Broker: Maybank Research Pte Ltd
Date of Report: September 9, 2025

Starlink’s Direct-to-Cell Revolution: What SpaceX’s Spectrum Play Means for ASEAN Telcos and Investors

Introduction: A New Chapter for Satellite-to-Smartphone Connectivity

SpaceX is poised to reshape the telecommunications landscape with its USD17 billion acquisition of EchoStar’s AWS-4 and H-block spectrum licenses. With this move, SpaceX will accelerate the rollout of Direct-to-Cell (D2C) services, enabling standard 4G/5G smartphones to connect directly to Starlink’s constellation of low earth orbit (LEO) satellites—no specialized hardware required. This innovation sharply reduces friction for adoption and unlocks vast potential, particularly in rural and underserved regions where traditional networks fall short.

Direct-to-Cell: Complementary Innovation, Not a Full Replacement

Unlike the original Starlink service, which requires proprietary terminals, D2C leverages terrestrial spectrum, integrated into Starlink’s satellites, to provide voice, messaging, and, eventually, broadband-quality data directly to conventional smartphones. However, D2C is not a total substitute for terrestrial networks—critical gaps remain for in-building coverage and areas like tunnels or underground stations. Given the national-level regulation and licensing of spectrum, the most realistic growth path for D2C lies in partnerships with local mobile operators.

ASEAN Market Impact: Opportunities and Limitations

While D2C’s potential is vast, its immediate role is as a complement to terrestrial networks, not a replacement. This is especially true as technology and unit economics mature. Smaller telcos, particularly those aiming to expand reach into remote and rural zones, stand to benefit—these are areas where larger incumbents have historically held pricing power.
Within ASEAN, Indonesia and the Philippines emerge as primary markets due to their challenging archipelagic geographies and uneven network penetration. Indonesia boasts ~97% 4G coverage by population, but many outer islands remain underserved. Conversely, Singapore, Thailand, and Malaysia already enjoy near-universal 4G coverage with favorable topography, limiting the incremental value D2C can offer.

Case Study: Optus in Australia—A Glimpse Into Competitive Leverage

The Australian market provides a telling example. Here, Optus trails Telstra in regional and remote coverage, reflected in a 15-20% discount in Optus’s mobile pricing. As D2C matures, Optus could layer this technology atop its robust urban and suburban footprint, bridging rural coverage gaps and narrowing the perceived quality divide with Telstra. This would enhance Optus’s value proposition and competitive positioning in challenging geographies.

ASEAN Telco Valuation Comparison: Key Players and Metrics

For investors tracking the region’s telecom sector, a granular comparison of ASEAN telco players is crucial. The table below summarizes key valuation metrics, including market cap, P/E ratios, EV/EBITDA, ROE, and dividend yields for leading operators:

Company-by-Company Insights and Strategic Outlook

Singapore

• Singtel (ST SP): With a market cap of USD55.5 billion, Singtel leads the pack, trading at P/E multiples of 24.5x (FY1) and 21.3x (FY2). Its robust ROE (12.2-12.3%) and dividend yields (4.3-4.6%) reflect its dominant position and stable cash flow profile.
• Starhub (STH SP): Starhub trades at lower P/E multiples (15.1x FY1, 12.8x FY2) and offers strong ROE improvement and rising dividends, underlining its value proposition in a high-coverage market.

Thailand

• AIS (ADVANC TB): Demonstrates impressive profitability with ROE exceeding 42% and a solid dividend yield. P/E stands at 20.5x (FY1), reflecting investor confidence in its market leadership.
• True Corp (TRUE TB): Trades at higher P/E multiples (24.8x FY1, 18.8x FY2), but offers a compelling growth story as it narrows the gap with AIS.

Malaysia

• Axiata (AXIATA MK): Commanding a P/E of 40.5x (FY1) and 33.4x (FY2), Axiata’s valuation reflects investor expectations of future growth and recovery, despite modest ROE and dividend yields.
• Maxis (MAXIS MK): Offers stable returns with P/E around 18x and healthy ROE and dividends, making it a defensive play in the sector.
• Celcom Digi (CDB MK): A solid performer with consistent yield and moderate valuation, reflecting its strong market position post-merger.
• Time dotCom (TDC MK): Focused on high-margin enterprise connectivity, Time dotCom commands higher EV/EBITDA multiples due to its niche positioning.
• Telekom Malaysia (T MK): With a 16% ROE and a sub-16x P/E, Telekom Malaysia combines profitability with value, supported by dividend growth.

Indonesia

• PT Telkom (TLKM IJ): The Indonesian giant offers the lowest P/E multiples (12.9x FY1, 12.3x FY2) among large caps, with strong ROE and dividends, leveraging its market reach even as D2C opens new rural opportunities.
• Indosat (ISAT IJ): Trades at attractive valuations (12x FY1 P/E), with improving ROE and dividend yields, benefiting from rural expansion and technology adoption.
• XL Axiata (EXCL IJ): Presents a higher P/E (41.3x FY1) but demonstrates improving ROE and a solid rural strategy aligning with D2C potential.

Philippines

• PLDT (TEL PM): With a P/E of 6.9x (FY1) and dividend yields above 8%, PLDT stands out for investors seeking income and value in a market ripe for D2C disruption.
• Globe (GLO PM): Slightly higher P/E (10.5x FY1), but strong ROE and dividends highlight its market strength and growth prospects.

Strategic Takeaways for Investors

• D2C as a Complement, Not a Threat: Starlink’s direct-to-cell innovation is set to complement, not cannibalize, existing telco infrastructure, especially in rural and hard-to-reach locations.
• Biggest Gains for Smaller and Rural-Focused Operators: In ASEAN, the real upside lies with smaller telcos and those targeting remote geographies, while urban-focused incumbents in Singapore, Thailand, and Malaysia see limited incremental gains.
• Australia as a Mirror: Optus’s potential use of D2C to close its rural coverage gap with Telstra hints at similar opportunities for ASEAN’s challengers.
• Valuation Differentiation: Investors should note the wide range of P/E, EV/EBITDA, ROE, and dividend yields among ASEAN telcos, reflecting varying growth prospects, risk profiles, and exposure to rural expansion.

Conclusion: Monitoring Starlink’s Next Moves

Starlink’s spectrum acquisition and D2C strategy mark a major milestone for satellite communications, with the power to bridge persistent coverage gaps across ASEAN’s diverse markets. While not a threat to entrenched telcos, this technology will reshape competitive dynamics, offer new growth channels for smaller players, and reward investors who can pick the right beneficiaries in this unfolding transformation.

Key Companies Mentioned

• Optus (fully owned by Singtel)
• Telstra
• EchoStar
• SpaceX (Starlink)
• Singtel
• Starhub
• AIS
• True Corp
• Axiata
• Maxis
• Celcom Digi
• Time dotCom
• Telekom Malaysia
• PT Telkom
• Indosat
• XL Axiata
• PLDT
• Globe

Glossary

• LEO: Low Earth Orbit (satellites)
• D2C: Direct-to-Cell (satellite-to-smartphone connectivity)

Contacts for Further Information

For detailed research or company-specific queries, refer to Maybank’s regional analyst teams covering ASEAN, Australia, India, and global telecom sectors.