Elon Musk targets Telecom for next disruption with Starlink Internet

Photographer: Paul Hennessy / NurPhoto / Getty Images

Elon Musk became the world’s richest man this month by pushing the global automotive industry and disrupting heavyweights in space with reusable rockets. Now he is dominating another business that is dominated by established positions: telecommunications.

Musk’s Space Exploration Technologies Corp. has launched more than 1,000 satellites for its Starlink internet service and is signing early customers in the US, UK and Canada. SpaceX has told investors that Starlink wants a fishing rod for a $ 1 trillion market that consists of the Internet, maritime services, demand in China and India – and rural customers like Brian Rendel.

Rendel became a Starlink tester in November after years of struggling with slow internet speeds on his 160-acre farm overlooking Lake Superior in the Upper Peninsula in Michigan. After paying about $ 500 for the equipment, FedEx arrives with a flat dish and antenna. For $ 99 a month, Rendel now gets speeds of 100 megabytes per second for download and 15 to 20 for upload – much faster, he says, than its previous internet provider.

“It’s a game changer,” says Rendel, a mental health consultant who can now easily watch movies and hold meetings with clients about Zoom. ‘It makes me bird as if I were part of civilization again. ”

SpaceX launched Starlink satellites on its Falcon 9 rockets in groups of 60 at a time for months, and the 17th Starlink launch was on January 20th. There are now about 960 functioning satellites in orbit announcing an era of mega-constellations that have raised concerns about visual pollution for astronomers.

But the Starlink array in a low-Earth orbit, closer to the planet than traditional satellites, is enough to enable SpaceX to expand services across a wide portion of North America and the United Kingdom. expand the potential customer base – and revenue stream – beyond the initial stages of today.

SpaceX did not respond to a request for comment.

“The big problem is that people are happy with Starlink’s service and economy compared to other alternatives,” said Luigi Peluso, managing director of Alvarez & Marsal, which follows the aerospace and defense industry. “SpaceX has demonstrated the viability of their solution.”

Last year, SpaceX’s chief operating officer, Gwynne Shotwell, said that Starlink was a company that owned SpaceX – one of the richest valued companies in the US – will likely turn out and make public. That depends on the possibility that another Musk company could offer shares after last year’s sensational stock market gains by Tesla Inc.

Starlink will face a lot of competition. Although the fiber optic cable is generally considered too expensive to lay down in remote regions and in many rural locations, cellular connection is expected to make great progress with 5G and then 6G. Meanwhile, a number of innovative efforts are being developed to expand cellular areas to unoccupied areas by other affluent companies such as Facebook Inc.

“There will always be early Starlink contractors who think anything about Elon Musk is cool,” said John Byrne, a telecom analyst at GlobalData. “But it’s hard to see the satellite orbit keeping pace with the improvements that are taking place with the cellular system.”

Accumulation risk

SpaceX, based in Hawthorne, California, is best known for launching rockets to global satellite operators, the U.S. military and NASA. Last year, SpaceX made history by becoming the first private company to fly astronauts to the International Space Station.

Starlink points to SpaceX’s first foray into a true consumer-facing product. Maintaining strong service while expanding the customer base is something SpaceX has never tried before.

“Like any network, Starlink will enjoy great reviews while underutilized,” said industry analyst Jim Patterson. “However, it will be challenged with the same congestion issues as their peers as they expand their base.”

Then SpaceX says the service will improve as it builds more infrastructure.

“As we launch more satellites, install more ground stations and improve our networking software, data speeds, delays and time will dramatically improve,” Kate Tice, a senior engineer at SpaceX, said in a live stream of a Starlink mission in November.

Fan Fervor

Starlink prepares for a major 2021, hiring software engineers, customer support managers, a director of sales and a country launch manager.

The fan spirit that made Tesla cars such a hit with consumers and retail investors extends to Starlink. Facebook groups, Reddit threads and Twitter are filled with reports from early customers sharing images of their download speeds. You Tube has videos of people Boxing out their “Starlink dish” and going through the initial setup.

Ross Youngblood lives in Oregon and works remotely as an engineer for a technology company in San Jose. He owns a Tesla model X and follows All Things Musk fairly closely. He got Starlink before Thanksgiving.

“I just plugged everything in and it started working,” Youngblood said. “It’s going to be very disruptive, and I don’t think enough people are paying attention.”

Many other customers are waiting in the wings. In December, the Federal Communications Commission SpaceX awarded $ 885.5 million in subsidies as part of a larger effort to bring broadband to more than 10 million Americans in rural areas. SpaceX will focus on 35 states, including Alabama, Idaho, Montana and Washington.

Aging infrastructure

“We can not continue to throw money at older infrastructure,” said Russ Elliot, director of the Washington State Broadband Office. “With Starlink you can be anywhere. The cost of building in deep rural or expensive areas is now a problem with this technology as an option. ”