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.