2026 Will Mark a Turning Point for Direct-to-Cellular (D2C) Satellite Connectivity

Direct-to-Cellular (D2C) satellite connectivity is set to hit primetime as Starlink has launched early direct-to-smartphone messaging services across several of its partner markets (New Zealand, Australia, Japan, and the United States). In addition to these partnerships, SpaceX recently announced a new partnership with VEON (Netherlands) and Kyivstar (Ukraine) to roll out services in Ukraine in 4Q 2025. With this announcement, SpaceX now can showcase the real-world applications of D2C in one of the most critical markets today. No doubt this is a result of the success that was seen after Starlink’s launch in Ukraine back in 2022, shortly after Russia’s invasion. This was followed by a period of rapid growth (growing from 1 million subscriptions at the end of 2022 to over 4.6 million subscriptions at the end of 2024), driven by numerous success stories of Starlink's impact on Ukraine's defense, which likely fueled further adoption. While Starlink’s success shouldn’t be attributed solely to its deployment in Ukraine, it certainly played a part in accelerating the system's adoption by weary governments.}

Musk is no stranger to leveraging a critical situation to the advantage of Starlink’s adoption. In 2024, Starlink gained special temporary authority by the FCC to deploy Direct-to-Cell (D2C) services in specific areas of the United States affected by Hurricane Helene—a move, no doubt, which likely influenced the Federal Communication Commission’s (FCC) decision to approve Starlink’s Direct-to-Cell service using the new Supplemental Coverage from Space framework. Indeed, while barriers (regulatory or otherwise) may be present, a good use case or two is often enough to sway the hearts and minds of the entrenched resistance. The use of D2C connectivity for emergency use cases in the event of natural disasters? Check. The use of D2C connectivity for national defense—connecting civilians and likely military personnel? To be checked in 4Q 2025.

Musk’s apparent strategy has worked for Starlink broadband services in the past and, no doubt, will have a similar impact on its D2C services. The inevitable stream of success stories highlighting lives saved and operations restored by Starlink D2C will usher in a wave of Fear, Uncertainty, and Doubt (FUD) and demand for D2C services. This will cause an acceleration of adoption for D2C services by 2026, when ABI Research anticipates in its forthcoming Satellite Communications: Direct-to-Cellular & NTN Deployments & Subscriptions market data (MD-SATCN-102) update that D2C connections will reach 5.5 million and grow to 220 million by 2035, largely driven by satellite Long Term Evolution (LTE) connections.

While accelerated growth can be expected for Starlink and SpaceX, this strategy apparently did come with risks. For one, SpaceX has become a persistent target for cyberthreats as noted in ABI Insight “The Evolving Space Cybersecurity Landscape: Is the Space Industry Secure?” This risk most likely helped inform SpaceX on key ways to harden and improve its system for future deployment of mass consumer connectivity applications like D2C. Furthermore, Musk’s new dual role as both a government advisor and the owner of companies will likely draw criticisms on the network’s purpose and potential connections to the government beyond commercial support. Nevertheless, as the world continues to face uncertainty and turmoil, with ongoing concerns over data sovereignty and spectrum rights, the future of D2C may yet be bright for those willing to take calculated risks.

As the market is still emerging and largely nascent, ABI Research expects the D2C opportunity to be large and grow over a more extended period, particularly for standards-based technologies (The 3rd Generation Partnership Project’s (3GPP) Internet of Things (IoT)-Non-Terrestrial Network (NTN) and New Radio (NR)-NTN standards). When compared to satellite LTE (where terrestrial spectrum is used), users will need to go out and purchase new devices (i.e., smartphones, tablets, etc.) that support NTN bands. In many ways, this is perfect for equipment vendors looking to introduce another strategy for stimulating device replacement cycles. On the other hand, it’s far easier for the user to leverage their existing device to connect over satellite LTE, especially in more price-sensitive regions. A 3GPP standards-based approach, or an unmodified satellite LTE approach, requires a different satellite system design and network investments by operators. Both strategies need considerable coordination and investment. Communication Service Providers (CSPs) in many geographies, as well as in space, are not willing to take on the investment risk until the D2C opportunity is more apparent.

There are opportunities for companies looking to build on and accelerate the growth of this ecosystem. In this way, it is advised that companies seeking a D2C strategy position themselves with a unique value proposition, pricing strategy, and market expansion/cooperation strategy that effectively targets the needs of specific markets and regions (e.g., landing rights, pricing, and cooperation with local CSPs, and build infrastructure and hire talent in-country for market access.). It is important to prioritize monetizing high-quality services over usage volume. ABI Research anticipates a range of NTN services from two-way messaging to voice, video, and Internet applications to develop over the next few years, driving revenue opportunities.