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The direct-to-device (D2D) connectivity market has been completely transformed in the space of six weeks.
On Aug. 1, U.S.-based EchoStar ordered 100 satellites from Canada’s MDA Space for a planned $5 billion low Earth orbit (LEO) constellation.
But that constellation was scrapped just over a month later on Sept. 8 after EchoStar sold spectrum underpinning the proposed satellites to SpaceX for $17 billion.
Just a week after that, geostationary operators Viasat of the U.S. and United Arab Emirates-based Space42 announced plans Sept. 16 to pool their Mobile Satellite Services (MSS) spectrum to take on SpaceX’s growing dominance.
Meanwhile, Europe kicked off a study to find ways to improve D2D with MSS spectrum, and China issued new guidelines to accelerate their own plans for a market analysts say could one day be worth more than $100 billion.
EchoStar has also recently sold $23 billion worth of terrestrial spectrum to AT&T, ending its run to operate as a traditional mobile carrier in the United States.
Both spectrum sales came amid Federal Communications Commission investigations into whether EchoStar was underutilizing its spectrum holdings, following complaints by SpaceX and others.
The FCC has since dropped those investigations, which had at one point even led EchoStar to float the possibility of seeking bankruptcy protection.
D2D and SpaceX’s blockbuster agreement dominated World Satellite Business Week in Paris this year as rivals and governments scramble to define what comes next in one of the fastest-moving corners of the space sector.
As one banker noted, the SpaceX spectrum deal is worth “more than the market cap of half of the satellite companies combined,” giving the clearest indication yet of just how much the company values an emerging market it has set out to dominate.
A market once distant, now imminent
“D2D was considered quite a long-term prospect, and now it’s a shorter and shorter horizon,” said Pacôme Révillon, CEO of boutique research firm Novaspace.
Novaspace estimates there will be roughly 300 million monthly D2D users by 2030, when service revenues are forecasted to climb from around $400 million today to $5.7 billion.
SpaceX is moving quickly to capture those users as rivals ramp up their own plans. After launching more than 650 Starlink satellites with D2D payloads, the company recently sought FCC permission to deploy up to 15,000 more to leverage the spectrum from its EchoStar deal, which is also pending regulatory approval.
Blurring D2D dividing lines
Until recently, the D2D landscape was distinctly divided into two camps:
he first sought out terrestrial wireless partnerships. Think of companies such as SpaceX, AST SpaceMobile and Lynk Global focused on teaming up with mobile network operators (MNOs) to use their terrestrial spectrum from space.
The second focused on satellite spectrum strategies. Viasat, Globalstar and other legacy MSS providers could previously only use their space-licensed frequencies to connect specialized devices, but are now adapting mobile industry standards to reach the mass market.
AST, which has partnered with AT&T and Verizon in the U.S., was the first to blur that distinction.
The Texas-based venture hatched a deal with Ligado Networks in June to pay the bankrupt geostationary operator more than $500 million for access to L-band spectrum across North America, following up soon after with a smaller deal for global S-band frequencies, pending approval on a country-by-country basis.
According to AST, combining cellular and space spectrum is key to meeting its goal of enabling broadband speeds of up to 120 megabits per second for unmodified smartphones beyond the reach of terrestrial networks.
The venture has five Block 1 BlueBird satellites in LEO but plans to provide continuous coverage in the U.S. and other key markets through 13 more launches over the next year and a half of larger, more capable spacecraft.
Each Block 1 BlueBird spans about 64 square meters, carrying the largest commercial antenna ever deployed in LEO, but the planned Block 2 satellites are expected to be more than three times larger.
Meanwhile, Falls Church, Virginia-based Lynk has five pizza-box-sized satellites in LEO that are currently enabling intermittent basic messaging and alert services in partnership with telcos in a handful of island nations.
Lynk’s recent partnership and sale of equity to Luxembourg’s SES gives it access to the multi-orbit operator’s satellite spectrum resources, though they have yet to provide much information on how their alliance will work.
SpaceX’s D2D boost
SpaceX is currently using cellular spectrum to provide connectivity for text messaging, emergency alerts and certain apps across the U.S., New Zealand and Japan.
The company clearly has the resources to push harder into this hybrid spectrum strategy.
Analysts expect an additional 50 megahertz of bandwidth from EchoStar would enable a user experience closer to the 5G services that terrestrial cellular networks currently offer. It also reduces SpaceX’s reliance on cellular spectrum from companies such as T-Mobile, its partner in the U.S.
In its FCC request for 15,000 D2D satellites, SpaceX indicated it could also leverage ground-based equipment to boost coverage with the EchoStar frequencies.
SpaceX said in a regulatory filing that it is considering “creating a hybrid satellite/terrestrial network to expand the coverage and capacity of these services.”
The company aims to begin testing D2D services using the newly acquired spectrum as soon as the end of next year, pending a new generation of satellites with payloads compatible with that spectrum. The company also needs partnerships with other firms so that devices can use it.
“This is the start, by the way, of a huge amount of work,” SpaceX president Gwynne Shotwell said at the World Space Business Week conference Sept. 16. “We’re working with chip manufacturers to get the proper chips in phones.”
SpaceX was already working with MNOs under earlier plans to use terrestrial mobile spectrum for D2D services, but now that it owns spectrum, “we want to work with them almost providing capacity, kind of wholesaling capacity to their customers,” Shotwell said.
She argued that the effort will be more efficient than negotiating with individual operators for spectrum rights.
“When we cross a border into another country, we now need to leverage a different licensed spectrum, so it’s very clunky,” she said. By contrast, the EchoStar spectrum is cleared globally.
Future versions of Starlink satellites are expected to launch on SpaceX’s Starship, given their larger size, which remains in development.
The reaction
D2D executives speaking on a Sept. 16 panel at World Space Business Week reflected excitement and caution about the market’s next phase.
AST president Scott Wisniewski and Barbee Ponder, general counsel and vice president regulatory affairs at Globalstar, both said SpaceX’s moves validate their own strategy.
“It shows the true ability of Mobile Satellite Services spectrum and what it can do globally, quickly to provide enormous public benefits,” Ponder said. “So we welcome that transaction. It will not change anything that we do in the future.”
SpaceX is set to launch satellites in the coming months to replenish Globalstar’s aging network, which underpins Apple’s iPhone emergency messaging service. Apple is also bankrolling a $1.5 billion expansion constellation of an additional 48 satellites to enhance that capability.
For Iridium, which is pursuing a standards-based D2D service on its existing LEO network, the race looks very different.
“I’m glad I’m not trying to raise money against this right now or trying to compete,” Iridium chief operating officer Suzi McBride said.
“I’m not sure what some of these big players will do given the announcement,” she added, pointing to SpaceX’s reputation for moving “fast and furious” in a capital-intensive race.
Andre Tremblay, executive chairman of Canada’s TerreStar Solutions, which uses S-band to extend mobile coverage in partnership with Canadian carriers, captured the ambivalence.
“We all have a love and hate relationship with Starlink,” Tremblay said. “We love to be close friends, but we hate having to compete with them. They are a formidable organization.”
However, he said they cannot be the only such operator, because these networks carry major strategic implications for governments as well as consumers and businesses.
“It’s playing in the heart of delivering public policy,” he added. “It’s playing in the heart of sovereignty. It’s a massive endeavor for the world, and it cannot be owned by a single entity.”
New alliances and sovereignty push
Viasat and Space42 are betting on this sovereignty differentiator.
The companies announced a joint venture called Equatys during the conference to form the largest coordinated block of D2D frequencies within three years.
Equatys touts more than 100 MHz of L- and S-band spectrum already allocated across more than 160 countries and geostationary satellites already in orbit, in addition to LEO spacecraft the companies said would be launched in the coming years.
The companies said during a Sept. 16 press conference that Equatys will adopt an investment model similar to the one used by cell tower companies, pooling spectrum and satellite assets under a neutral entity to lower unit costs. Viasat, Space42 and potentially others such as TerreStar would act as tenants.
Equatys is positioning itself as a sovereignty-friendly D2D alternative, committing to work within existing national spectrum allocations and closely with countries to give them access to a coordinated global system.
Meanwhile, SpaceX’s Starlink broadband constellation has sometimes clashed with Iran and other countries by enabling services outside formal approvals.
“It’s a scary thing for countries to think that anybody in their country with a cell phone can completely bypass national infrastructure in terms of all the compliance requirements,” Viasat CEO Mark Dankberg told reporters.
“So one of the ways to do that would be to extend the notion of shared infrastructure to a national carrier that is trusted by that country to operate it.”
Equatys is also being designed to accommodate spectrum beyond L- and S-band, including terrestrial frequencies where regulators allow.
Who is paying?
Analysts continue to question how widely D2D will be adopted and how much consumers will pay for incremental coverage outside terrestrial networks.
T-Mobile only started charging subscribers in July for a Starlink-enabled D2D service offering texting and multimedia messaging for $10 per month in the U.S. The economics are also much trickier to figure out in markets with less spending power.
Traditional MSS operators typically spend close to $150 on space and terrestrial infrastructure for every customer they serve, Space42 managing director Karim Sabbagh said during the World Space Business Week D2D panel.
“And for different operators the number may be different, but it’s quite expensive,” Sabbagh said. “In our economic model for Equatys, that number is $3.”
He argued that while there will be a premium market for the service, mass-market D2D would benefit from a different cost structure and service model.
Sabbagh also highlighted a survey commissioned by the GSMA last year that found 60% of customers would pay for D2D. While he declined to give a figure, he said this should not become just another premium add-on service.
“If we truly want to serve the mission of direct to device and take mobility everywhere, it has to be frictionless,” he added, both on the network handover and economically.
“This should not be a jump in the bill that the customer is going to receive, whether it’s $10 [or] $30, because if you do that, we’re going to create just another premium service the way the legacy Mobile Satellite Services industry was positioned for the past 30 years.”
The next chapter
SpaceX’s big splash has galvanized a D2D race that has moved beyond technical feasibility into spectrum advantages, sovereignty and sustainable business models.
It is spurring “everybody involved in the field to get their act together,” TerreStar’s Tremblay said.
“We have a couple of years [to] organize ourselves,” he added, to get “up to the task of delivering the service that will be highly competitive.”
Analysts also see this as the opening phase of a race defined as much by political buy-in and spectrum control as technology.
Mike Crawford, an analyst with B. Riley Securities, noted the D2D opportunity “has matured sufficiently for SpaceX to pay fair market valuations (albeit perhaps slightly discounted from a pressured seller) for dedicated spectrum rather than rely solely on MNO partnerships, signaling confidence in the technology’s commercial viability.”
According to Crawford, the “global D2D market will not be a winner-take-all market,” with AST and Globalstar also having much to gain.
However, he singled out AST “as the clear leader in the race to enable true D2D broadband connectivity to unmodified phones, given what we see as greater capabilities and greater bandwidth enabled by [AST’s] large, novel satellite architecture.”
Regardless of who leads, for a space industry worth around $600 billion, D2D represents a promising bridge to a terrestrial communications market that currently generates trillions of dollars a year.
This article first appeared in the October 2025 issue of SpaceNews Magazine with the title “The D2D race.”
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