Elon Musk’s Starlink poised to shake up Australia’s broadband
He’s disrupted the car and battery business, the space business, and has helped make cryptocurrency mainstream.
Now businessman Elon Musk stands on the cusp of upsetting Australia’s broadband business by providing internet from space through thousands of satellites passing in low Earth orbit.
Starlink, a division of SpaceX, is rolling out a constellation of thousands of satellites to provide space-based broadband on Earth. Nearly every time a SpaceX Falcon 9 rocket launches, it carries more Starlink satellites with it.
The Starlink satellite train makes its way around the globe. Supplied
The company has the potential to offer stiff competition to the NBN Sky Muster satellite service and reshape the local industry, says Paul Budde, a telecommunications consultant who tracks the development of the global industry.
“I am under the impression that most of the telcos as well as governments are not prepared for the potential shock this might give to the structure of local telecommunications market,” said Budde, in an unpublished research note.
Changes pioneered by Starlink - and emerging companies like it - could erase the digital divide seen between cities and regional towns, Budde writes. There are still more than 2 million Australians who lack internet access at home.
Visitors watch a Falcon 9 SpaceX rocket with a payload of approximately 60 satellites for SpaceX’s Starlink broadband network lift off last year. AP
While Musk has been over-optimistic in past projections – in 2016 he said SpaceX would send a mission to Mars beginning in 2018 – SpaceX has since then achieved tangible advances, such as crewed space travel to the International Space Station.
Profits from Starlink would help SpaceX “develop more and more advanced rockets and spaceships”, Musk said in 2019, making the company “a key stepping stone” on the path to establishing a “self-sustaining city on Mars and a base on the moon”.
So far SpaceX has put 1200 Starlink satellites into low Earth orbit, 310 craft this year alone.
As the number of satellites grows, the coverage and service levels are expected to improve, too.
The company has US government approval to launch nearly 12,000 satellites, some into higher orbits. Part of the disruptive effect of SpaceX, Musk’s better-known company, is its ability to drive down the cost of launching gear into low-Earth-orbit by reusing rockets, which alters the economics of launch.
Cheaper launch opens the door to a bigger fleet of satellites used for broadband, and better internet speeds.
With broadband speeds varying from 50 megabits per second to 150 mps, Starlink potentially lifts the experience of users, even in remote communities, to levels that would usually be seen in capital cities.
NBN’s Sky Muster satellite broadband – relying on two, larger satellites orbiting at a much greater distance – offer maximum speeds between 5 and 25 mps with bursts “above this speed where network conditions allow”.
Elon Musk: coming to shake up Australia’s broadband internet market. Getty
Starlink’s growing fleet of many smaller satellites – each only a 3.5 per cent of the size of a Sky Muster satellite - orbiting at just over 300 kilometres chops down the time it takes for data to travel from Earth to the satellite and back.
The so-called “latency” of Starlink service ranges from 20 to 40 milliseconds.
In part, because NBN’s much larger satellites are in geostationary orbit (at 36,000 kilometres), latency is between 600 and 800 milliseconds. This delay affects video, games or any other data intensive activity.
Starlink is “designed to run real-time, competitive video games”, Musk tweeted last year. Starlink’s latency will be trimmed again to 16 to 19 milliseconds by midyear. Its latency could eventually get “as low as 8 milliseconds”.
Depending on the success of the Starlink rollout – including how fast and stable the connections are, and how easy to use – a deeper disruption of the existing broadband market could really begin, says Budde.
Providing internet to regional Australia or under-served communities has always been a challenge, given distances, costs and the will of businesses and government.
“As competition intensifies, these companies will be forced to look beyond regional areas and might start to encroach on the more traditional fixed broadband services in suburbia as well,” Budde said.
It is expected that Starlink’s fleet of orbiting satellites will be dense enough to begin coverage in the middle of the year. The company has already established ground stations in four locations in Australia needed to make the signal robust.
The company also has a smattering of customers using the small dish receivers and routers for Starlink services already.
There is, however, still a lot of scepticism about low Earth orbit internet providers, among local telcos and government officials.
Part of the reason for the scepticism is that, to date, the economics and capabilities of existing satellite internet providers have been more limited, even as their promise was hyped.
Asked about Starlink, an NBN spokesperson said: “Emerging commercial satellite broadband networks may have the potential to provide some consumers with additional choices, however, NBN has an important obligation to help ensure all Australians have access to fast broadband, at affordable prices, and at least cost to taxpayers.”
Sky Muster has 100,000 customers. Starlink has been contacted for comment.
A Falcon 9 SpaceX rocket with a payload of 60 satellites for SpaceX’s Starlink broadband network, lifts off in Florida. AP
Starlink and NBN Sky Muster aren’t the only players in this emerging business. Macquarie bank backed-Vocus Communications also provides business NBN satellite internet. Meanwhile, Amazon plans to expand into the business with Project Kuiper.
Like in the space launch business, Musk’s venture is acting as a pace-setter, prioritising engineering and deployment, while tweaking improvements on the go.
Not everyone sees Starlink’s entry to Australia as a clear disruptor.
Telecommunications analyst Paul Budde sees SpaceX and other low Earth orbit broadband providers shaking up the local business. Supplied
Melbourne-based New Street Research analyst Ian Martin said Starlink and other satellite broadband providers won’t compete “across the wider broadband market given the in situ advantage of NBN fibre and various wireless networks.
“It may be competitive at the margin in regional areas, but as these are loss-making for NBN and retail service providers, if Starlink is successful there it may be a good thing from their point of view.”
An increase in satellite broadband choices “could give regional providers an option [other] than satellite replacement”.
The speed and availability could do a lot to level the playing field between city and regional internet.
Perhaps for that reason, in the US, the Federal Communication Commission granted SpaceX $US885.5 million ($1.1 billion) in support over 10 years to connect thousands of rural sites as part of an effort to bridge the city-rural digital divide.
High-speed broadband in regional Australia will only make relocation in a pandemic-world more viable for households and businesses.
“This will have a massive effect on the NBN, Telstra’s role as a [primary communications] provider, the mobile operators and on government policies and regulations,” Budde said.
But it could bring new frustrations.
Starlink’s webpage warns that users who live in areas “with lots of tall trees, buildings, etc. may not be good candidates for early use of Starlink”.
As a complex and expensive business, Starlink is not without its critics.
The company came under fire from astronomers last year for the streaking effect so many small sats were having on observation of the night sky.
Since then, the company has altered the altitude of the satellites to reflect less light, and designed new units with a visor “to block sunlight from hitting the brightest parts of the spacecraft”.
There are also concerns about the volume of small satellites being lobbed into orbit.
“There’s a point at which there are so many of them manoeuvring all the time that it’s a hazard to traffic” in space, Jonathan McDowell, an astronomer at the Harvard-Smithsonian Centre for Astrophysics, told Business Insider.
But like Tesla and SpaceX, the higher risk opens up new rewards.
Starlink plans an eventual spin-off from SpaceX, and a float, with analysts estimating its value between $US40 billion and more than $US130 billion.
If it’s successful, investors will be able to trade shares in near real-time from regional Australia.
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