There is a race to build a new set of satellite-enabled telecom services for consumers, enterprises, and governments. In the Middle East, the D2D landscape has not been explored extensively yet, however, the rest of the world appears to be honing in on this opportunity.
Basic services for emergency communication, simple text messages, and IoT monitoring have already started, and moving forward, integrating satellite and terrestrial mobile networks could unlock new revenue for the satellite, semiconductor, and telecom industries.
D2D to Expand Global Connectivity and IoT
Deloitte predicts that more than 200 million smartphones boasting satellite connectivity will be sold in 2024, and these phones are expected to contain about USD 2 billion of special chips.
Space companies are now developing satellites that communicate directly with smartphones, while phone manufacturers are incorporating affordable chips to enable these satellite connections. These advanced direct-to-device capabilities could enhance two-way communication and expand the number of connected IoT devices in society.
According to the Center for Space Policy and Strategy, ubiquitous connectivity demand, lower costs for launch and satellite production, and increased synergies from network convergence and enterprise efficiencies are all key market drivers for D2D.
D2D capabilities are a combination of SATCOM technology, existing mobile network operator (MNO) infrastructure, and the rapidly expanding IoT market. The foundation for wireless networks, including IoT, SATCOM, MNOs, and D2D, is supported by international industry consortium standards, such as 3GPP, which has been working on non-terrestrial networks (NTN) standardization.
Among the different presumptions of this market’s value, Northern Sky Research projects that new satellite D2D services could attract up to 386 million users by 2030. Over the next decade, it could generate over USD 65 billion in cumulative revenues for the satellite industry.
The Rise of Direct-to-Device Services
Basic emergency services via satellite are already in operation, with consumer, enterprise, and the government showing more interest in D2D services.
Those who are pushing for D2D services foresee a future governed by seamless connectivity. At present, by utilizing LEO satellites, D2D technology aims to offer coverage in regions where terrestrial networks are not available or remain unreliable, such as in remote areas, disaster zones, and maritime environments. This could greatly impact industries like agriculture, transportation, and emergency response, along with improving connectivity for people in underserved regions.
The rise of D2D came after decades of progress in terrestrial and satellite networks, starting with satellite backhaul for 2G and 3G in remote areas, and now evolving into non-terrestrial networks (NTN) that integrate with 5G.
As a result, D2D services also have the potential to strengthen existing mobile networks by adding an extra layer of connectivity. This could unlock new possibilities like global asset tracking, remote monitoring, and IoT applications, while boosting network resilience and redundancy.
One technology advancement related to this is Netcracker’s new Digital Satellite Solution, which is helping satellite operators to expand their communication offerings through deeper integration with telco domains. This will help maximize their value in this growing market and deliver differentiating communication experiences.
Another example is Iridium’s NTN Direct service, which aims to be the world’s first truly global 5G NB-IoT offering. "When it comes to providing D2D, we don't have to be first, but we have to be the best," said Matt Desch, CEO of Iridium. The service allows smartphone companies, OEMs, chipmakers, and MNOs to use Iridium’s network, delivering a global, low-latency LEO user experience based on 3GPP standards.
The Partnerships Catalyzing Satellite D2D Expansion
The satellite D2D value chain is growing with the involvement of diverse players who are establishing partnerships with different strategies. These include chipset manufacturers, OEMs, infrastructure equipment vendors, satellite operators, service providers and MNOs.
Since we are still at the nascent stage, successful D2D partnerships are anticipated to be those that will instil harmony across the members of the industry value chain and bring utmost value to target users and verticals.
For example, T-Mobile is working with SpaceX to use their Starlink LEO satellite constellation to provide text messaging services for customers in the United States. Moreover, Verizon is the first mobile carrier to launch a commercial D2D service offering with Skylo, with plans to offer the ability to text anywhere via satellite in select devices by next year.
Filipino telecom operator, Globe, has also announced that it will launch a D2D satellite service in parts of rural Philippines. To do so, it has partnered with Lynk Global. Globe will use Lynk's LEO satellite constellation to ultimately deliver SMS, IP messaging apps and emergency alerts to target regions currently lacking traditional terrestrial network coverage.
Brazil’s complex geography leaves millions without access to terrestrial cell networks. In response, the National Telecommunications Agency (Anatel) has launched a regulatory sandbox to facilitate D2D satellite connectivity trials, motivated by the plans of mobile providers, Claro and TIM. Together, the entities will collaborate with AST Space Mobile on upcoming trials.
In Europe, OQ Technology has emerged as a leader since pioneering a Narrowband IoT Waveform mission in 2019. They've successfully connected cellular IoT devices to LEO satellites.
D2D Market Outlook
Overall, connecting the unconnected, improving safety and emergency response, expanding IoT applications, and increasing the resiliency and reliability of the global telecommunications infrastructure are the top benefits of D2D connectivity.
What is not clear at this point is which business models will dominate, how large the addressable market is, and the degree to which competition, cooperation, and disruption will shape the D2D landscape.
The converging D2D market presents significant opportunities for increased customers and revenue for both satellite and terrestrial wireless communication providers, as well as IoT players. Looking ahead, future 6G networks will enhance this integration, building on 5G standards.
Satellite D2D is one of the most exciting areas of the space industry and more revenue opportunities will be unlocked as D2D capabilities evolve and voice and wideband data services become commercially available.
The GSMA mentioned that wholesale partnerships between telecoms and satellite operators will likely be the most common revenue model for D2D services. Business/enterprise revenues will come primarily from connecting IoT devices in out-of-coverage areas. With an estimated total addressable market of USD 10.4 billion by 2035 just for connectivity, additional revenues will come from other associated value chain elements such as professional services and platform analytics.
Furthermore, the GSMA clarified that while D2D is branded as a '5G-enabled' service due to 3GPP standardization, actual speeds will likely resemble 3G, ranging from 3–5 Mbps, with occasional higher performance. The key benefit is its ability to deliver continuous coverage in rural and remote areas, compensating for the lower speeds compared to LTE.
Operators will need to carefully consider how the D2D service is marketed and the competitive differentiation that can be offered.
Continue Reading:
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