How businesses can navigate UK regulatory and legal considerations for new direct-to-device satellite services

Direct-to-device (D2D) satellite technology can enable end-user devices, such as smartphones, automotive vehicles and the Internet of Things devices, to receive satellite signals directly, bypassing traditional satellite ground stations and mobile base stations.

The huge developments in space innovation over recent years, coupled with the fall in launch costs and the deployment of new satellites becoming easier and quicker, have begun to open the way for more realisable commercial opportunities in the D2D market. D2D services will enable coverage that is truly ubiquitous – and this will bring new opportunities for original equipment manufacturers, mobile and satellite network operators, and services that require 100% coverage.

While D2D services may initially be limited to emergency SOS and messaging functionality, as network standards and technology evolves, market analysts are widely predicting that, by 2030, both voice and broadband services will be directly accessible to end-user devices via satellite.

However, the regulatory environment that applies to these services has had little update since the Cold War era when the exploration of outer space was expensive and limited primarily to nation states. With the growth of D2D opportunities, there is a challenge to understand and apply emerging regulatory and legal considerations to new services.

UK licensing process

One of the first considerations for the launch of a D2D service is the satellite itself. Despite the inherent international nature of a satellite-based service, the country that the satellite is operated from and the nationality of the company operating it will determine the legal framework which will apply.

This can give rise to an opportunity for forum shopping, essentially the practice of choosing a jurisdiction based on its regulatory framework to try and obtain an advantage from a lower regulatory burden and potential cost benefits. This may have some benefits, such as a lower regulatory burden or speed of deployment. However, for the space sector, where international laws apply to the nation states and not private actors, having a nation state with established regulatory frameworks for private actors can provide certainty of operation and some reassurance of national support in the event of a cross-border dispute with another actor.

The UK space and satellite regulatory framework is generally considered to be one of the more advanced in the world. It is competitive and forward thinking with an aim of promoting the operation of space-based activities from the UK in a sustainable way. The government has the ambition for the UK to become the leading provider of commercial satellite launches in Europe by 2030. Since 2013, the UK has the second most satellites in orbit registered with the United Nations – behind only the US – and secured 17% of all private investment in the global space sector in 2022. 

The Space Industry Act (SIA) 2018 and Space Industry Regulations (SIR) 2021 regulate space activities, suborbital activities and associated activities carried out from the UK irrespective of the nationality of the company undertaking the activities. The UK also regulates UK companies that launch, procure the launch of or operate a satellite from outside the UK under the Outer Space Act (OSA) 1986 (as amended by the Deregulation Act 2015), enabling extra-territorial reach and the possibility for multiple national regulatory frameworks to apply to the same activities.

The Civil Aviation Authority (CAA) issues the necessary licences under the SIA, SIR and OSA, which are required for various activities including launching and operating satellites from the UK. The licensing process in the UK requires consultation with the CAA and the provision of evidence about the satellite organisation, safety, environmental impact and technology. The application process varies depending on the type of licence but any applicant should expect the process to take at least six months from when the application is submitted and, in practice, will be significantly longer when taking into account all pre-application activities.

Spectrum strategy

There are two primary approaches to the spectrum bands used for D2D services. D2D in mobile bands use mobile network operator (MNO) spectrum bands for unmodified phones. Satellite operators adopt this approach when they partner with MNOs and use their spectrum. The satellite acts as a space-based cell tower Mobile satellite spectrum (MSS) involves the use of the satellite operator's spectrum which requires a land-based ground component. This enables land-based devices to use the satellite spectrum without interference.

The UK is currently consulting on enabling the use of mobile bands for D2D satellite services, which would potentially give the UK the "first mover" advantage in Europe. D2D service providers will need to form a strategy as to the spectrum that they intend to use for their service to ensure the performance meets their requirements.

Spectrum is a finite resource and competition to secure frequency is increasing but the allocation of appropriate spectrum involves coordinating the use by various satellite operators, governments and other stakeholders. The International Telecommunications Union is a specialised agency of the United Nations that designates bands of frequencies for mobile and satellite use. Securing the right frequency for satellite communications is crucial to ensure the future of D2D services that are able to support real-time applications. The most commonly used bands are the C-band, Ka-band and Ku-band, and each have their own benefits and drawbacks. 

The main advantage of D2D in mobile bands over MSS is the potential for better connectivity that can span beyond patchy SMS messaging into voice calls, video calls and even internet browsing via satellite. Further technological evolution such as the sixth generation (6G) of mobile-phone technology will be essential to enable this development. There is constant evolution of the Third Generation Partnership Project (3GPP) non-terrestrial network standards to enable a device to switch seamlessly between terrestrial 5G networks and D2D satellite links.

The most critical feature of 3GPP standards would be the coordinated management of interference and service continuity because it provides the technical basis for regulators to authorise shared use of terrestrial bands, grant licence exemptions to compliant devices and impose responsibilities for quality of service and emergency obligations. Conformity with 3GPP standards would become a practical prerequisite for obtaining certifications and for regulators to accept more streamlined licensing models, reducing legal risk and facilitating the pan-European rollout of D2D.

As new spectrum is made available for D2D satellite services, there is also an opportunity for the first mover to gain an advantage in obtaining access to and control of this scarce but essential resource for spectrum sharing and sub-licensing. Commercial agreements between the spectrum holders and D2D providers may, therefore, be the most viable option for enabling future D2D deployments.

Regulation of end-user devices and services

Currently, D2D services can only be provided by satellite operators working with MNOs licensed to use the relevant radio frequencies; however, this is subject to change. Following a call for input on improving mobile connectivity from the sky and from space in 2024, Ofcom's most recent consultation considers the regulation of D2D mobile handsets to communicate with a satellite in the licensed bands.

There are three proposed options: a licence exemption; a variation to the MNO’s existing base station licence accompanied by a licence exemption; and a new licensing regime.

Ofcom has indicated a preference for the second option. The consultation closed on 20 May and a response is expected later this year or in early 2026. The conditions of any authorisation will require operators of D2D services to manage the network and prevent any harmful radio interference to existing spectrum users. The outcome will shape the regulatory landscape for any entity entering the D2D services arena. D2D service operators will be looking to keep abreast of any announcements that follow Ofcom's consultation.

EU approach to D2D licensing

The Radio Spectrum Policy Group (RSPG) has been assisting the European Commission with an opinion on the EU-level policy approach to improve harmonisation of regulation for D2D service providers and considered these issues in a public consultation between 14 February 2025 and 28 March 2025.

The RSPG has identified three approaches for the introduction of D2D services operating through an MNO's delivery of electronic communication services (ECS):

• D2D services to be introduced as an integral part of the terrestrial ECS licence.
• A licence for D2D provision requiring cooperation with the terrestrial ECS licence holder.
• A licence for D2D provision in geographical areas and available frequency bands not used by a terrestrial ECS licence holder (that is, not requiring cooperation with a terrestrial ECS licence holder).

There has been a varied approach to responses to this consultation with MNOs unsurprisingly supporting the first option, while other respondents have wanted to ensure that there is a level playing field around licensing for EU-based and non-EU-based operators.

International considerations

The launch and continued operation of a D2D service requires effective navigation of different regulatory environments. In addition to the satellite launch and operation licences that may be spread across one or more countries, operating a global D2D service requires regulatory approval in each jurisdiction for the spectrum use and the provision of the service to users. This can be both a significant resource requirement and a challenge to deliver a harmonised service across disparate regulatory frameworks.

Compliance with export control laws such as the US's International Traffic in Arms Regulations (ITAR) also need to be considered. ITAR outlines specific controls for military-use space-related technologies but, with the growth of dual-use communications applications in both the commercial and military sectors, even satellites designed primarily for commercial use could fall within the ITAR restrictions.

Osborne Clarke comment

Regulators have raised concerns that there is a lack of understanding of the complex regulatory landscape for operating in space. Businesses seeking to launch D2D services will be looking to ensure that they consider the regulatory framework and compliance at an early stage. Although space-based regulation is well established, it is outdated. Rapid innovation, including of D2D services, requires constant regulatory developments in this area. 

D2D service providers will want to ensure that they closely monitor regulatory developments across all jurisdictions in which they intend to operate, which will allow the opportunity to shape future regulation and to meet regulatory obligations. 

Alongside developing an understanding of the changing regulatory and legal landscape, businesses launching D2D satellite services will be looking to keep a close eye on commercial and customer-facing activities: effective partnerships, robust contractual agreements and clear communication with end users will play a vital role in the successful implementation of D2D services.

For further insights into developments in this area, read our companion article on commercial and customer-facing considerations for D2D satellite services.