Elon Musk focuses on telecom for next disruption with Starlink Internet

Photographer: Paul Hennessy / NurPhoto / Getty Images

Elon Musk became the world’s richest person this month by rocking the global auto industry and disrupting aviation heavyweights with reusable missiles. Now he turns his sights on another company dominated by entrenched incumbents: telecommunications.

Musk’s Space Exploration Technologies Corp. has launched more than 1,000 satellites for its Starlink internet service and registers early customers in the US, UK and Canada. SpaceX has told investors that Starlink is looking for a piece of a $ 1 trillion market consisting of in-flight internet, maritime services, demand in China and India – and nationwide clients like Brian Rendel.

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

“This is a game changer,” said Rendel, a mental health advisor who can now easily watch movies and hold meetings with clients through Zoom. “It makes me to feel as if I were part of civilization again. “

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

But the Starlink array in low Earth orbit, closer to the planet than traditional satellites, is enough to enable SpaceX to roll out services across much of North America and the UK. As SpaceX broadcasts more satellites, its coverage area will expand, expanding its potential customer base – and revenue stream – beyond today’s early stages.

SpaceX did not respond to a request for comment.

“The big problem is that people are satisfied with Starlink’s service and economy compared to other alternatives,” said Luigi Peluso, general manager at Alvarez & Marsal, who monitors the aerospace and defense industry. “SpaceX has demonstrated the viability of their solution.”

Last year, SpaceX Chief Operating Officer Gwynne Shotwell said Starlink is a company that SpaceX – one of the most highly regarded venture capital-backed companies in the US. will likely spin and become public. That dangles the possibility of another Musk company offering stock following Tesla Inc.’s sensational stock market rally last year.

Starlink faces a lot of competition. While fiber optic cable is widely considered too expensive to lay in remote regions and many rural locations, mobile connectivity is expected to make great strides with 5G and then 6G. Meanwhile, a number of innovative attempts to expand cellularly into non-served areas are being developed by other affluent companies such as Facebook Inc.

“There will always be early Starlink users who think that everything from Elon Musk is cool,” said John Byrne, a telecom analyst at GlobalData. “But it’s hard to see that the satellite’s trajectory keeps pace with the improvements that come with cellular connections.”

Risk of congestion

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

Starlink marks SpaceX’s first foray into a truly consumer-centric product. Maintaining a strong service as the customer base grows is something SpaceX has never tried before.

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

On the other hand, SpaceX says the service will improve as more infrastructure is built.

“As we launch more satellites, install more ground stations and improve our network software, the data speed, latency and uptime will improve dramatically,” Kate Tice, a senior engineer at SpaceX, said in a live stream from a Starlink mission in November.

Fan Fervor

Starlink gears up for a grand 2021, employing software engineers, customer support managers, a sales director and a land launch manager.

The fan zeal that made Tesla cars so popular with consumers and private investors extends to Starlink. Facebook groups, Reddit threads and Twitter are full of reports from early customers sharing images of their download speeds. You Tube has videos of people “Unboxing” their Starlink dish and go through the initial set-up.

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

“I just plugged it all in and it started working,” said Youngblood. “It will be very disturbing, 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 grants as part of a broader effort to make broadband available to more than 10 million rural Americans. SpaceX will focus on 35 states, including Alabama, Idaho, Montana and Washington.

‘Aging infrastructure’

“We cannot continue to give money to outdated 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 less of an issue with this technology as an option. “