The Sovereign Shell: Redefining Satellite 5G and Direct-to-Device Networks

OTTAWA, ON – October 28, 2026 — The race to connect standard smartphones directly to satellites has largely been dominated by proprietary, closed-loop mega-constellations. But a newly minted partnership forged in the Canadian capital is signaling a paradigm shift, proving that the future of orbital connectivity might not belong to a single tech monopoly, but rather to a cooperative, multi-tenant ecosystem built on open standards.

During an official bilateral visit between UAE Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan and Canadian Prime Minister Mark Carney, Terrestar Solutions Inc. signed a landmark memorandum of understanding (MoU) with Equatys. The agreement establishes a standards-based interoperability framework between Terrestar's planned Canadian low-Earth orbit (LEO) constellation, CaStar, and Equatys—a global shared infrastructure platform backed by up to $1 billion in equity from co-founders Space42 and Viasat.

This partnership marks the first real-world implementation of the "sovereign shell" architecture. It is a model designed to harmonize the massive scale of global satellite networks with the strict data sovereignty requirements of individual nations, offering a compelling alternative to the vertically integrated systems championed by companies like SpaceX's Starlink.

The 'Sovereign Shell': Countering the Mega-Constellation Monopoly

For mid-tier nations, the direct-to-device (D2D) satellite revolution has presented a geopolitical conundrum: how to provide ubiquitous mobile coverage to remote citizens without ceding control of critical telecommunications infrastructure to foreign commercial entities.

The Terrestar-Equatys MoU addresses this directly. Under the framework, Terrestar maintains independent ownership and operational control over its Canadian space and ground assets. Domestic data remains strictly within Canadian regulatory jurisdiction, routed through local gateways. Yet, when a Canadian user travels abroad—or when the domestic network requires surge capacity—the CaStar constellation seamlessly interworks with Equatys's planned 2,800-satellite global network.

"The future of mobile satellite connectivity won't be built by countries or constellations acting alone," said Jacques Leduc, President and CEO of Terrestar Solutions. "It will be built through open standards-based networks that combine national sovereignty with global reach, positioning us to compete at scale. While working hand-in-hand with the Canadian space ecosystem, CaStar is Canada's contribution to that future."

This architecture is a stark contrast to the closed ecosystems of AST SpaceMobile or Starlink. By utilizing published, vendor-neutral interfaces aligned with 3GPP non-terrestrial network (NTN) specifications, the sovereign shell prevents proprietary lock-in. It allows nations to protect their data sovereignty while avoiding the multi-billion-dollar burden of launching and maintaining a standalone global constellation.

The TowerCo Model Reaches Orbit

Financially, the D2D market—projected by industry analysts to reach between $30 billion and $70 billion by 2040—requires staggering capital expenditures. Terrestar's initial 66-satellite CaStar phase alone is projected to cost no less than C$500 million. Recognizing that building a LEO constellation independently is financially daunting, the industry is looking toward terrestrial telecom models for inspiration.

Equatys operates essentially as a "TowerCo" in space. Just as terrestrial mobile network operators (MNOs) share physical cell towers to reduce capital and operational expenditures, Equatys allows multiple operators to pool spectrum, ground gateways, and satellite beams.

Space42 and Viasat have formally established Equatys with a binding agreement, each initially contributing $400 million, with Space42 expected to add an additional $200 million in a future funding round. Space42, which reported over $1.1 billion in cash and short-term deposits earlier this year, has already allocated $600 million in initial capital expenditure to seed the constellation build-out across a 2026–2027 manufacturing timeline.

"By advancing a global, standards-based open architecture with an interoperability framework via a shared infrastructure model, we are continuing to expand an ecosystem that will be uniquely positioned to drive mass adoption within the significant D2D and next-generation MSS market," said Mark Dankberg, Chairman and CEO of Viasat.

Rather than competing for the same MNO contracts with redundant, overlapping satellite fleets, participating operators can automate resource requests, allocation, monitoring, and usage accounting through a centralized interoperability layer.

Interoperability Driven by 3GPP Standards

The technical linchpin of this agreement is its strict adherence to 3GPP NTN standards, specifically bridging the gap between current Release 17/18 capabilities and the highly anticipated Release 20, which will include native functionality for interworking distinct satellite systems.

Terrestar's CaStar LEO constellation is expressly designed to support 3GPP band n256, utilizing 40 MHz of S-band spectrum (1980-2010 MHz uplink and 2170-2200 MHz downlink). Equatys, meanwhile, brings the technical capability to operate across over 100 MHz of globally allocated and coordinated Mobile Satellite Services (MSS) spectrum.

Because the network relies on standard 3GPP protocols, conventional 5G smartphones and Internet of Things (IoT) devices will connect to the satellite network without requiring specialized hardware or proprietary chipsets. When commercial services roll out—targeted by Terrestar for 2028, mirroring Equatys's deployment timeline—a user's phone will simply treat the satellite as another cell tower, governed by standard GSMA roaming frameworks.

"This MoU demonstrates how sovereign satellite systems and shared global infrastructure can work together to deliver D2D services globally," said Karim Michel Sabbagh, Managing Director of Space42. "We are introducing a model where national capabilities and international collaboration reinforce rather than compete with one another."

Bridging Canada's Northern Connectivity Gap

Nowhere is the practical application of this technology more critical than in Canada. With a vast, sparsely populated landmass and a rugged Arctic frontier, terrestrial cell coverage is economically unviable for much of the country. Terrestar already connects remote regions and First Nations communities through its Strigo service via the Echostar T1 geostationary satellite.

The upcoming CaStar LEO constellation will upgrade this capability to a cellular-like experience across Canada's entire territory. Beyond consumer convenience, this has profound implications for national security and Arctic sovereignty. By keeping domestic data within Canadian jurisdiction, the government and military can leverage commercial 5G satellite networks for secure communications in the Far North—a capability that is increasingly vital amid shifting geopolitical tensions in the Arctic circle.

The diplomatic backdrop of the MoU signing further underscores the strategic nature of this technology. Contextualized within the broader Canada-UAE Comprehensive Economic Partnership Agreement (CEPA), the partnership highlights how advanced space infrastructure is becoming a core component of international trade.

"The UAE's deepening trade and investment links with Canada, embodied in the newly signed Comprehensive Economic Partnership Agreement, are laying the foundations for long-term, mutually beneficial collaborations in critical sectors," noted His Excellency Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of Foreign Trade. "Collaboration of this kind reflects the UAE's vision of deeper economic integration, where partnership drives innovation that can cross borders, scale quickly and attract long-term capital."

As the D2D market matures, the clash between closed proprietary networks and open standards-based consortiums will define the next decade of telecommunications. If Terrestar and Equatys can successfully execute their shared infrastructure model by 2028, they will not only bridge the digital divide for remote communities but also provide a blueprint for how nations can embrace the space economy without compromising their digital borders.