(Source: Jose Luis Stephens/Alamy Stock Photo)

Deutsche Telekom, Orange, Telefónica and Vodafone firmed up plans for a potential joint bid for mobile satellite spectrum in Europe to build a homegrown alternative to Starlink and other deep-pocketed rivals in space.

The four carriers signed a letter of intent to explore how they can work together to acquire European mobile satellite services (MSS) spectrum rights that are due to be allocated next year, confirming Bloomberg's report last month.

In broad terms, they intend to use the spectrum to provide wholesale access for mobile satellite services, known as direct-to-device (D2D), to all mobile network operators based on an "open and non-discriminatory" model. They expect to build the ground network infrastructure and set up "critical coordination and monitoring functions in Europe," but they do not plan to invest in their own satellite constellation.

For the satellites, the group will need a partner. The partnership between the four carriers and satellite operator would "combine European governance and market access," according to the joint statement released today.

The carriers said their ambition is to "meet customer demand for universal coverage in underserved areas, strengthen the resilience of public networks, protect critical communications, and support the development of a European constellation."

The move is also aimed at supporting the European Commission's technical and legal criteria set to "strengthen Europe's sovereignty, security and resilience in critical connectivity infrastructure," they said. "[The initiative] will ensure responsible European governance of key space infrastructure."

The European initiative also has shades of the D2D satellite joint venture launched in the US between AT&T, T-Mobile and Verizon.

"Behind the sovereignty dressing here is a very commercial concern. Europe's operators want to avoid becoming effectively MVNOs for satellite coverage, selling somebody else’s service on somebody else’s terms. Starlink's push into the US mobile market makes that concern harder to ignore and has launched MNOs into a defensive posture. Securing MSS spectrum would give them a stronger hand in negotiations," said Luke Kehoe, lead industry analyst at Ookla.

Who's in control?

Kehoe added that, "The sovereignty claim will also be tested in the satellite contract itself. European spectrum rights and ground infrastructure only go so far when a separate partner controls the constellation. And independent MVNOs and their customers need to benefit on fair terms too. Many will highlight that sovereignty should not become a license to protect incumbents from competition, so Brussels is increasingly being forced to walk a fine line between the two competing objectives."

The operators noted that the letter of intent is to explore options for cooperation and that existing satellite relationships among each of the operators remain in place.

For example, Deutsche Telekom offers Starlink satellite-based broadband for businesses and it plans to offer Starlink Mobile's new D2D service in 2028. Telefónica's UK MNO Virgin Media O2 provides a D2D satellite service via Starlink [ed. note: which our very own Iain Morris saw in action in the mountainous Snowdonia region in north Wales].

Orange has teamed with AST SpaceMobile alongside the US operator's joint venture with Vodafone, Satellite Connect Europe.

Satellite Connect Europe welcomed the operators' news, posting on LinkedIn that it looks forward "to supporting operators across Europe as this important initiative develops."

EU spectrum up for grabs

Prized MSS spectrum for D2D in the 2GHz band will be made available in Europe after the existing licenses expire in May 2027. The spectrum is currently allocated to EchoStar (to be transferred to SpaceX following spectrum acquisition) and Viasat, which each hold rights to 2x15MHz blocks.

The EC announced plans earlier this year for allocating frequencies that would reserve most of it for EU-based operators. According to the proposal, the band would be divided into three parts with one-third reserved for government use that would integrate with the EU's IRIS2 project (that is, Infrastructure for Resilience, Interconnectivity and Security by Satellite).

The other two-thirds would be for commercial use, including D2D, IoT and in-flight services. Of this portion, one-third is to be reserved for European new entrants and the final third will be open to EU and non-EU based operators.

That means the likes of Amazon Leo, Starlink and AST SpaceMobile would be limited to a 10MHz block and would be competing with European operators for the rights.

US-EU spectrum spat heats up

The EC's proposal, not surprisingly, has not pleased the US. FCC Chairman Brendan Carr has said the regulator would place similar limits on European satellite operators under the agency's longstanding "reciprocity and nondiscrimination" approach.

Andrew Puzder, US Ambassador to the EU, warned that European companies should be worried about retaliation that would be "devastating" for them considering the size of the US market, if plans go ahead to restrict access to spectrum, in an interview with the Financial Times (registration required).

The European telco initiative, with its emphasis on sovereignty, comes at a time when tensions are high over SpaceX satellite communications following disputes about last week's disruption to Starshield services in Ukraine.

While Starshield is the military-grade version of Starlink, and not in the consumer service realm that the telco initiative would be operating, the controversy illustrates Europe's fears of over-reliance on non-European technology that it does not control.