Satellite 2.0: going direct to device

Our focus in this report is on the direct-to-device (D2D) strand of satellite that seeks to help telcos chip away at the coverage challenge – a lingering barrier for over 5% of the global population, as well as businesses in industries ranging from agriculture to manufacturing. The main differentiator from GEO and LEO constellations (such as Starlink, OneWeb and Amazon’s Kuiper) that need a dish or other large receiving equipment is that connectivity is provided direct to someone’s mobile phone, or any standard mobile device. This allows users to be ‘mobile’ while using the service.

D2D is not new. However, the growing momentum of telco-satellite partnerships has resulted in leaps in innovation in the realm of non-terrestrial-network (NTN) technology and deployment economics. Telcos can improve cost and operational efficiencies by eliminating costs associated with cell site deployment, network integration and receiving dishes. This adds up to a faster time to market for expanding the footprint for service.

Our modelling suggests a total incremental connectivity revenue opportunity for telecoms operators of over $30 billion by 2035, spread across consumer, B2B/IoT and government client segments. Wholesale partnerships between satellite operators and telecoms groups are the most likely revenue model. Commercial availability is likely to come online around 2025, with the intervening three-year window likely to see a round of partnerships to help bridge the mobile and digital divide.