A new study by Juniper Research anticipates that the first year of commercial direct-to-cell services will be 2025; generating a modest $30 million in revenue globally. However, we forecast that operators will generate almost $1.7 billion by 2029. Despite this impressive 8,000% growth, the study predicts that operators will face challenges in securing a return on their substantial investment into the creation of direct-to-cell networks.
Direct-to-cell services enable cellular connections to access network services directly from satellites in orbit. These services are enabled by satellite-capable radios in devices and partnerships with satellite network operators.
How Best to Monetise Direct-to-Cell?
The study identified two key challenges in maximising return on investment:
- The low cost of low-power IoT connections.
- The commoditisation of connectivity.
Owing to the demand for connectivity and remote monitoring from nomadic industries, such as maritime, 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; diminishing operators’ ability to secure a return on investment.
Given 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 existing cellular plans. As such, we urge operators to focus on tailoring direct-to-cell services specifically to nomadic travellers and remote subscribers.
Research author Sam Barker remarked: “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.”