Don Joyce, a Nokia Corp manager working from home at a remote lake cottage in Canada, recently abandoned his painfully slow phone-line Internet in favor of satellite broadband service Starlink, offered by Elon Musk’s Space Exploration Technologies Corp (SpaceX).
Starlink, which cost him C$600 (US$487) for hardware and a lofty C$150 monthly subscription, provides “blindingly fast” speeds when uploading videos or streaming movies, he said.
However, the beta test customer said he experiences dropouts during calls on Microsoft Teams and Zoom.
Photo: AP
“If you’re in the city and you have alternatives, I wouldn’t recommend it, but if you’re in the country, like in the middle of nowhere and you’re getting pathetic Internet service, then it’s definitely a competitor,” Joyce said.
For billionaire entrepreneur Elon Musk — CEO of electric vehicle manufacturer Tesla Inc — the success of one of his biggest bets could come down to just how many people like Joyce are out there.
Speaking at the Mobile World Congress event, Musk on Tuesday discussed progress in Starlink technology and subscriber growth as he forecast total investment costs in the satellite Internet business at as much as US$30 billion.
Photo: AP
If the service is successful, it could vastly expand the reach of broadband Internet around the world, connect Tesla vehicles, and even provide a new platform for traders and others with exotic Internet needs, people familiar with the Starlink plan said.
Yet to do that, it must avoid the fate of similar satellite ventures that have preceded it.
“Not bankrupt, that would be a big step,” Musk said last year. “That’s our goal.”
SpaceX’s Starlink division launched its “Better Than Nothing Beta program” in the US in October last year, with data speeds up to a competitive 150 megabits per second.
Early reviews are mixed, with some users complaining of the problems that have always plagued satellite Internet: sensitivity to weather.
Recent heat waves have caused new problems.
“I’m gonna have to spray it with a garden hose to reboot my Internet... That just feels so wrong,” a Reddit user who said he lives in Arizona posted earlier this month, along with an error message saying “Offline: Thermal shutdown” and “Starlink will reconnect after cooling down.”
SpaceX president Gwynne Shotwell in April said that the firm has “a lot of work to do to make the network reliable.”
Service should improve with more satellites and other improvements: Starlink has launched more than 1,700 of its 260kg satellites so far, and envisions more than 40,000.
The economics are daunting nonetheless.
Musk has said that Starlink could serve less than 5 percent of Internet users and still generate US$30 billion a year in revenue.
Critics have said that is wishful thinking.
“Is the demand there for tens of millions of subscribers at that price point?” asked analyst Tim Farrar, president at TMF Associates. “In most parts of the world, if you said to someone, your broadband service will cost you 100 US dollars a month, they’d be like, incredulous.”
He said there might be wealthy people in isolated areas, “but there’s just not very many of those people.”
Starlink would also struggle for enough capacity to support that level of demand, especially as people are consuming more data for video streaming, Farrar said.
That would mean “significant additional expenditure on upgrading the satellites and adding more satellites,” he added.
Pricing pain could be eased by nearly US$900 million in US Federal Communications Commission subsidies earmarked for Starlink for bringing the Internet to rural areas.
SpaceX vice president Jonathan Hofeller said COVID-19 highlighted the need for “access to quality Internet” anywhere on the globe.
Perhaps more importantly, Starlink said it can drive costs down by building its own terminals and satellites.
It has hired engineers from chipmakers Broadcom Inc, Qualcomm Inc and others to design its own communications chips, a person familiar with the matter said — an approach similar to that taken by Tesla.
Starlink has more than halved the terminal cost from US$3,000 and expects it to be in a range of a few hundred dollars within the next year or two, Shotwell said in April.
“Lowering Starlink terminal cost, which may sound rather pedestrian, is actually our most difficult technical challenge,” Musk wrote on Twitter last year.
Starlink also benefits from SpaceX’s low-cost launch capability.
“When you own pieces of the stack, you can do really technically sophisticated things at an affordable cost,” said Misha Leybovich, a former Starlink sales director.
Still, competition promises to be fierce. Amazon.com Inc subsidiary Kuiper Systems LLC has a directly competing project, while OneWeb — a collapsed satellite operator rescued by the British government and India’s Bharti Group — has vowed to be in the game as well.
OneWeb said on Tuesday that it has secured an additional US$500 million investment from Bharti, bringing its total funding to US$2.4 billion.
Meanwhile, terrestrial telecom providers are racing to deploy high-speed 5G broadband services.
The rapid spread of wireless and terrestrial broadband, along with high prices, were significant factors in killing previous low-Earth-orbit satellite ventures. Iridium Communications Inc, which was backed by Motorola Inc, went through bankruptcy after billions of dollars in investment, while a similar fate met Teldesic, backed by Microsoft Corp founder Bill Gates.
SpaceX, Amazon and a number of others have “created quite a race that no one is absolutely sure whether there is a big enough market for it,” Iridium chief executive officer Matthew Desch said.
Taiwan’s technology protection rules prohibits Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) from producing 2-nanometer chips abroad, so the company must keep its most cutting-edge technology at home, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the remarks in response to concerns that TSMC might be forced to produce advanced 2-nanometer chips at its fabs in Arizona ahead of schedule after former US president Donald Trump was re-elected as the next US president on Tuesday. “Since Taiwan has related regulations to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” Kuo said at a meeting of the legislature’s
GEOPOLITICAL ISSUES? The economics ministry said that political factors should not affect supply chains linking global satellite firms and Taiwanese manufacturers Elon Musk’s Space Exploration Technologies Corp (SpaceX) asked Taiwanese suppliers to transfer manufacturing out of Taiwan, leading to some relocating portions of their supply chain, according to sources employed by and close to the equipment makers and corporate documents. A source at a company that is one of the numerous subcontractors that provide components for SpaceX’s Starlink satellite Internet products said that SpaceX asked their manufacturers to produce outside of Taiwan because of geopolitical risks, pushing at least one to move production to Vietnam. A second source who collaborates with Taiwanese satellite component makers in the nation said that suppliers were directly
Top Taiwanese officials yesterday moved to ease concern about the potential fallout of Donald Trump’s return to the White House, making a case that the technology restrictions promised by the former US president against China would outweigh the risks to the island. The prospect of Trump’s victory in this week’s election is a worry for Taipei given the Republican nominee in the past cast doubt over the US commitment to defend it from Beijing. But other policies championed by Trump toward China hold some appeal for Taiwan. National Development Council Minister Paul Liu (劉鏡清) described the proposed technology curbs as potentially having
EXPORT CONTROLS: US lawmakers have grown more concerned that the US Department of Commerce might not be aggressively enforcing its chip restrictions The US on Friday said it imposed a US$500,000 penalty on New York-based GlobalFoundries Inc, the world’s third-largest contract chipmaker, for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯). The US Department of Commerce in a statement said GlobalFoundries sent 74 shipments worth US$17.1 million to SJ Semiconductor Corp (盛合晶微半導體), an affiliate of SMIC, without seeking a license. Both SMIC and SJ Semiconductor were added to the department’s trade restriction Entity List in 2020 over SMIC’s alleged ties to the Chinese military-industrial complex. SMIC has denied wrongdoing. Exports to firms on the list
RSS