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Direct-to-phone satellite connectivity emerging as major new market this decade
As the satellite communication industry continues to evolve, the direct-to-device market, particularly direct-to-phone services, stands out as a significant area of growth and innovation. The potential for these services to connect millions of users worldwide represents a major shift in the capabilities and reach of satellite technology.
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Direct-to-phone satellite connectivity emerging as major new market this decade
by Sophie Jenkins
London, UK (SPX) Dec 01, 2023

Paris, France (SPX) Dec 01, 2023 The Mobile Satellite Services (MSS) industry is currently witnessing a pivotal transformation, as highlighted in the latest edition of Euroconsult's 'Prospects for Direct to Handheld and IoT Markets'. This transformative shift is primarily attributed to the emergence of direct-to-device satellite solutions, particularly direct-to-phone services. These advancements are a result of integrating terrestrial and non-terrestrial network (NTN) connectivity, coupled with significant technological developments.

Euroconsult's report projects a promising future for the satellite direct-to-device market. By 2032, it is estimated that direct-to-phone services could connect approximately 130 million average monthly users. This projection underscores the rapidly evolving landscape of satellite communications, especially in segments like traditional handheld phones, direct-to-phone connectivity, and the Internet of Things (IoT).

Delving into the market dynamics, the report provides a detailed analysis of the major applications, equipment solutions, and the growth drivers and challenges inherent to each segment. One of the key insights from the report is the growing importance of satellite cellular IoT. This niche market, enabling hybrid solutions via in-market unmodified IoT devices, is identified as having high market potential due to the ease of implementation. The role of Non-geostationary orbit (NGSO) satellite constellations is particularly emphasized as crucial in creating opportunities to seamlessly integrate satellite connectivity into existing devices.

The advancement in 3rd Generation Partnership Project (3GPP) standards, specifically Release 17, is also fueling this surge in direct-to-device satellite connectivity. This development facilitates the integration of terrestrial and non-terrestrial networks (NTN), a crucial step in expanding the reach and effectiveness of satellite communications.

The report also points to significant market trends, such as a forecasted decline in traditional handheld phone users, who are expected to decrease by nearly half by 2032. Conversely, the direct-to-phone market is anticipated to witness a significant increase in user count, reaching around 130 million. Furthermore, IoT devices are projected to triple in number over the next decade, largely driven by the increased accessibility of satellite IoT solutions provided by new market entrants.

The direct-to-phone segment, targeting the potentially 'unconnected' population, eyes a total satellite connectivity market of over 2 billion subscribers in 2022. This includes individuals without terrestrial network coverage (1.9 billion) and mobile users experiencing connectivity issues in areas with poor terrestrial network coverage or while traveling to regions without coverage (130 million).

The IoT segment is poised to expand its role as a substantial revenue generator within the market, with satellite cellular IoT expected to commence revenue generation by 2025. Key applications likely to drive this growth include connected cars in transport/logistics, smart cities in natural resources, and personal tracking devices such as smartwatches. The market for cellular IoT devices is forecasted to reach a staggering 10.6 billion by 2032.

Sumaiya Najarali, Euroconsult senior consultant, highlights the critical factors influencing the adoption of direct-to-device satellite services. "Continuous technological improvements have bolstered satellite capacity and enhanced device capabilities, hastening the adoption of direct-to-device satellite services. Despite the strong prospects for the direct-to-handheld and IoT markets, success will be largely influenced by external factors, particularly securing spectrum rights and overcoming regulatory barriers, and internal forces, including funding initiatives to support planned satellite infrastructure and commitments from MNOs. Additionally, affordability of services and customer willingness to pay will be pivotal in this cost-sensitive market."

Euroconsult's 'Prospects for Direct to Handheld and IoT Markets' report is now available, offering an extensive market model and forecast methodology. This premium version of the report includes detailed insights on the satellite cellular IoT market's addressability, primary use cases, and emerging applications. A free extract of the report is available for a preview of the full contents.

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