Is Direct Satellite-to-Device the Largest Opportunity in Satcom’s History?

By | November 17, 2021

The direct satellite-to-device (DS2D) market is expected to reach $35 billion by 2030, and counting 400 million average monthly subscriptions driven by 5G technology (according to NSR). This is about $7/month. This highlights a very sensitive business case: constellations cost billions to deploy and operate; they need a refresh every 5-10 years. With much of the world’s unconnected in developing markets where ARPU is $2 or less, controlling constellation costs becomes critical to the success of direct satellite-to-device ventures.

Direct satellite-to-device connectivity was be the topic of our 3rd workshop in the Space Intersects Internet series on November 18, 2021. You can watch the recorded event at this link: https://bit.ly/3q6eyRP. To download a summary transcript, enter your email below:

The key highlight of DS2D connectivity is that it leverages the terrestrial device market place and leverages economies of scale by latching on technologies such as 4G, 5G, and LoRa. In comparison, constellations focusing on fixed wireless access or enterprise data connectivity have to develop their own user terminals. The user terminal is a large expense in the overall business case and a high risk item. We saw how SpaceX is looking to reduce the cost of its user terminals from ~$1,500 to ~$500. DS2D don’t have to deal with this issue.

Key business case drivers for a large fixed wireless access constellation.

There are different types of market segments that fall into direct satellite-to-device connectivity. Personal and IoT connectivity for sensors are a couple of examples. This is one way to segment the market. Another way is to segment by the type of spectrum: licensed mobile, unlicensed mobile and satellite spectrum. This allows one to grasp some of the challenges (e.g. spectrum rights and coordination), and the opportunities (economies of scale from leveraging a certain ecosystem).

Direct satellite-to-device market segmentation and use cases.

In terms of developing trends, the key items I see include: 1. Standardization and integration into terrestrial networks (3GPP for 5G technology); 2. Integration with cloud players, enabling edge computing and direct access to cloud services; and 3. Quantum key distribution which addresses the potential weakness of RSA security used in virtually all communication networks.

Satellite constellations are forming quickly. SpaceX has managed to launch the most number of satellites to date, leveraging their launch capabilities. But SpaceX is focused on fixed wireless access. As I mentioned in past posts, not all satellite constellations are the same. The direct satellite-to-device connectivity requires different design objectives driven by the unique use cases.

I will be publishing more on this topic. Stay tuned!