The D2D Demand Boom: Can Regulators, Satellite Network Providers, and Mobile Network Operators Keep Up?

Robust D2D Demand:

• Japan’s Direct-to-Device (D2D) Consumer Market: NTT DOCOMO Starlink Direct gained over 5 million subscribers in 2 months just after the service was launched in April 2026. Currently, the satellite service is free of charge, but a significant proportion of users with compatible smartphones has already activated the feature. This indicates rapid growth in comparison to KDDI’s AU Direct Starlink service launched in April 2025, which surpassed 1 million users in the span of 3 months and over 4 million users in a year.
• Federal Communications Commission (FCC) Identifies More Bands for Unlicensed D2D: The FCC is setting its sights to seek out more than 225 Megahertz (MHz) of unlicensed spectrum for unlicensed D2D services. This move is designed to benefit unlicensed wireless devices such as laptops, smartphones, and Internet of Things (IoT) devices that already rely heavily on unlicensed technologies such as Wi-Fi and Bluetooth®. FCC Charmain Brendan Carr believes this approach will fuel a wave of new devices and applications without the burden and cost of obtaining a spectrum license. According to the draft order, this regulatory shift is a response to the massive interest and surge in investments in D2D communication services, which demonstrated the need for more spectrum to support the increased demand.

Delayed Satellite Service Launch:

• AST SpaceMobile: The company pushed back its D2D satellite commercial launch target to early 2027. From its initial target of commercial launch with 45 to 60 satellites in orbit by the end of the year, the goalpost has now shifted to next year largely due to delayed launch plans. This delay directly impacts major Mobile Network Operators (MNOs) partners like AT&T and Verizon, while Rakuten Mobile—the only MNO partner from Japan with AST SpaceMobile—also faces delayed service rollouts. To reduce reliance on third-party launch providers, especially in light of the recent Blue Origin’s New Glenn failure that carried BlueBird 7, AST SpaceMobile is also raising up to US$1 billion and exploring partnerships and/or acquisitions to further vertically integrate its business and mitigate risks.

Satellite Network Operators (SNOs) & MNOs Partnership Dynamics:

• T-Mobile Juggling New D2D Joint Venture (JV) and Starlink’s Agreement: According to T-Mobile Chief Executive Officer (CEO) Srini Gopalan, satellite accounts for 0.0002% of T-Mobile’s network usage and that increased to 0.0003% in the busiest summer months. He also mentioned in April that Starlink D2D usage has underperformed expectations since the debut of T-Satellite last July. Even though both companies remain active and are continuing their partnership through this year, it seems likely that T-Mobile’s primary focus going forward will shift toward its JV with Verizon and AT&T.

MNOs are making D2D a standard offering by bundling it into existing mobile plans, while standardizing the underlying integration through emerging industry initiatives, such as the JVs.

Consumers: The Reality of D2D Adoption Today

• Paid Versus “Free” Service: Satellite services as part of an integrated mobile plan (like NTT DOCOMO’s initial launch) usually create massive activation spikes within a few months because there is zero friction. It is a useful feature to have on hand, especially during safety and emergency situations. However, the real test comes when operators charge a monthly subscription fee (like T-Satellite). Once it is a paid service, it depends on the user profile and whether they view it as a “need” instead of a “good-to-have.” As pointed out by T-Mobile’s CEO with satellite accounting for 0.0002% of T-Mobile’s network usage, consumers are treating D2D today as a passive safety net for rural dead zones, hiking, or natural disasters and emergency situations. Currently, it is not intended for daily scrolling or video streaming. It is key to note that the “free” D2D service provided by MNOs actually refers to a ‘bundled service’ where users only get access through their subscription with a telco that has a partnership with a SNO, hence the price of the service is folded into the MNO subscription Average Revenue Per User (ARPU). ABI Research’s latest update of its Satellite Direct-to-Device: All Regions market data (MD-SATCN-104) forecasts that bundled D2D service revenue will grow from US$33.7 million in 2026 to US$3.44 billion in 2035, at a Compound Annual Growth Rate (CAGR) of 67.3%.
• Non-Terrestrial Network (NTN)-Capable Devices Ease Adoption: The number of NTN-capable flagship models from major brands such as Apple, Samsung, Google, Huawei, OPPO, Xiaomi, and HONOR has spiked since 2022. Other device types adopting NTN include vehicles, tablets, and wearables. Wearables saw a large influx of new D2D-capable offerings in 2025 with the Apple Watch Ultra 3, Google Pixel Watch, Garmin Fenix, and Huawei Watch Ultimate 2. Premium-luxury models from automotive Original Equipment Manufacturers (OEMs) such as Zeekr, Polestar, AITO, BYD, and Xiaomi in China also offer D2D services bundled with the car (often via Geespace). (See ABI Research’s Satellite Direct-to-Device Market Data Overview: 3Q 2026 presentation (PT-4057).) The number of non-smartphone D2D subscribers is forecast to grow from 0.7 million in 2026 to 15 million in 2035, at a CAGR of 82.9%, highlighting a clear trend of increasing availability of NTN-capable devices, which is lowering barriers to adoption and accessibility.

Service Providers: Vulnerabilities and Diversification of Partners

• Supply Chain Vulnerabilities in the Space Sector—Domino Effects: If a satellite service provider does not have its own rockets and launch capabilities (such as SpaceX), satellite deployment and constellation scaling progress will depend heavily on third-party rocket providers. This results in over-reliance with ripple effects cascading to the rest of the ecosystem. The failure of Blue Origin’s New Glenn carrying BlueBird 7 demonstrates how a single launch issue can cause a domino effect, forcing partners of AST SpaceMobile like AT&T, Verizon, and Rakuten to delay commercial rollouts.
• Carrier Diversification Through JVs: MNOs are cautious about putting all their eggs in one basket. This is why operators like T-Mobile are carefully managing their alliances, such as partnering with Starlink and entering into a JV with AT&T and Verizon for D2D services. It is possible that T-Mobile’s Return on Investment (ROI) from its T-satellite service is lagging, inferred from extremely low network utilization and the gap in customers’ willingness to pay for the service (US$10/month). Nonetheless, partnering with Starlink highlights marketing dominance over AT&T and Verizon—where satellite service has not yet been commercialized.

• MNOs Focus on Long-Term Value Integration: MNOs cannot treat satellite D2D purely as short-term marketing to win headlines, and must focus on sustainable monetization models. Instead of relying solely on exclusive bilateral deals that limit flexibility, carriers should lean heavily into collaborative frameworks (like the proposed AT&T, T-Mobile, and Verizon JV). Pooling spectrum and standardizing platforms will protect profit margins and prevent tech giants from dominating the value chain.
• SNOs to De-Risk Supply Chains and Accelerate Vertical Integration: Launch is a key component in the space value chain. Satellite operators have been aggressively pursuing vertical integration to increase operational capability; for example, RocketLab-Iridium’s (see ABI Insight “The Vertically Integrated Era: What Rocket Lab’s Iridium Acquisition Means for NTN and D2D”) and Amazon-Globalstar’s recent acquisitions (see ABI Insight “Amazon’s US$11.6 Billion Acquisition of Globalstar: Redrawing the Map of D2C Market Dynamics”). In order to scale commercial constellations, SNOs must have their own launch capabilities (e.g., SpaceX) because their ability to launch satellites into orbit will not depend on third-party launch providers’ availabilities and their success rates, but instead be within their own control.
• Regulators to Maintain Momentum and Flexible Frameworks: As consumer demand surges globally, regulators must proactively remove friction to prevent spectrum blocks and streamline policies. This must be done before the actual deployment and implementation of the technologies to ensure seamless adoption. Lowering the regulatory burdens for hardware manufacturers, chipset vendors, and new market entrants helps foster a more open and competitive environment that accelerates innovation. At the same time, regulatory decisions on spectrum allocation could have broader market implications. For example, the FCC’s push to enable D2D services over unlicensed bands could be a signal to encourage alternative implementation paths outside The 3rd Generation Partnership Project (3GPP) NTN standards, potentially opening new revenue opportunities for chipset vendors and other technology players beyond the traditional telco value chain.