The Potential Value of the Direct-to-Cellphone Market in Satellite Communications

The direct-to-cellphone business is considered one of the biggest opportunities in the satellite communications market. According to Euroconsult managing director Nathan de Ruiter, the addressable market for this segment is worth ” $100 billion or even more.” This is particularly significant considering the large number of people who lack reliable terrestrial network connectivity.

However, there are several challenges that need to be addressed before the direct-to-cellphone market can fully develop. These challenges include device compatibility, spectrum availability, and service affordability. Many people who are outside of terrestrial networks also have limited disposable income, which further adds to the complexity of this market.

Despite these uncertainties, de Ruiter believes that the direct-to-cellphone business is a key market opportunity for the satellite communications sector. It has the potential to provide exponential growth in global capacity, with a sevenfold increase in fixed satellite service capacity from 28 terabits per second in 2023 to 195 terabits per second in 2028. Nongeostationary orbit constellations like Starlink and Oneweb are expected to contribute significantly to this additional capacity.

This expansion in capacity will likely lead to downward pressure on pricing, which is advantageous for consumers. Additionally, the satellite services market as a whole is expected to see growth over the next decade. Euroconsult predicts that the value of the global satellite services market will increase from $107 billion in 2022 to $123 billion by 2032.

Specifically, data-services revenues are projected to nearly triple from $19 billion in 2022 to $53 billion in 2032. However, there is expected to be a decrease in video demand, with revenues declining by approximately 20% from $88 billion to $70 billion.

Despite the optimistic outlook, Euroconsult also highlights potential challenges in the form of intense competition, a rapidly changing ecosystem, and rising insurance costs. Recent anomalies in geostationary orbit have impacted the insurance market, raising concerns about the future stability of satellite operations.

Overall, the satellite communications market is poised for significant growth, with the direct-to-cellphone segment being a key area of focus. Although there are obstacles to overcome, the potential value of this market makes it an attractive opportunity for the industry.