Nokia has reached an agreement with Celestial Acquisition Corp. to spin off its space communications business Modul8.

The Finnish vendor confirmed it has entered into a definitive agreement with Celestial to spin the unit into an independent company.

Modul8 operates as a venture within Nokia Bell Labs. The company builds communications plus hardware, software, and services—engineered for the harsh conditions in space.

In a blog post, Chris Jones, VP of strategic partnerships, Nokia, noted that the agreement will “give Nokia’s space venture the dedicated structure and funding to move faster, turning breakthrough ideas into real-world capabilities for the growing space economy.”

As highlighted by Jones, Modul8 deployed and operationalized the first cellular communications network on the Moon as part of the IM-2 mission last year.

The unit is working with Axiom Space to integrate its lunar surface communications system into the Axiom Extravehicular Mobility Unit (AxEMU), which is the next-generation spacesuit designed for lunar exploration as part of NASA’s Artemis program.

Nokia didn’t give a specific reason for its decision to spin off the unit, though the vendor will likely focus its attention on its core network offering.

The vendor said that establishing an independent space-focused unit is the best path for success.

“While the venture is early in its revenue growth curve, an independent path is intended to help the business attract growth capital, move from prototypes to products more quickly, and scale deployments to meet rising demand without losing the Nokia Bell Labs rigor that got us here,” said Jones.

Nokia will remain as a major shareholder in the company, noting that it will continue to focus on space and non-terrestrial connectivity (NTN) as it continues its development of future networks, such as 6G.

“Nokia remains actively involved in space where it supports its core business and customers, including work on NTN,” added Jones.

“By establishing Modul8 as a focused, independent company, we believe it will be better positioned to access dedicated growth capital, accelerate innovation, and serve the rapidly expanding space economy while continuing to build on its strong technical foundation developed within Nokia Bell Labs,” said John Dow, CEO and co-founder of Modul8.

Nokia expects the spin-off to conclude over the summer.