New smartphones with satellite connections could answer need for rural connectivity, but cost will be a major factor

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The problem of restrictive broadband or even no cellular service in rural communities is not new. The lack of connectivity continues to make it harder for rural populations to access the information and community that metropolitan areas readily use. "According to a new report from CoBank’s Knowledge Exchange, satellite smartphones could have a profound impact on residents of rural communities as the technology advances and more robust service offerings become available," reports Cobank, a lending cooperative owned by the agribusinesses, rural public utilities and farm credit associations it serves.

Cellular companies have limited rural development due to low returns on investment. CoBank says, "Smartphones with satellite connectivity could eventually prove vital for rural communities, delivering voice, data and broadband to Americans living in underserved markets. . . . . The ability to make calls and send messages in remote areas where no cellular service exists would provide some rural residents with options and flexibility that were previously unimaginable. However, cost will be a key determinant of consumer adoption and the finer details on pricing remain unclear."

Historically, satellite phones have been used for military or high-seas communications. With Apple's introduction of the iPhone 14, which includes a satellite connection for use in emergencies, the options for use of satellite phones is making a dramatic shift. "Apple is providing the service free of charge for the first two years, and it remains to be seen what they will charge after that. However, it is reasonable to assume that Apple will keep the price low and use the service to increase iPhones sales, given its first mover advantage. T-Mobile said satellite services will be free on its most popular plans, but it’s unclear what those plans will cost when T-Mobile rolls out the service in 2024," Cobank reports.

Jeff Johnston, lead communications economist for CoBank, said, “Initially, the service options available through satellite phone connectivity will be limited to basic text and SOS messaging. But as new satellites are launched over the next several years, voice calling and more advanced data applications should become available. And smartphones equipped with satellite technology will work anywhere in the U.S., regardless of cellular coverage.”