on the other – are powerful enough, by dint of their size, to penetrate roofs. AST staff on hand for today’s opening confirmed that capability.

For some analysts, that sort of capability has raised questions about the future of terrestrial telcos, although there are some practical and political hurdles on that front (more on which shortly).

For Callander, AST’s extra grunt means he can promise full-blooded voice, text and data from day one of 2degrees’ satellite-to-mobile service.

One NZ’s satellite-to-mobile service was text-only when it launched with Starlink in December 2024.

Even today, One NZ (and Spark, which has now joined it in the Starlink camp) are restricted to “lite” versions of WhatsApp and other apps.

While Starlink has more than 10,000 satellites in orbit, only 600 or so are its larger, second-generation model capable of supporting satellite-to-mobile data.

AST had demonstrated satellite-to-mobile speeds of close to 100 megabits per second with its “Block 1” BlueBirds – that is, close to the download speed of ultra-fast broadband (UFB) fibre when it was first launched in New Zealand – and has promised twice that for its new “Block 2” satellites.

Starlink’s satellite-to-cell service offers a modest seven to 17Mbps (megabits per second) – which is why One NZ, Spark and other telcos have had to restrict their customers to special stripped-back or “lite” versions of popular apps.

Ground stations are used to connect satellites to the terrestrial internet. AST says it carries out all processing at its ground stations and none on its satellites, which it frames as a performance point of difference from the competition.

Eat the telcos’ lunch?

Today, Starlink (and soon AST and Amazon’s Leo) is nibbling around the edges of traditional telcos’ business, offering a complementary service to help them fill mobile blackspots, and to provide service for remote rural customers who are otherwise uneconomic to service.

But it’s an increasingly large nibble. Starlink last year passed Spark to become New Zealand’s largest rural internet provider as it grew from 53,000 to 85,000 local customers (and here we’re talking about Starlink’s dish-in-your-roof broadband service for homes and small businesses).

City-fringe customers are buying Starlink. You can buy its dishes at a Bunnings in suburban Westgate.

Is Callander worried that Elon Musk – who has talked about launching up to one million satellites and launching terrestrial cell sites in the United States for a Starlink-branded mobile service – has plans to consume the whole industry?

“Satellite will not eat the lunch of New Zealand’s local networks,” Callander said.

“It is complementary technology, not a replacement for fibre and mobile. Our terrestrial networks will remain the backbone of connectivity for decades to come, providing the speed, capacity and coverage New Zealanders rely on every day.

“Satellite adds a valuable new layer to that mix, particularly by extending connectivity into remote areas and strengthening resilience when terrestrial services are unavailable.”

Local control

Some analysts – including Harbour Asset Management’s Shane Solly – see the threat of Starlink eating telcos’ lunch as a key reason that many telcos worldwide, including Spark, have had depressed share prices over the past year.

But a key component for local mobile service is radio spectrum, which is owned by Governments around the world. Telcos can only lease it.

Prompted by the Herald to comment on the “satellites cutting your lunch” threat, Spark chief executive Jolie Hodson said our Government needed to consider sovereignty and resilience issues as it divvied up spectrum (which is sometimes auctioned to eligible parties, and sometimes directly allocated).

Callander struck a similar note.

“[Satellite-to-mobile’s] role will grow and become increasingly important, but the future is satellite working alongside fibre, 5G and, in time, 6G, not displacing them,” the 2degrees boss told the Herald.

“It is also important to consider who owns, controls and operates critical communications infrastructure.

“New Zealand has established regulatory and legislative safeguards to protect national interests, data security and consumer privacy, and maintaining those protections will remain important as new technologies emerge.

“As with any rapidly evolving technology, it is sensible to assess claims about future capabilities carefully and on the basis of evidence rather than rhetoric.”

End to Starlink monopoly

Technology Users Association of New Zealand chief executive Craig Young, who was on hand for today’s opening, told the Herald: “I’m glad to see them offering another service as well, because obviously that brings more competition to the mobile market and also reduces our reliance on one particular network.”

(Like everyone at the event, Young avoided mentioning Starlink or its founder by name.)

Young recently complained that many rural Kiwis had no choice but to lump Starlink’s recent round of price increases in the run-up to its parent company SpaceX’s IPO (initial public offering).

Young has, however, voiced concern about the impact of the satellite multinationals on the network of small provincial and rural wireless internet providers, or wisps, some of which have struggled or gone out of business lately.

Space and Communications Minister Paul Goldsmith, who officially opened the ground station, said it would help boost competition and help with New Zealand’s disaster resilience.

Goldsmith also highlighted the ground station and 2degrees as an example of “privately funded infrastructure” filling service gaps.

It was another indication that the minister is unlikely to back Chorus’ proposal for a multibillion-dollar public-private partnership to boost rural coverage.

2degrees – by dint of inheriting Vocus NZ’s network infrastructure business when it merged with Orcon – has its hands in several ground station pies, including a controversial facility it’s constructing for Starlink in central Auckland.

But the company says the Marton ground station is for AST only. Expansion is being considered.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.