It expects that commercial services will be launched next year but thinks operators will struggle to make a return on their investment in the associated infra
A new study by Juniper Research predicts the first year of commercial direct-to-cell services will be 2025, generating $30 million in revenue globally.
Direct-to-device (or -cell) services support cellular connections to network services directly from satellites in orbit, enabled by satellite-capable radios in devices and partnerships with satellite network operators.
Monetisation matters
However, Juniper forecasts this will grow rapidly and generate almost $1.7 billion by 2029. Despite this 8,000% growth, the study predicts that operators will face challenges in securing a return on their substantial investment in building direct-to-cell networks. (See also this analysis which explores the problems operators’ face from multiple satellite service providers and the lack of a standardised approach.)
The study identified two key challenges in maximising return on investment. The first is the low cost of low-power IoT connections. Juniper says demand for the services is coming from the need for connectivity and remote monitoring for nomadic industries, such as maritime.
Hence the report predicts that low-power connections will represent the most prominent use case for direct-to-cell. However, these connections will generate an average of less than $2.00 per month.
Commoditisation
The second challenge is the commoditisation of mobile connectivity. The study also predicts that operators will struggle to convince mobile subscribers to adopt an additional subscription for direct-to-cell services on top of their ordinary packages.
To overcome this, Juniper urges operators to focus on tailoring direct-to-cell services to nomadic travellers and remote subscribers.
The study’s author, Sam Barker said, “Operators must promote the substantial coverage their direct-to-cell networks serve and apply premium pricing for data-intensive connections for broadband and consumer use cases. This will attract users of profitable direct-to-cell services, such as mobile broadband and smartphone subscriptions.”
An extract from the new report, Global Direct-to-Cell Market 2024-2029, is available as a free download.