Will 2025 be the year satellite-to-smartphone services truly take off?
- Reference: 1735839916
- News link: https://www.theregister.co.uk/2025/01/02/satellite_phone_services_starlink/
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Satellite services integrated with terrestrial cellular networks are still in their infancy, but the revenue from these is expected to grow rapidly to reach about $16.8 billion by 2028, according to forecasts by research firm [1]CCS Insight , overtaking satellite broadband and leaving IoT connectivity via satellite in the dust.
Those are the three applications of orbital internet service that CCS identifies, with broadband currently the largest at about $7.9 billion in revenue, thanks to providers such as Starlink.
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This is predicted to rise to about $13.3 billion by 2028, but the revenue from so-called direct-to-cellphone satellite connectivity – your smartphone uses an overhead orbiting bird rather than a nearby cell tower – is set to rocket from virtually nothing today to pass broadband in 2027, while IoT will only just top a billion.
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"On the whole, the total revenue generated from these use cases is still relatively small compared to the telecom industry as a whole, but they do represent a long-term opportunity," said Research Analyst Vaishali Purohit.
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Image courtesy CCS Insight
CCS also distinguishes two distinct approaches to providing a direct-to-cell service. One is to target modified devices that feature special hardware, the other focuses on unmodified smartphones, with key distinctions between the two in the spectrum they use, the players and partnerships involved, and the device support required.
Apple is one example of the modified device approach, first seen in the [6]iPhone 14 which launched 2 years ago with the ability to send a message via satellite to a contact center and call for emergency help if no cell network is available. Messaging capabilities were extended in iOS 18.
Google added SOS capability with its [7]Pixel 9 device, and some Chinese brands such as Huawei and Xiaomi also have satellite messaging, but only for users in China.
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Modified devices typically access dedicated spectrum in the L-band or S-band ranges, owned by the satellite operator, Purohit said. This includes Globalstar in Apple's case, plus others such as Skylo and ViaSat.
While modified devices support basic services such as emergency and text messaging now, they are likely to support richer services such as voice and data by 2027, according to CCS.
However, the unmodified device market is likely to be significantly larger than that for modified devices – forecast to reach 8.8 billion units by 2028, compared with about 1.5 billion, respectively.
Iridium flares for another $500m [9]FLASHBACK
Unmodified devices effectively means those compliant with the non-terrestrial network (NTN) capabilities specified in Release 17 and 18 of the [10]3GPP standards , which should include all smartphone handsets going forwards.
This market is based on terrestrial cellphone operators partnering with a satellite provider to deliver a service, typically by sharing some of the operator's spectrum in order to expand coverage out to areas beyond the coverage of the cell towers, or " [11]like putting a cell tower in space ," as it has been described.
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CCS highlights three main satellite provider networks that are serving unmodified devices; Lynk, AST SpaceMobile, and SpaceX's Starlink, all operating low Earth orbit (LEO) constellations.
Lynk, the smallest of the three, is the only one that offers an active service, but its coverage is currently in places such as the Cook Islands and Solomon Islands, though it does have a partnership with Rogers Wireless in Canada.
However, most of the market for the near future is going to be in North America, especially the US where there are large areas outside unserved by cellphone signal coverage. Starlink has a partnership with T-Mobile US, while AST SpaceMobile has signed up the other two major US cellphone carriers, Verizon and AT&T.
Other notable satellite operators include Amazon's [13]Project Kuiper , which "could impact the satellite industry on a similar level to Starlink," according to Research Analyst Joe Gardiner.
There is also Sateliot, which focuses on NarrowBand-IoT for connecting devices, and Telesat, which is adding a LEO constellation to its existing geostationary network.
However, CCS Director for Consumer and Connectivity Kester Mann reiterated that satellite links are only likely to be a complementary technology to terrestrial networks, rather than any kind of replacement for them.
[14]Elon Musk tops US political donor list with $270M+ for Team Trump
[15]Arianespace's Vega C delayed after gantry throws a tantrum
[16]Musk and Trump to fall out in 2025, predicts analyst
[17]SpaceX hits 400 launches of Falcon 9 rocket
"It's about connecting the unconnected, principally the 350 million people throughout the world, many in emerging markets, who still cannot get online due to unavailability of telecom infrastructure," Mann said.
The US is going to be the epicenter of direct-to-cell satellite activity for the near future, dominating early usage and uptake thanks to all three of the country's major cellular carriers getting involved.
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CCS figure 2 - chart showing sms subscribers - Click to enlarge
First mover on this is likely to be the T-Mo and Starlink partnership, according to CCS.
"We're expecting a commercial direct-to device offer for personal messaging almost anytime," Mann said, a forecast made more likely by the recent news that the US Federal Communications Commission (FCC) has given Starlink [19]conditional authorization to operate its service.
Data services also on the near-term roadmap after the pair managed to demo [20]a phone-to-phone video call using a Starlink satellite and unmodified smartphone back in May, he added.
However, Starlink has only agreed a one-year period of exclusivity with T-Mo before it opens up its network and offers the service to rival carriers as well.
In regions like Europe, the case for direct-to-cell is less clear cut because existing telecoms infrastructure already serves much of the population with either fiber or cellular services, plus the relative lack of large sparsely populated regions. The UK government has already [21]partnered with Starlink to cover some remote areas.
There is also a much more fragmented telecoms structure that may make it difficult for satellite operators to share the spectrum of a terrestrial network partner without the risk of interfering with neighbouring services that may be operating in a bordering nation.
But Australia is "a recent hotbed of satellite activity," according to Mann, because like the US, it also has huge areas still lacking in any kind of mobile coverage. He pointed to Telstra partnering with Starlink for broadband delivery, while Optus is also working with the Musk-owned biz on direct-to-cell services.
Overall, it seems like satellite-based phone services could [22]soon become the norm , as we have written before – depending on where in the world you are, of course. ®
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[1] https://www.ccsinsight.com/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Z3cakwrroCZoV3csRxcnQwAAAIE&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z3cakwrroCZoV3csRxcnQwAAAIE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z3cakwrroCZoV3csRxcnQwAAAIE&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://regmedia.co.uk/2024/12/09/ccs_sat_fig_1.jpg
[6] https://www.theregister.com/2022/09/07/apple_iphone_watch_launch/
[7] https://www.theregister.com/2024/08/13/google_gemini_ai_pixel/
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z3cakwrroCZoV3csRxcnQwAAAIE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2008/09/29/iridium_merger/
[10] https://www.3gpp.org/
[11] https://www.theregister.com/2023/10/12/starlink_promotes_direct_to_cell_service_2024/
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z3cakwrroCZoV3csRxcnQwAAAIE&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[13] https://www.theregister.com/2024/06/28/amazon_project_kuiper_q4/
[14] https://www.theregister.com/2024/12/07/elon_election_spending/
[15] https://www.theregister.com/2024/12/05/arianespace_vega_c_delay/
[16] https://www.theregister.com/2024/12/04/musk_trump_china_agenda/
[17] https://www.theregister.com/2024/11/29/400_falcon_9_launches/
[18] https://regmedia.co.uk/2024/12/09/ccs_sat_fig_2.jpg
[19] https://www.theregister.com/2024/11/27/starlink_fcc_direct_to_cell/
[20] https://spaceexplored.com/2024/05/21/spacex-starlink-t-mobile-satellite-service/
[21] https://www.theregister.com/2022/12/01/uk_starlink_testing/
[22] https://www.theregister.com/2024/06/19/satellite_phone_service_could_soon/
[23] https://whitepapers.theregister.com/
Starlink is nowhere near first and that's a common refrain for Elon ventures (not first, but the media makes those claims). Satellite phones have been expensive since satellites are expensive. SpaceX needs to do something to bulk up the return on their investment to put a 42,000 mega-constellation into orbit and replace it every 5 years.
Cost is one issue, but so it reliability. If you sign up so you can have phone service in un-served areas and it only works sometimes, is that worth it? I expect that initially the cost, while more, will have been calculated to a make a profit with a much higher user base (a loss leader). If that user base doesn't come on board, prices will jump to make up the difference.
There are people that can make use of such a system that are far out of town. The issue is that the vast majority of people live in cities with internet and phone services already so the potential customer base is a small subset of the total market. In places where an annual family income is in the hundreds of dollars/Pounds/Euros, it's not an option or only viable if a whole village can kick down and host the equipment in community center. It's not that hard to look up annual income stats for countries around the world. For most, clean water is more of a priority than phone/internet.
Well theoretically all the people paying $100 a month for Starlink broadband will do that, but will it remain economic as the unserved areas shrink due to fiber growth (lots of rural areas are getting fiber from their rural electric cooperatives now) and 5G expansion? I don't know and I doubt they do either.
So having a second revenue source would be good. How much would people pay? I have it for "free" on my iPhone, if it became a paid service I wouldn't get it because other than calling 911 in an emergency I see no reason to want to send/receive texts when I'm out of a service area. Maybe if I was in such an area more frequently I would.
Maybe what happen is it becomes a "free" feature on premium postpaid cellular plans, another perk alongside the free phone upgrade every other year or whatever it is they offer nowadays. That would mean everyone is paying for it whether they use it or not. I abandoned those expensive plans long ago and pay $395 a year for unlimited everything (at full priority equal to Verizon's postpaid customers) with Verizon prepaid version Visible and buy my own phones.
Battery
The main question, for me, is battery life. A standard mobile phone adjusts its transmission power based on the distance to the base station. Starlink DtC satellites orbit about 350km up, so that's the minimum distance when they are directly overhead, mostly it will be rather further. Which is going to wind the transmission power up to maximum, I would guess.
Well, we'll see. I'll happily test anything that might give me some form of utility.
GJC
Re: Battery
I think this will be a nonissue for long enough that it eventually becomes a big problem. Right now, when the only thing you can do is send a message, people won't use it very often. They will use it to either send information to emergency services, where they are really not concerned about battery life, or something important enough to fiddle with things to get it out, where they are similarly not too worried. That means nobody will complain about the battery life problem for a while until the day, assuming it comes sometime, when they are able to use data connections from these satellites. When people start to browse a website, get online navigation instructions, or watch a video over these services, I expect battery life is going to start being one of their largest concerns, but it will be a while before anyone lets someone do that. There's a chance that technical limitations will prevent that working well at all, and there's a chance that they choose to charge so much for bandwidth that few ever try it, so we might not even get there.
Re: Battery
I'm reminded of Iridium. That ended well... though it didn't have anything like the satellite constellations now available.
Re: Battery
They will never have data connections fast enough to run a browser on the modern web without tearing your hair out. It'll barely exceed ISDN speeds. Its simple physics. The antenna inside a smartphone is too small, just because Starlink can give you 100 Mbps with a pizza plate sized antenna means nothing.
Re: Battery
I've been saying similar for years, however I've seen claims that the Starlink Direct-to-cell stuff can manage around 10Mbps. I have no idea if that is true or not, and I share your reservations, but time will tell.
GJC
“Elon?”
“It’s Donald”
“No, Kessler”
Multiple financial risks.
Astronomers must be absolutely chuffed with all this metalwork up there, most likely for good. Maybe they will block enough of the sun's rays to dent global warming.
I'm not sure it will take off for general use, unless paid for by government to cover remote areas when they turn off landlines. Telcos and ISPs don't have the fattest margins as it is. Many people don't upgrade to next G until they have to. The global economy at the level of ordinary folk is a disaster of inflation and interest rates. Is anyone really going to pay more for this? Advertising is not going to pay for it.
And will governments allow it? They can turn off the net, block and censor within their borders, but they cannot do much about a satellite network run from another country.
The question is how much people are going to will be pay. Nobody has released any figures on how much extra DtC is going to cost. Apple doesn't charge anything and will T-Mobile with their beta program.