Analysis · Direct-to-Device Analysis Series

Seven questions about direct-to-device

Two satellite operators may transmit on American mobile spectrum, and both rent it. One spends fifteen times its revenue on capital and holds leases that all expire on one day in May 2028. The other has agreed to pay $19.6 billion to own its spectrum and, in October 2026, to buy the low band it lacked. Read the seven parts to find out:

  1. who holds which spectrum and on what terms
  2. why the operators rent and what the capital is costing them
  3. what a phone and a satellite can physically do between them
  4. what owning spectrum costs against renting it, including the reported price of low band
  5. what the FCC and Congress have already decided
  6. who has the money and who is supplying it
  7. whether SpaceX becomes a carrier or stays a supplement, and the public signals that would show it first

Download eBookSecond edition, October 2026 · 87 pages

The parts

Part 01What is deployed todayWho holds which spectrum, and on what terms?Only two satellite operators hold American terrestrial spectrum for direct-to-device, and both rent it. AST holds 1,197 lease records across 654 markets and SpaceX 173 in the PCS G block. Every one of AST’s expires on 9 May 2028. In orbit, 824 of the 10,702 Starlink objects in CelesTrak’s element sets on 17 September 2026 flew below 400 km, where the direct-to-cell shells are. Nothing in the catalogue says which of them carry the payload.FCC licence database · CelesTrak elementsPart 02Why the operators are doing thisWhy do it this way, and what does it cost?AST spent $1,064.7M on capital in FY2025 against $70.9M of revenue, and another $859.2M in the first half of 2026, so it rents its spectrum rather than buying it. Iridium, by contrast, earned $114.4M on $871.7M of revenue in the same year. The date that bounds AST’s business is 9 May 2028, when every one of its lease authorisations expires.SEC XBRL filingsPart 03How the radios workWhat can the radios physically do?Capacity per user is bounded by a 5 to 6 MHz service channel shared by everyone under a beam, and no satellite count changes that. AST closes the link with a large phased array on 223 to 243 satellites, SpaceX with up to 7,500 satellites flown low at 340 to 360 km. On 6 October 2026 the FCC authorised a further 15,000 direct-to-device satellites at 326 to 335 km and settled the aggregate out-of-band limit it had deferred since 2024, at −110.6 dBW/m²/MHz next to SpaceX’s downlinks. Two days later SpaceX agreed to buy up to 14 MHz of paired 800 MHz, the first low band it has contracted to own; getting through a wall at 800 MHz from orbit takes an antenna about six times the area of one at 2 GHz, and the satellites just authorised are built for 2 GHz.FCC orders · SatNOGS · orbital elementsPart 04What spectrum costsWhat does it cost to stop being a tenant?SpaceX leases 10 MHz from a carrier today and has agreed to pay $19.6B for 65 MHz of its own, at $0.887 per MHz-POP, with the second-step closing expected on or about 30 November 2027: six and a half times the bandwidth, with no landlord. AST, by contrast, could not have found the $5.4B to $7.2B its 24 MHz would cost, so it rents to May 2028. On 8 October 2026 SpaceX also agreed to buy Grain Management’s 800 MHz portfolio, up to 14 MHz paired of low band, at an undisclosed price; the Wall Street Journal reports about $8B, which would be $1.68 per MHz-POP.EchoStar 8-K · T-Mobile 10-Q · FCC orders · auctionsPart 05Where the rules get writtenWho writes the rules, and what have they already decided?The FCC approved both EchoStar transactions on 12 May 2026, and its waivers let SpaceX use the spectrum for terrestrial, space-based or hybrid networks, so in our view the permission question is closed. Congress has restored auction authority to 2034 with an 800 MHz pipeline behind it. Auction 113, the first in four years, cleared at $2.658 per MHz-POP; Verizon paid 88.5% of the money, and SpaceX bid for the first time and won two licences. The performance terms behind the waivers are satellite metrics tested from 30 November 2027 at two, four and nine years, and the FCC wrote the same terms into the 800 MHz band on 1 July 2026, with a competitive process that ended in SpaceX’s agreement to buy it on 8 October.FCC orders DA 26-471, 26-653, 26-1078 · auction results · CRSPart 06Who can afford to playDoes anyone have the money?The big three carriers generated $105.4B of operating cash flow in FY2025 and had $33.8B left after capex and dividends, against roughly $337B of long-term debt less cash. Every new commitment must displace an old one. AST has about fourteen months of cash at its current rate of spend. Both operators that own their spectrum have agreed to be bought, by Amazon and Rocket Lab, and SpaceX held $93.5B of cash on 30 June 2026.SEC 10-K, 10-Q and 8-K filingsPart 07What happens nextCarrier or supplement?Two dates anchor the series: the EchoStar to SpaceX second closing, expected on or about 30 November 2027, and the expiry of AST’s 1,197 leases on 9 May 2028. Every commercial negotiation in this market falls between them, and the filings that would reveal either scenario are public. On 8 October 2026 one of them appeared: SpaceX agreed to buy up to 14 MHz of paired 800 MHz, the first low band it has contracted to own, and said it will deploy it on the ground as well as from orbit. The performance obligations now carry dates, and the first test falls on 30 November 2029.FCC & SEC filings · company releases

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