The theme of Satellite 2024: Direct to Device
Among the dozens of meetings the Quilty team conducted at Satellite 2024 in Washington DC last week, one topic emerged more than any other: direct-to-device communications. The industry still views DTD as a huge opportunity, but some stubborn questions persist, namely 1) which model will win, cellular spectrum reuse or dedicated satcom spectrum; 2) how quickly the market will take root, and 3) how big is the market opportunity? Case and point, two examples from Satellite 2024 – AT&T’s DTD pricing strategy and Qualcomm’s view of smartphone sales.
AT&T doesn’t know how to price DTD. The mobile network operator has long known Abel Avellan, founder of AST SpaceMobile, and has worked with him to bring the SpaceMobile constellation to reality. But per Chris Sambar, president of network at AT&T, the MNO is only at the beginning of figuring out what customers will pay for it. At Satellite 2024, he said: “on monetization models, we’ve thrown some around over the years, but we’ve really just started that work in earnest in AT&T with our product teams, understanding what customers want specifically and what they’re willing to pay for.”
Qualcomm links rising iPhone sales to DTD. Qualcomm ended a 2023 partnership with Iridium due to a lack of interest from Android smartphone manufacturers in incorporating their specialized satcom DTD chipset, but Qualcomm has concluded that DTD does create competitive advantage, pointing to Apple’s market share gains since the release of Apple’s iPhone 14 using Globalstar for limited text messaging capability. That may be a stretch (correlation ≠ causation) given the fact that Apple is offering the service for free until September 2025. We're skeptical that a strong direct link exists, but Qualcomm has a separate partnership with Apple for 5G chipsets, so it has a vested interest in seeing the iPhone succeed as well.
Our takeaway: DTD is an area that will require patient investors. While Quilty strongly believes DTD will eventually be a mainstay of telecom, as everything is moving towards ubiquitous networks, the path to that end has considerable opacity. We expect more trial and error as operators (not unlike they did with inflight Wi-Fi) test out various customer models before landing on one or more sustainable approaches.
SOURCE: https://interactive.satellitetoday.com/via/satellite-2024-show-daily-day-4/executives-unpack-the-practical-challenges-of-the-satellite-and-cellular-convergence/