Wall Street Analysts Say Musk's Starlink Poses No Real Threat To Traditional Broadband

from the gonna-need-more-satellites dept

To be clear: Space X’s Starlink broadband service won’t be taking on traditional broadband providers in major metro areas. Instead, the company will be using thousands of low orbit satellites (with lower latency than traditional satellite broadband) to deliver marginally decent service to under-served rural Americans, assuming it winds up being profitable longer term. In a country where an estimated 42 million can’t get any broadband at all (during a raging pandemic, no less), any improvement helps.

At the same time, many Musk fanboys and press outlets continue to overstate Starlink’s (which provides speeds “up to” 100 Mbps for $100 per month plus a $500 first month equipment charge) overall impact. And many telecom analysts continue to try and temper this unbridled enthusiasm, warning that by Musk’s admission, the service isn’t going to have the kind of capacity necessary to truly disrupt the traditional fixed broadband market. That includes Wall Street analyst Craig Moffett, who has been trying to calm investors in traditional broadband companies worried about Starlink’s disruptive potential:

“For investors worried about Starlink’s threat to terrestrial broadband, we think the threat is minimal,” Moffett surmised. “Based on our analysis of the data available today ? Starlink is much better suited for bringing broadband to unserved or underserved markets than it is for bringing competition to already-wired markets.”

Even in the largely rural (and maritime) markets Musk’s company is targeting, the overall impact is notably smaller than you might think:

“According to his analysis of available capacity and anticipated usage, Moffett estimates that Starlink’s US TAM, at a full deployment of about 12,000 low-earth orbit (LEO) satellites (about 1,400 are in orbit today), is in the range of just 300,000 to 800,000 households, or less than 1% of the US market, Moffett notes.”

On the maximum end, Moffett’s study guesstimates that Starlink could ultimately serve as many as 6 million US subscribers once the company upgrades the low orbit satellites and boosts overall satellite total to 42,000. But again for context: there are 42 million Americans with no access to broadband whatsoever (double official FCC estimates), and another 83 million US consumers stuck under a broadband monopoly (usually Comcast). Tens of millions more live under a broadband duopoly, usually consisting of Comcast and a local phone company that probably hasn’t upgraded its DSL lines since 2004 or so.

So again, while Starlink will be a very good thing for rural users with no options who can afford the $100 monthly charge, it’s simply not going to revolutionize the sector anytime soon.

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Companies: space x

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Comments on “Wall Street Analysts Say Musk's Starlink Poses No Real Threat To Traditional Broadband”

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Anonymous Coward says:

Starlink can also serve areas like Northern Canada, Alaska, Siberia, Saharan Africa, Most of Australia, Oceana etc, without impacting how many customers is has in the US. The US is an ideal first Market for a US company. Once the system is polished, why would Starlink leave its satellites idle for 3/4 of the time.

Anonymous Coward says:

Re: Re: Re:

You mean the bits of coverage which specifically mentioned it?

Or is it the fact that global coverage has fuck-all impact on the problematic broadband market in the States? You know, the country with real bullshit ISP issues, unlike most of the world?

Can you guys just put your Musk boner away for ten seconds whenever one of his gigs gets mentioned? Really.

Anonymous Coward says:

Re: Re: Re:

Karl’s coverage consistently neglects the global impact Starlink will have.

Well, can you say something about that? Why and where do you expect a "huge impact"? I imagine it will have such an impact for oceanfaring ships, where satellite services are the only choice. Same for Antartica. Elsewhere, I’m not sure. Cellphones are wildly popular in poor areas of the world, and are much cheaper than Starlink and better able to cope with high population densities.

Anonymous Coward says:

Re: Re: Re: Re:

Look and see just how big Africa is relative to the US China and India. The Sahara desert alone is as big as the contiguous united states, and away from the coast, has a low population density, and is terrible terrain for running long distance cable or fibre. With Australia, most of the population is on the coast, and the Interior has few people, well spread out. Similarly Siberia has a low population spread over a large area. All are areas much more difficult to connect by fibre than the rural areas of the US.

Anonymous Coward says:

Re: Re: Re:2 Re:

Which is fanfookentastic, but has absolutely nothing to do with the premise that Starlink will have pretty much zero effect on the US broadband market incumbents. Which is the whole bloody point.

Go ahead and write comments/articles about increased service for some people, which is significant and important, but stop posing it as an argument that Karl or anyone is ignoring something.

It’s almost like i miss the Kurzweil fanclub at this point.

Anonymous Coward says:

Re: Re: Re:3 Re:

Interestingly, Starlink has never claimed it would compete with broadband in urban areas. However the state of US broadband is such that many people used wishful thinking to make it a future competitor. Also, evaluating Starlinks future prospect purely in terms of the US market ignore that the system has global coverage.

The US is the initial market, but then that makes sense for the initial development, and Elon is known for using a fast iteration approach to development. Starlink is working on what capabilities are needed for the Satellites and the practicalities of managing connections, and keeping up the launch cadence required. Doing experimental development is not a problem,as the satellites have a short 3 to 5 year life.

Scary Devil Monastery (profile) says:

Re: Re: Re:

"What he writes here is spot on for the U.S. market, but Starlink will have a huge impact from a global perspective."

Assuming Musk keeps at it. Starlink requires huge and consistent investment. The very second some government decides the environmental impacts of that many rocket launches or the starlink constellation itself mandates restriction and regulation, starlink will no longer be viable.

Yeah, the promise of starlink is nice. This is not in dispute. But so is the convenience of fossil fuels and the efficiency of enlightened ultra-authoritarian government.

It’s not a long-term solution and may not be a sustainable one. In fact it’s guaranteed every government will do their damnedest best to gouge starlink for as much as they think they can get away with.

DannyB (profile) says:

Yeah, right

Just give it time. Starlink will gradually build up their constellation to ten times the size it presently is.

Maybe they will even seek permission to enlarge it further.

Then one day — OMG, Starlink suddenly is a threat to traditional broadband.

People once thought you could never land or re-use a rocket. Now people are only amazed when SpaceX FAILS to successfully land a booster.

Fortunately, no states, thus far, require Starlink to be sold through a "dealer network".

Anonymous Coward says:

Re: Yeah, right

The limitation on the constellation is frequency and footprint size, and without beam steerable antennas on the ground, the footprint cannot be reduced. Unlike mobile phones, it is not possible to reduce the footprint (cell size) to a few hundred metres, and without the ability to track multiple satellites with steerable beams, Starlink will have gone for an optimum number of satellites in their constellation.

Paul B says:

Re: Re: Yeah, right

starlink uses lower earth orbit to specifically address this. At LEO, with very narrow attuned antenna, along with overlapping frequency ranges, they can have something like 5 satellites overlap the same physical space and effectively create a grid. Some technology’s can improve this even more like distributed MIMO for inbound communication and polarization for downstream (adding spin and filtering it out on the ground).

Anonymous Coward says:

Re: Re: Re: Yeah, right

they can have something like 5 satellites overlap the same physical space and effectively create a grid.

And just how many thousand cell towers would be used inside that footprint, which could span several cities?

Because of that frequency division, one aerial can receive signals from several satellites at the same time. Get more sophisticated to separate closer spaced satellites and you are looking at multiple steerable aerials at the user end.

BruJr (profile) says:

Re: Re: Yeah, right

Um, why do you have the idea that there are not beam-steerable antennas on the ground? I can’t speak to the antennas on the data centers, the personal ground terminal has two different steering modes.

One is a coarse mechanical electric motor, used to roughly position the terminal to cover the largest number of satellites.

The other is the ~1200 emitting elements of the transceiver phased array, which can steer the beam +/- 90 degrees from normal (although constrained to something less than that in practice, I would imagine).

Since the primary steering mode is purely solid state, I believe this means that the array can maintain communication with multiple satellites simultaneously if the birds are visible.

Since Starlink also plans to include laser communication between satellites at some point in the future (I think there are a few in orbit right now that are testing this), it means that effective coverage becomes much less critical on the location of ground based data centers (i.e., the places that connect Starlink into the internet).

Then scalability primarily becomes a limitation of the total bandwidth that can be provided by the constellation.

Anonymous Coward says:

Re: Re: Re: Yeah, right

With low earth orbit, and with user ground stations limited to high elevation satellites, the link is switching satellites every few minutes, and as there is a need to connect to the next satellite before dropping the current link, a mechanical steerable antenna is out. Also connection requires at least two, and preferably three satellite connections, which is one antenna for a wide beam, but three for narrow beam operations.

I expect the Starlink ground station to use larger steerable arrays, as they gave to be placed where there are good fibre connection on the backbone.

James Burkhardt (profile) says:

Re: Yeah, right

Starlink and Musk have both stated that even when complete, the current tech cannot and will not be able to compete with broadband on speed in dense residential areas. If you think otherwise you are in disagreement with a guy who over hypes everything he produces.

"The challenge for anything that is space-based is that the size of the cell is gigantic… it’s not good for high-density situations," Musk said. "We’ll have some small number of customers in LA. But we can’t do a lot of customers in LA because the bandwidth per cell is simply not high enough."

The tech seems like it will be more efficient in providing service to isolated, remote, and rural areas.

Anonymous Coward says:

Re: Re: Re: Yeah, right

I’m not sure it’s fair to say Musk over-hypes everything he produces. He is wildly optimistic about timelines, and he has a bad habit of enthusing about whims that may or may not ever see the light of day, but the truly important things (to him) he does pretty much always achieve (eventually). Betting against him long term is a bit of a mug’s game. Also, over the last few years he has developed a bit of a habit of under promising and over delivering (module Y timelines, Starling "better than nothing Beta" as examples). Also I’ve seen a number (not large so far, but there if you look) of critics blaming Musk for things that he had nothing to do with (e.g. Thunderfoot’s "takedown" which repeatedly sneered at SpaceX for cost comparisons made by a NASA engineer in a paper that on the video you could clearly see was a NASA paper).

That said, I agree that Starlink is unlikely to ever compete with terrestrial internet in densely populated areas. It ultimately comes down to how large a footprint the beams have when they reach their destination (both up, where it determines how close satellites can orbit, and down, where it determines how many customers can be served by a satellite or satellites on the same wavelength(s)). I can see some room for technical innovation, such tighter beams from a phased array antenna, but to really reduce the footprint, you would have to go to something like a laser, which then has aiming issues.

I really think that, ultimately, Starlink will have two classes of customer – remote, isolated people who are too expensive to serve with cable or micorwave links, and (assuming laser to laser latency on the satellites isn’t a killer) customers who will pay highly for low-latency (lower than point-to-point glass), long-distance links.

James Burkhardt (profile) says:

Re: Re: Re:2 Yeah, right

I am not betting against musk. I quoted him. Starlink will not be able to compete with traditional broadband, according to Elon musk. My talk of overhype was intended to point out that musk wouldn’t undersell his tech, which I think you’d agree with. I was responding to the comment claiming Starlink would compete with traditional broadband.

EGF Tech Man (profile) says:

Depends on context

Yes, Starlink is of little competition to the traditional urban cable cos and wireline carriers, who are generally in a position to offer multi Gbps service with small latency about the same cost.

Starlink might be a little more disruptive to cellular carriers for fixed service, the cellular carriers will have to make sure their data rates stay competitive.

It will be a lot more disruptive for remote WISPs and telcos, many of whom struggle to provide even 10Mbps to their customers now and have to charge higher rates just to cover costs (when you have less than one customer per mile of line, the costs doesn’t get spread out), although wouldn’t surprise me to see some WISPs try to use Starlink as a site backhaul….

The biggest disruption might be for services live VSAT when used for things like remote telemetry. VPN over Starlink would be much cheaper to install and a bit cheaper for service, also no longer would have to orient sites to have clear southern exposure, etc.

Anonymous Coward says:

Re: Remember

Quick, everyone that knows any villagers, please contact them. Immediately. Somewhere a village is sorely missing its idiot.

Boblivious: For future reference, although microwaves CAN kiil you, they cannot spread viruses. That is physically impossible. Also, to kill or injure the microwaves have to be unusually intense.

Anonymous Coward says:

Re: Over priced

Which is, of course, your right. But this is not the case for many (isolated communities that cannot get good healthcare but could with a decent community internet connection, ships, planes, troups posted to peacekeeping/making or even war in remote, backwards areas, people who would love to live in a wilderness and could earn good money by telecommuting, rural parents whose children have moved to an assortment of cities who would pay almost anything to zoom on a regular basis – the list goes on and on). Also remember that the $499 startup fee is a major loss-leader (the actual cost of production is more like $1,300 to $1,500) and the 99$ per month is actually quite competitive with existing (crappy) satellite internet service,

Again, it is definitely your prerogative to refuse Starlink service, but apart from you being unwilling to spend that much, I really don’t see what point you are trying to make.

jilocasin (profile) says:

the comments are thick with Elon fans....

It seems the comments are thick with Musk fans. I am going to go out on a very thick branch here and predict that this will go the way of every other pronouncement Elon Musk has made. Over-hyped, under performed and massively scaled back, if fully deployed at all.

Just look at his projects so far:

hyperloop, a.k.a hover train in a tunnel

  • 100+ year old design
  • morphed to low vacuum
  • then from hovering to wheels
  • then open sourced his idea (how generous) for others to build

boring tunnel Las Vegas loop

  • fully autonomous pods, actually requires drivers
  • speeds up to (I guess he was working at his ISP creds already) 130 mph. Completed and announced with a speed of 30mph.
  • advanced operation consists of; getting in the car and telling the driver where you want to go (hmmm, why didn’t a taxi, uber, lyft, ever think of that? I guess they aren’t the genius that Elon Musk is)

Tesla fully autonomous vehicles.

  • keeps crashing into stationary objects
  • can’t even get to work in the closed loop system of the Las Vegas tunnel.

Reusable spacecraft.

  • Hello, what do you think the space shuttle was?
  • NASA successfully carried people and cargo
  • Elon is still only carrying small amounts of cargo

Revolutionary battery design

  • 1.5x the capacity, (for only 1.5x the size 😀 )

If history is any indicator, his current satellite broadband system will be massively over budget, under performing, and scaled back to something fairly ordinary. Unfortunately, he’s already busy polluting low earth orbit (making a mess of astronomy) and got his snout at the public trough, asking for funding to bring broadband to under served areas like pentagon parking lots.

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