KDDI Becomes the First Operator to Launch Direct-to-Cell Data Services – But Is It Overhyped?

September 2025

Telecoms & Connectivity

Alex Webb

Senior Research Analyst

In recent years, the potential of satellite networks to improve and expand services has been a key focus of mobile network operators. One area that has gained significant momentum is direct-to-cell. Direct-to-cell refers to services that allow smartphones to access services such as SMS, voice, and Internet services by connecting directly to satellites.

However, while direct-to-cell can include services such as Apple and Globalstar’s Emergency SOS service, it is typically used to refer to direct satellite services for unmodified smartphones. These services use terrestrial spectrum and 3GPP standards to allow smartphones to connect directly to satellites without the need for proprietary hardware to be installed.

The introduction of direct-to-cell for unmodified smartphones has attracted considerable attention from mobile network operators (MNOs). A key reason is that for satellite providers to use terrestrial spectrum, they need the involvement of mobile network operators.

Moreover, by making direct-to-cell available to unmodified mobile devices, the market is also able to grow much more quickly and at a lower cost, as mobile subscribers no longer need to have mobile devices with specific hardware, and there is no need for smartphone manufacturers to spend money on satellite hardware.

KDDI Becomes the First to Add Data Services to Its Direct-to-Cell Offering

In the past year, a number of MNOs have announced new direct-to-cell services, such as T-Mobile, KDDI, and One NZ. Early on, most of these services have focused on SMS, with SMS requiring low bandwidth relative to voice calls and data. Early direct-to-cell services, such as T-Mobile’s, have also include basic location sharing and MMS.

However, early leaders in the direct-to-cell market are beginning to move towards adding data services to their direct-to-cell offerings. In August 2025, KDDI, a Japanese mobile network operator, announced that it would be expanding the capabilities of its direct-to-cell service. The service will support 19 applications including Google Maps, X, and various weather and environmental information applications. Likewise, T-Mobile is planning to add data services to its direct-to-cell offering in October 2025.

While SMS and voice are key services for which to add coverage Juniper Research believes that mobile data will be critical to increasing consumer demand for direct-to-cell services. Consumers are accustomed to receiving voice and SMS services for free from their terrestrial networks, and smartphone manufacturers such as Apple already provide limited SMS capabilities for free.

Moreover, much of the perceived value from mobile plans now comes from the data services provided by MNOs. Direct-to-cell data service is currently more limited than terrestrial network services, with access being limited to apps such as weather and Google Maps, but these additional services are critical to key use cases such as navigation; meaning that they will have an outsized impacted on the value of direct-to-cell services.

However, Juniper Research believes the addition of data service will only be significant if mobile network operators can ensure that their direct-to-cell services are reliable. Direct-to-cell can only expand coverage if it is reliably accessible for consumers, as consumers will not pay for occasional additional coverage.

Is Direct-to-Cell Overhyped?

While direct-to-cell is undoubtedly an exciting technology, it will also be a difficult one for operators to profit from. In 2025, 95% of the global population lives in areas served by mobile broadband, and over 80% of mobile data is consumed indoors, meaning that direct-to-cell is a complementary service to terrestrial connectivity. However, for a complementary service, the cost of direct-to-cell is high. T-Mobile is currently charging $10 a month for its T-satellite offering in partnership with Starlink, while KDDI offers pricing of around $11 a month for au Starlink Direct.

This means that access to direct-to-cell comes at a premium for many consumers, especially given the limited capabilities relative to traditional cellular connectivity. While the cost of direct-to-cell services is likely to fall over time, it is unlikely to fall enough for most consumers to consider the service. As a result, Juniper Research believes that monetising direct-to-cell via a subscription-based model will be difficult, with many mobile subscribers likely to opt out of the service and remain unconnected in dead zones. Therefore subscription-based direct-to-cell will remain a niche market over the next five years.

However, subscription-based approaches are not the only way in which MNOs can approach monetisation. Mobile network operators can use the appeal of direct-to-cell services to upsell mobile subscribers on higher end mobile tariffs. For example, T-Mobile provides direct-to-cell services for free to its subscribers as part of its Experience Beyond mobile tariff, and Rogers provides its direct-to-cell service at no additional cost to its customers on the Rogers’ Ultimate plan.

Juniper Research believes that most mobile subscribers using direct-to-cell will have access due to the service being included as part of a bundle. Direct-to-cell services, especially SMS and voice, will be used to increase the stickiness of mobile subscriptions and upsell mobile subscribers on premium mobile tariffs. This will make it more difficult for MNOs to measure their return on investment, but by ensuring that they have usage-based agreements that effectively limit cost, MNOs can ensure that they minimise their risk when launching direct-to-cell services.

Therefore, MNOs will benefit from the addition of direct-to-cell services, however its impact on revenue and mobile subscribers will be more niche and understated than the hype in the market.

Alex is a Senior Research Analyst within Juniper Research’s Telecoms & Connectivity team, focusing on the latest developments in operator and telecommunications markets. His recent reports include Network APIs, Cellular IoT, and AI in Cellular Networks.