April 2, 2024
WASHINGTON — Is Elon Musk living rent-free in your head? For many people in the satellite industry, the answer is yes. At least, that was the impression given by research presented by NSR, an Analysys Mason Company, at a recent event.
According to NSR CEO and Founder Chris Baugh, SpaceX and Starlink were the No. 1 issue for space and satellite executives, making up 40% of questions submitted to analysts ahead of the Satellite 2024 in Washington, D.C. It’s no surprise, either. SpaceX had another banner year. It had a record number of launches, made progress on the Starship super-heavy rocket and recently announced plans to commercialize its inter-satellite links. Meanwhile, Starlink reached 2.25 million broadband subscribers, expanded operations to 60 countries, entered new verticals and partnered with a few GEO operators.
Participants across the space value chain, already wary of Starlink, are also watching for further disruption from Amazon Kuiper, which is expected to begin service this year. The sudden shifts in the industry and influence of players like SpaceX have led to more than a few concerns about market dominance.
“Starlink and others may want a monopolistic strategy. Who doesn’t want to dominate the world, right?” joked NSR Research Director Jose Del Rosario. “But the other way of looking at it, based on events, is that maybe the competitors and incumbents who are being driven out of business aren’t competing with a value proposition that [fits].”
This was a repeated answer to several common questions about SpaceX and Starlink’s grip on the satcom market—and the emergence of Kuiper. Those who want to win in the market need to find their competitive edge in performance, pricing and even branding.
Is There Any Market Left? Yes
Currently, Starlink has over 5,000 satellites in orbit and approvals for thousands more. It is also moving aggressively beyond consumer broadband into government and mobility verticals with partnerships for maritime and in-flight connectivity (IFC) services. Even direct-to-device (D2D) service providers are hearing Starlink’s footsteps as they get closer to deploying direct-to-cell service. When complete, Starlink aims to have a constellation of 840 satellites for emergency SMS connectivity service with T-Mobile. There are real concerns among D2D first-movers that Starlink could catch up. AST SpaceMobile encountered funding challenges and delays in its planned commercial service with AT&T that have lengthened the timeframe to service. Lynk Global has also experienced delays and financial issues, which it aims to overcome after merging with a special purpose acquisition company (SPAC) earlier this year.
However, early D2D entrants may have bought some time after the U.S. Federal Communications Commission (FCC) denied SpaceX’s request to use mobile satellite spectrum (MSS) occupied by Globalstar and Dish. Moreover, as Carlos Placido, an independent satcom consultant, suggested, even if Starlink launches its full D2D constellation, it will still be short on supply for voice and data services “by a couple orders of magnitude.”
SpaceX’s expansion into new satcom verticals, like government, maritime and IFC, has left many GEO and LEO operators wondering what is left of the market. According to NSR, there’s a lot.
Roughly 75% of the global population lives above or below 35 degrees latitude, explained Baugh. “The problem with constellations today is most of them are deployed north of 35 degrees because that’s where the high-value population—market-wise—resides.” Reaching that population will not be easy for Starlink as it’s configured.
Across the globe, roughly 2.6 billion people and 400 million households are unconnected. Many of these are in those hard-to-reach markets that are traditionally best served by GEOs or small GEOs offering cost-effective, direct broadband services or satellite mobile backhaul. An executive from the Australian MNO Telstra recently emphasized how satellite connectivity is “existentially important for us in Asia,” particularly clients in rural Australia and the Pacific Islands.
Baugh noted that the market for the LEO mega-constellations “is not limitless.” In fact, network congestion in high-value target markets will likely create significant bottlenecks. In a model combining the supply of bandwidth from Starlink and Kuiper over the United States, NSR found that congestion in areas with over 100 users was a major constraint. “What’s absolutely remarkable is Starlink today and Kuiper fully deployed is about the same amount of supply over the U.S.,” Baugh said.
Becoming Revenue Positive in LEO
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Read the full article: https://www.kratosspace.com/constellations/articles/dancing-with-a-colossus-satellite-industry-fixated-on-competition-with-spacex-amazon
