Saturday 26 December 2020

Starlink By Elon Musk For Satellite Internet Broadband Services Operational Soon- Possible Threat to Singtel, Starhub and Netlink Trust?

Elon Musk is planning to launch its SpaceX's Starlink services soon. Starlink is actually a satellite internet constellation being constructed by SpaceX providing satellite Internet access. The constellation will consist of thousands of mass-produced small satellites in low Earth orbit, working in combination with ground transceivers. An estimated investment of more than US$10 billion has been pumped into this decade old project from Elon Musk. This space internet broadband project actually went on track as per forecasted with various beta testing being done already. It is scheduled to launch soon in USA and Canada this year and to rapidly expand to attain global coverage of the entire world by 2021. I was rather surprised that Elon Musk managed to pull this off and they are in the midst of going live soon. 

Will it pose a threat to 5G technology and fibre optic network of Singtel, Starhub and Netlink Trust?

Firstly, the original market segment for Starlink seems to be more for rural areas. In big countries such as USA, the vast geographical area makes it almost impossible to lay fibre optic cable to connect every home. I do not think that there will be many take up  in Singapore even if it is given regulatory approval by the Singapore Government due to the fact that Singapore is a tiny country that is already very well connected by fibre optic and also upcoming planned 5G base stations setup from the telecommunication/internet cabling companies.

Secondly, the technology of satellite connection based on beta testing has speed of only 150Mbps and latency rate of 20ms to 40ms. With 5G network deployment using high frequency bandwidth, we can get up to 1Gbps and latency rate of 1ms. Hence competitive services such as direct fibre optic cable and upcoming 5G network services are superior relative to the connectivity services offered by Starlink.

Thirdly, the reported cost seems to be US$99 per month and a one time USD500 setup kit. SpaceX expects to generate US30 billion per annum from selling this internet services globally. In Singapore, the US$99 is a lot more expensive than what the main telecommunication companies, Singtel, Starhub and M1 are offering. Hence I think there is a lack of competitive advantages for such services in certain countries which are small and already built up extensive fibre optic cabling infrastructure.

Parting Thoughts
Satellite internet connection seems to be an upcoming technology ready for deployment. There are also other players like Amazon and OneWeb (went into bankruptcy but subsequently rescued by UK government and India Bharti Group). Elon Musk's Starlink seems to be leading ahead in the global deployment of thousands of satellites to beam high speed internet from anywhere in the world. My personal thoughts are that it should not pose a threat to Singtel. Starhub and Netlink Trust in our Singapore market due to the aforesaid mentioned 3 points. 

What are your thoughts?

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