Direct-to-Device Market Size Is Uncertain

Direct-to-device (D2D) services enjoy strong demand worldwide, but putting a dollar figure on that potential market is challenging, speakers said Monday at Access Intelligence's Satellite 2024 conference in Washington. Multiple launch providers discussed new rockets coming online. Satellite operators touted the role of satellites closing the digital divide worldwide.

Estimating the D2D marketplace's value is difficult because mobile network operators (MNO) will often offer such services as a way of not losing market share, rather than driving big revenue growth, said Karen Jones, Aerospace Corp. senior project leader-Center for Space Policy and Strategy.

Even a small change in market share for MNOs and handset makers can represent hundreds of millions of dollars, said Qualcomm Vice President-Product Management Francesco Grilli. Operators must ensure they have the latest and greatest service for subscribers, and thus the D2D "arms race," he said.

"There's enough room for a lot of people" in the D2D marketplace, said Lynk Global Chief Commercial Officer Dan Dooley. "Just do the math," he said repeatedly, pointing to the billion people on Earth without mobile connectivity and billions more who experience periodic disruptions in coverage.

Beyond ultra-remote areas without coverage, potential D2D use cases include more-populated regions where, for example, a stretch of road lacks coverage, said Anton Monk, Viasat chief technology officer-wireless initiatives. That also makes the possibility of harmful interference a bigger and more complex issue than if it involved rural areas only, he said. Monk said there also could be over-the-top D2D applications, such as apps that incorporate D2D connectivity.

Satellite connectivity is starting to make a dent in the globe’s digital divide, but closing it isn’t imminent, satellite operators said. There's no way to bridge the digital divide without satellites, as there are too many places where fiber is prohibitively expensive, said Eutelsat Chief Operating Officer Massimiliano Ladovaz. “We are just at the beginning” of satellite connectivity reaching the world's unconnected, he said.

Broadband demand “is effectively unlimited,” said John Gedmark, Astranis Space CEO. He said the challenge is “to get as many things in the sky as we can.” Astranis launched its first small satellite into geostationary orbit (GSO) last year, with four more now planned within months. He said the company will accelerate its launch cadence “quite quickly,” with a goal of having 100 in GSO by decade's end, covering nations such as Argentina and the Philippines.

Scaling up satellite efforts in closing the digital divide means operating like MNOs as well as partnering with them, said Intelsat Senior Vice President-Global Sales Media & Networks Jean-Philippe Gillet. "The satellite industry has to stop thinking like the satellite industry" and instead should think like MNOs, embracing unified networks, Gillet said. Intelsat partnering with Africa Mobile Networks -- with the two deploying 4,000 base satellite antennas across parts of Africa -- is profitable and doesn’t rely on government subsidies, he said.

While most of the digital divide opportunity is in developing nations, the digital divide is "everywhere,” Hispasat Chief Commercial Officer Ignacio Sanchis said. Fiber passes more than 90% of Spain's households, but there remains a notable number of homes that will never have it, he said. Under a European Union-subsidized program, Hispasat acts as a wholesale provider to telcos and others, offering 200/5 Mbps service that they then retail to subscribers at a regulated price of roughly $38 a month, he said.

Asked about SpaceX competition, Sanchis said it's positioned as a more-expensive, premium service in Spain but has started cutting prices dramatically. He said Hispasat's competitive advantage is it's working with established service providers, whereas SpaceX has to drum up subscribers. Ramesh Ramaswamy, senior vice president-international division, EchoStar's Hughes Network Systems, said Starlink's upfront prices "are a huge barrier" to SpaceX in Latin America. SpaceX also "seem[s] to be flouting every rule" regarding local call centers. He said the latency gap between SpaceX's service and Hughes' is closing, with the latter "competing quite effectively."

Asked about the end of the Qualcomm/Iridium D2D partnership (see 2311090077), Grilli said it was “a very friendly separation.” He said the Iridium approach, based on proprietary waveforms, turned out to be problematic, so both companies are working toward standards-based non-terrestrial network offerings. He said that while there were concerns among Android handset makers that Apple's partnership with Globalstar offering satellite-based emergency messaging could be "devastating" competitively, the handset makers opted to wait for standards-based solutions.

Intelsat "is very close" to investing in a technology company that has proven D2D capabilities and agreements with large MNOs. The aim is development of a D2D service using Intelsat spectrum, CEO David Wajsgras said.

Launch

SpaceX launched more than 80% of all satellites in 2023, most were its Starlink satellites, said Claude Rousseau, Northern Sky Research analyst. Minus Starlinks, SpaceX still launched 58% of satellites, he said.

SpaceX is on track for 148 launches this year and aiming for more in 2025, said Stephanie Bednarek, SpaceX vice president-commercial sales. She said SpaceX isn't concerned about future launch site availability.

The 45th launch of Rocket Lab's Electron rocket occurred last week, with the 46th later this week, said Adam Spice, chief financial officer. Rocket Lab’s larger Neutron rocket will come to market later this year with the aim of causing SpaceX “a few sleepless nights,” he said.

Arianespace Chief Commercial Officer Steven Rutgers said the inaugural flight of the Ariane 6 rocket should be in mid to late June. United Launch Alliance is transitioning from heritage Atlas and Delta rockets to Vulcan, said Mark Peller, vice president-Vulcan development. With ULA having the inaugural flight of Vulcan in January, it's now focused on achieving a steady cadence, with multiple Vulcan launches planned for this year. Peller said that while launchers had "stretched the capabilities" of East Coast launch site capacity, he didn't foresee problems.

SpaceX is "an 800-pound gorilla" in the launch space, with different levels of resources and access to capital than most, Spice said. Blue Origin, owned by Amazon founder Jeff Bezos, will represent a similar challenge, he said. The launch marketplace has yet to reach stability due to questions about "how all these factions ultimately play," Spice said.

Satellite 2024 Notebook

Before the end of the second quarter, Intelsat will decide whether it will pursue having a medium earth orbit constellation, Wajsgras said. He said government customers are “quite interested” in such capabilities. “We can see a world for Intelsat” in which the company operates in low, medium and GSO orbits, he said.

Asked about satellite industry consolidation, Wajsgras predicted "there's more to come." He said there would be some consolidation among large legacy satellite operators. Moreover, consolidation could hasten the pace of industry bringing technologies and capabilities to market, he added.

Multiple operators were invited to join the Mobile Satellite Services Association, and likely will, Viasat's Monk said. The group also anticipates MNOs joining. Viasat is a founder of MSSA, unveiled last month (see 2402090013). Qualcomm is “seriously considering joining,” Grilli said.