AT&T Exec on How OneWeb’s LEO Connectivity Expands Options for Telcos

One of the deals of 2021 saw AT&T partner with OneWeb to bring satellite-based connectivity to AT&T’s business customers who need connectivity in remote and challenging locations. This is a vote of confidence in Low-Earth Orbit (LEO) satellite connectivity that could have an impact on satellite’s future working with telcos.

AT&T’s business fiber network enables high-speed connections to over 2.5 million U.S. business customer locations, and more than 9 million business customer locations in the U.S. are within 1,000 feet of AT&T fiber. However, there are still remote areas that existing networks can’t reach with the high-speed, low-latency broadband that is essential to business operations.

John Nolan, AT&T vice president of Global Connections and Alliance Management, is responsible for the partnerships that improve AT&T’s network reach. Nolan manages AT&T’s access spend, and spends billions of dollars to buy last-mile connectivity to service the company’s domestic wireless footprint needs and enterprise customers around the world.

“The more rural the area, the fewer choices I get. Sometimes we don’t have a choice at all. That is why we are excited about the relationship with OneWeb,” Nolan tells Via Satellite.

While AT&T may have had a rich history on working with the satellite industry, Nolan admits that AT&T is excited about Low-Earth Orbit and OneWeb’s business model. OneWeb has agreed to provide AT&T with low-latency bandwidth covering Alaska and the northern part of the United States, then expanding to all of the United States, and outside of the United States.

“We are looking forward to having another option in our toolkit when it comes to a customer needing bandwidth at a location. Today I have to tell them it is extremely expensive as there is only one provider. In some cases, I have no option, which they never like hearing,” Nolan says.

When asked if LEO could be a “gamechanger” for AT&T, he says: “I think it is [a gamechanger], only because customers appetite for low latency and bandwidth continues to grow and LEO offers additional capability in that space. Traditional satellite players didn’t necessarily have a solution that fit our needs here. I do think it is a gamechanger, but we are still in the early innings in how that will shakeout. We have been watching it for a while and we are excited about the capabilities they will bring to market.”

The agreement is also huge for OneWeb. Neil Masterson tells Via Satellite that it makes OneWeb bona fide in other parts of the world. “AT&T is well known for their technical prowess. It is significant for us economically. It is significant for us in terms of the U.S. market. But, it is possible to replicate it in other parts of the world. That is why we are excited by it,” Masterson says.

This past year the industry has seen some interesting deals with satellite players and telcos, like OneWeb with AT&T and BT, and Eutelsat with TIM and Deutsche Telekom. While telecoms and satellite players have worked together in the past, it is clear going into the 5G era, there may be more chances for satellite to be a greater part of the communications ecosystem.

Nolan says that while telecom providers have always worked with satellite providers, the question is how this will develop in the future. “What you are starting to see is the ability to grow these relationships and do more with the technology. It will boil down to the economics and business models of those providers versus what other options available. But, I think it bodes well for both industries,” he says.

In terms of the consumer market, Nolan believes LEO operators will offer additional choice with better economics to bridge the digital divide in the United States, but success in the consumer market will boil down to the business model and the economics associated with the equipment.

“There will always be challenging locations. As this evolves, you will see more and more consumers leverage LEO to reduce that digital divide,” he says. “It is too early to tell how big it gets. Fiber will be the preferred means of connectivity where you can make a business case for it, but I don’t think you will be able to deploy fiber everywhere. It will boil down to how the LEO operators solve the challenge of equipment and upfront costs for it to be a viable option in the consumer space.”

The importance of connectivity and reducing digital divides has never been so stark as during the pandemic. Whether in areas such as healthcare or education, one of the best ways to fight the pandemic is having up-to-minute data, that will allow authorities to make decisions. Even in a strongly developed market such as the U.S., the changes have been profound.

Nolan says the pandemic has reshaped the collective mindset of where people can live and work. For those lucky enough to have a holiday home on the beach or a lake house in the woods, a strong network enabled them to do their jobs just as effectively as in an urban setting. Nolan sees a new normal where people work in the areas of their choosing, and LEO could enable that.

“I think LEO will change things and give more options. I doubt it could displace fiber in urban or semi-urban areas, but don’t under-estimate the desire for people to live where they want to live. If connectivity is a requirement to live in those locations, satellite will play a key role going forward for those people,” he says. “While I connect 2.5 million business connections and roughly 9 million locations that are within 1,000 feet of my fiber network, there are always going to be business locations that can’t be reached by fiber. This will play into that, and I will have options for them.”

The telecommunications industry is working to bridge the digital divide, and the pandemic shined a spotlight on the inequality. Nolan gives an example of how it impacted his team at AT&T.

“I have someone from my global team that was outside the U.S. throughout the pandemic, and she didn’t have access to quality connectivity. She was unable to use her camera. If somebody doesn’t have their camera on now, it is a lot different than pre-pandemic. You expect to see people on video. For that, you need a reliable and affordable high-speed connection,” he says.

The work with OneWeb could signal a new era for AT&T’s relationship with the satellite industry. While it is an enterprise play, rather than a consumer one, it could prove compelling to some of AT&T’s business customers. AT&T serves all kinds of enterprise customers, big and small.

Nolan says it is never fun to sit in front of an executive or a CIO of one of those companies and tell them that AT&T cannot reach a location through fiber, or that alternatives don’t provide the quality of connectivity these customers need. He gives the example of a customer in Venice, Italy, where it would take AT&T three years to equip them with fiber. LEO would help in a situation like this.

“Bringing something to bear that has a viable set of economics that delivers the speed, the quality, the latency and bandwidth they need for the application is huge for us. It is very complementary to what we are already doing. If we can ultimately roll this out to support our 5G network, it will help us get 5G to people in more places,” he says.

While AT&T has used satellite in the past, Nolan admits it was always a trade-off between the economics and the bandwidth and latency. There have been locations in the past, where it was not a question of affordability for certain customers, but the technology did not meet their needs. Some solutions did not have low enough latency or bandwidth for the costs customers were being asked to pay. While AT&T has used satellite-based solutions for many years, LEO opens the door for a new chapter in that relationship.

“The demonstrations I have seen for LEO when it comes to latency, bandwidth, and throughput have been very impressive,” Nolan says. “As the LEO constellations come online, will their business support a wholesale business model like OneWeb? From at technology perspective, we are really excited to work with them, but there are still challenges that they are going to face as they deploy more and more assets. As the LEO model matures, working with the likes of AT&T is probably good for both parties.” VS