Spotting the losers in satellite D2D

After years of hype and buildup, the battle lines are finally becoming clear in the “direct-to-device” satellite market (D2D, for those in the know).

Now, it’s time to start looking for the companies that will be cut from the herd because it’s likely that few will be left standing.

I’m not the only one who feels this way. “I think there’ll be a number of players that will play there,” said Dish Chairman Charlie Ergen during his company’s recent quarterly conference call. “There’ll be a number of players that will fail. And there’s certainly room for one really, really good system.”

But which companies will emerge from the scrum? Will it be longtime satellite operators like Globalstar and Iridium that already have a toe in the market with their existing satellites? Will it be satellite veterans like EchoStar and Viasat that might use their spectrum holdings to build new satellite networks for phone-to-satellite connections? Will it be a crop of upstarts – SpaceX’s Starlink, AST SpaceMobile and Lynk Global among them – that hope to connect satellites to phones via terrestrial network operators’ spectrum holdings? Or will it be out-of-left-field candidates like Omnispace and Ligado Networks – which recently announced a teaming (but not a merger) – that hope to reboot their satellite spectrum holdings into the D2D opportunity?

The truth is that no one company has a dominant position. Each might fall by the wayside, either through bankruptcy or acquisition.

And that’s partly because it’s still unclear how much money the phone-to-satellite market will generate.

A technology in search of revenues

“Desperately niche” is how my colleague Iain Morris described Apple’s iPhone 14 satellite-messaging service. After all, satellite vendor Globalstar said it expects revenues of just $230 million this year from its phone-to-satellite agreement with the world’s richest company.

That’s roughly in line with what analysts expect from Iridium’s agreement with Qualcomm for satellite connections for Android phones.

But that’s just the start. After all, some analysts have called D2D the “largest opportunity in Satcom’s history.”

Some aren’t so sure. After all, according to data from OpenSignal, mobile users in the US spend roughly 1% of their time disconnected from cellular signals. How much extra will they pay to stay connected for that last little bit of the day?

Early providers in the space don’t think they’ll want to pay anything extra, at least initially. Apple offers two years of emergency messaging for free, while Bullitt offers one year. T-Mobile officials have said they plan to add SpaceX’s D2D feature into the operator’s more expensive service plans.

So, there’s some D2D money out there now, but it’s probably not much.

Bullitt appears to be the first company willing to test out demand for the service beyond free, emergency situations. For example, the company is charging around $5 per month for 30 phone-to-satellite messages on its newest satellite-capable phones. It also this week released a $100 Bluetooth accessory that can connect to any phone to give it satellite messaging capabilities. A year of service, supporting 30 messages per month, will cost $150.

There are around 7 billion mobile users worldwide, but presumably, a very small percentage would pay extra for satellite messaging services regularly. Analysys Mason predicts around 8 million monthly D2D users by 2031.

To read the complete article, visit Light Reading.