Cellular Spectrum Enters the Satellite Market: Starlink, T-Mobile, and the Next Wave of Telco-SatCom Convergence

In November 2024, SpaceX received a series of significant authorizations from the U.S. Federal Communications Commission (FCC) to modify operations of the Starlink network. First, the FCC authorized up to 7,500 Starlink Gen 2 satellites to operate in lower orbital shells at altitudes of 340 Kilometers (km), 345 km, 350 km, and 360 km in Very Low Earth Orbit (VLEO)—sub-400 km altitude—from 525 km, 530 km, and 535 km in Low Earth Orbit (LEO). Second, the FCC authorized SpaceX to operate Direct-to-Cellular (D2C) services called Supplemental Coverage from Space (SCS)[1] on T-Mobile’s cellular frequencies 1910 – 1915 Megahertz (MHz) and 1990 – 1995 MHz, and to operate in certain Mobile Satellite Services (MSS) sub-bands within the 1429 MHz to 2690 MHz (L-band and S-band) outside the United States. This is the first license of its kind issued by the FCC, allowing a satellite operator to use a telco provider’s cellular spectrum to deliver services. The service has officially launched with a freemium model for T-Mobile users, offering 3 months free, followed by a US$15/month subscription. Verizon and AT&T customers can access the service for US$20/month per line.

This also officially grants SpaceX the authority to use the satellite L-band (1 – 2 Gigahertz (GHz)) and S-band (2 – 4 GHz) (widely used by Internet of Things (IoT), Non-Terrestrial Network (NTN), and D2C services) outside the United States. In this regard, SpaceX still needs to obtain approval from individual countries or licenses to provide services, indicating that SpaceX may have already made a deal with a holder of such a license (like EchoStar). Soon after, D2C competitor AST SpaceMobile announced an agreement for long-term access (80+ years) for up to 45 MHz of L-band MSS spectrum in the United States and Canada held by Ligado, plus access to an additional 5 MHz in the 1670 – 1675 MHz (L-band). This now gives AST access to the critical L-band used in MSS, alongside its authorization to use the V-band, S-band, and Ultra-High Frequencies (UHFs) to support connectivity. Notably, Viasat also acquired spectrum from Ligado, gaining exclusive rights to operate Ligado’s L-band license outside the United States. Not long after these agreements were announced, Viasat announced another agreement with the European Space Agency (ESA) to develop a new Direct-to-Device (D2D)/D2C satellite system for Europe in LEO.

[1] Supplemental Coverage from Space (SCS) is a new framework from the FCC allowing cellular spectrum currently held by telcos to be leased to satellite operators for services.

While SCS remains an emergent framework in the United States, other territories such as the European Union (EU), the United Kingdom, Canada, Australia, Peru, and Japan have been actively working on frameworks for D2C communications, which also considers satellite operators using terrestrial licensed spectrum. New Zealand, for example, has already launched the SpaceX D2C service with One NZ, while Lynk Global, another operator using cellular spectrum, has launched in Palau and the Cook Islands. While some telcos may argue against demarcating their spectrum to satellite operators for D2C services, the opportunity to increase the value and revenue potential of their overall suite of cellular services will be hard to pass up, especially when governments see an opportunity for a cut. This bodes well for satellite operators and telcos looking to introduce D2C/D2D services of their own quickly, as there will inevitably be greater flexibility for acquiring spectrum for services. For SpaceX, AST SpaceMobile, Viasat, and Iridium, these developments enable them to offer connectivity solutions that integrate multiple connectivity standards effectively, if they so choose.

For SpaceX, the license to operate in the MSS L-band and S-band outside the United States (likely acquired from EchoStar, which holds S-band authorization for outside the United States) enhances its D2C service flexibility, enabling the use of leased cellular spectrum in more advanced markets and/or dedicated satellite spectrum, and the NTN standard to connect devices where the market has yet to adopt some form of SCS. This means that SpaceX is now positioned to offer The 3rd Generation Partnership Project (3GPP)-compliant connectivity via terrestrial 5G/Long Term Evolution (LTE) (using leased cellular waveform) and NTN (New Radio (NR) and IoT using satellite waveform) standards. Likewise, the LEO architecture of the AST network, the LEO D2D application focus with Viasat’s new constellation (implying a similar design philosophy to SpaceX and AST D2C satellites), and the announcement of a hybrid NTN standard and proprietary approach by Iridium signify the rise of hybrid satellite providers that are standard agnostic and can use terrestrial cellular and satellite MSS spectrum.

This relationship in spectrum ownership, while opening many revenue opportunities, also raises concerns around the power dynamic and inevitable clash for resources at the next World Radio Congress (WRC) in 2027. On one hand, satellite leveraging cellular spectrum brings more services to users and helps bridge the digital divide. On the other hand, justification for clear division in between International Mobile Telecommunications (IMT) and satellite spectrum assignment in the UHF, L-band, and S-band will become more opaque. It’s likely then that hybridization means stakeholders in NTN and D2C relationships will need to deliver greater value and drive innovation in their respective frequency ranges to ensure that current spectrum battle lines are maintained.

As user devices evolve to natively support satellite solutions through advancements in chipsets, Operating Systems (OSs), communication protocols, and algorithms, capitalizing on the D2C and NTN opportunity requires an agnostic approach to satellite connectivity. By leveraging a hybrid model that supports both proprietary and standardized connectivity solutions, operators maximize backward compatibility and support for verticals (government and defense, for example) that prioritize security and communications resiliency via backup channels. Therefore, D2C/D2D service costs will need to consider the unique characteristics between cellular frequency ranges (700 MHz to 2.6 GHz for 4G, and up to 39 GHz for 5G), and the L-band and S-band, which will significantly affect D2C service performance, including bandwidth, atmospheric attenuation, and data rates. Furthermore, L-band and S-band MSS do not need to consider “on the ground” exclusion zones like leased cellular spectrum for satellite access does, which may influence pricing premiums as well.

Consequently, D2C monetization should differ between connectivity standards and frequency bands, where proprietary links may provide a more secure and custom service, while 3GPP IoT NTN or 3GPP LTE will focus on providing low packet to mid-range services, such as text and voice calling. Finally, 3GPP 5G and 3GPP NR NTN will address higher bandwidth, low latency applications, such as web applications and video conferencing, which will command a higher price point. Much is to be seen in 2025 for satellite and cellular convergence and the future looks bright for SCS, with over 300,000 devices connected via SCS in 2024, primarily in the wake of the United States’ Hurricane Helene and the L.A. wildfires. ABI Research expects that this number for SCS will increase to well over 1.6 million devices and over 3.4 million devices across the greater D2C and NTN landscape in 2025, driven by the aggressive expansion of D2C services in international markets and integration into mobile phone OSs. Furthermore, Starlink’s telco-agnostic approach to working with not just T-Mobile, but Verizon and AT&T in the U.S. market signals positive adoption potential as more users will be able to access the service. These forecasts and dynamics are explored in extensive detail in our latest release of Satellite Communications: Direct-to-Cellular & NTN Deployments & Subscriptions (MD-SATCN-102) and our first release in a series of reports, including Evolving NTN & D2C Business Models with SCS (PT-2897).