Will "Direct to Device" fuel the Commercial Space Boom?
Space Companies and Governments are starting to launch Constellation Communications Satellites at unprecedented speed
SpaceX recently entered into a $17B deal with EchoStar to purchase spectrum, decreasing the reliance on mobile providers to provide telecom to SpaceX customers1. This is a prudent business move for SpaceX and opens up the opportunity to provide 5G like speeds and services via satellite connected to terrestrial networks. From SpaceX’s humble beginnings as a reusable rocket company, we are starting to see a pattern that is matched by several other startup space companies that are building launch platforms. Not only are they going to provide launch, but also other opportunities for generating revenue from space systems, like 3D printing, manufacturing in outer space, cloud compute/storage, and space mining. These revenue opportunities are significantly more risky and complex and will have a smaller user base then communications arrays. That is why “Direct to Device” (D2D) provides the best opportunity for space companies and governments to generate revenue to explore more risky, but potentially more financially rewarding opportunities elsewhere in space.
Beside SpaceX, we are also seeing the Amazon Founder, Jeff Bezos, backed Blue Origin focus on developing a launch platform in New Glenn for Amazon’s Project Kuiper2, which also promises to be a fast and reliable broadband/communications constellation and have already partnered with Jet Blue to provide free in-flight WiFi. China is also deploying their very own Guowang/Qianfan mega‑constellation3 and will most likely start exerting more soft-power over the global south by providing free and reduced (and censored and closely monitored) internet, that will no doubt push and favor Chinese propaganda4. Not to be left out, Europe has also joined the field with their IRIS5 (Interconnectivity and Security by Satellite) which they claim “isn’t a mega-constellation”, but will serve the same purpose as Starlink/Kuiper/Guowang with the network being shared by commercial, civil, and military applications.
What is interesting is that Apple will be funding6 48 more Globalstar satellites that underpins their SOS network. If we start to see more phone hardware providers cut more deals to fund their own infrastructure with mega-constellation providers, we could see a crash in the traditional telecom companies that continue to increase billing without increasing their underlying infrastructure or service. Rural customers are already starting to sing the praise of SpaceX’s Starlink as a way to get affordable, high-speed internet in areas that traditionally were reliant on slow and overpriced cell provider networks.
Consider also that these satellite communications providers have also clashed with the more totalitarian regimes (such as Iran, China, Russia) given that they are able to provide censored material directly to the phone user without passing through the traditional nationwide firewalls that would block them. While these regimes have non-kinetic ASAT (Anti Satellite) options, even the most stringent of regimes is not looking to risk destroying or altering the space infrastructure of other nations, especially that of the United States, but that has changed drastically in recent years as China has gained more international legitimacy. We may see a very near future in which the most damaging weapon the US can provide against a regime is secure, non-firewalled devices with unlimited internet access to an enemies disaffected population.
If space based hybrid communications networks end up only capturing 1% of the worldwide revenue from telecom companies, it would still be $15.3 billion dollars. In reality, we are looking at a much higher number as space companies build and refine more of their products and infrastructure. It is getting cheaper, easier, and more reliable to launch space systems and we should expect rapid innovation to come along with that, especially when Space companies start capturing some of the annual $1.53 trillion in telecommunications revenue7.
https://spacenews.com/whats-next-for-direct-to-device-after-spacexs-blockbuster-spectrum-deal/
https://www.aboutamazon.com/what-we-do/devices-services/project-kuiper
https://spacenews.com/china-promotes-direct-to-device-satellite-services-with-new-guidelines-and-licensing/
https://www.foreignaffairs.com/china/real-china-model-wang-kroeber
https://spacenews.com/scaling-up-iris%C2%B2-to-meet-evolving-demands/
https://spacenews.com/whats-next-for-direct-to-device-after-spacexs-blockbuster-spectrum-deal/
https://www.deloitte.com/us/en/insights/industry/technology/technology-media-telecom-outlooks/telecommunications-industry-outlook-2025.html