WASHINGTON – The way Elon Musk sees it, he'll be helping telcos by taking hard-to-reach customers off their plates with broadband services that will soon be offered by SpaceX's Starlink business.
The Starlink project aims to use low Earth orbit (LEO) satellites as a delivery mechanism for relatively high-speed broadband services to remote areas. SpaceX has secured licensing from authorities to launch more than 12,000 satellites into orbit and the company said it will be able to increase Starlink broadband speeds it provides with each satellite launch. Starlink's target markets include the Northern US and Canada this year, "rapidly expanding to near global coverage of the populated world by 2021," according to the Starlink website.
At the Satellite 2020 conference here on Monday evening, Musk said the global business of providing Internet access to the underserved could be, "as a rough approximation," as high as $30 billion a year. "Starlink is not some huge threat to telcos. I want to be super clear: it is not," Musk told the crowd here.
On the contrary, it could be helpful to telcos by serving populations not well covered by cell towers, copper or fiber, Musk said.
"5G is great for high density situations," Musk said, "but it's actually not great for the countryside, you know, for rural areas. It's not great; you need range. And so in any kind of sparse environment 5G is really not well suited."
"So Starlink will effectively serve the three or four percent hardest to reach customers for telcos, or people who simply have no connectivity right now. Or the connectivity is really bad. So I think it will be actually helpful and take a significant load off the traditional telcos," Musk said.
Musk said Starlink is aiming to provide broadband service with latency "below 20 milliseconds," fast enough for a "fast-response video game at a competitive level."
On the ground, Musk said the user equipment will be a sort of "UFO on a stick" and users will point it at the sky and plug it in. Those instructions can be done in either order, he joked, his point being that Starlink wants to make the experience dead-easy for consumers.
By definition, a company providing connectivity that's easy to get and reaches anywhere has to be a huge concern to telcos and cable providers – companies designed and run for decades to exist as unchallenged regional monopolies.
Musk's Starlink will get competition in space. Several companies are investing in satellite broadband opportunities, including a new joint venture from Vodafone Group and Rakuten, SpaceMobile, that was revealed earlier this month.
While Starlink is looking to provide hardware on the ground that's easy to set up and configure, SpaceMobile and others are looking to deliver service that will allow for "seamless roaming to and from terrestrial cellular networks at comparable data rates without any need for specialized satellite hardware," the group's press release claims.
Starlink, SpaceMobile and others will be targeting different geographies and customer sets, but the overall effect on telcos could be similar: parts of a $30 billion global connectivity market (using Musk's best guess) could disappear from the telcos' addressable market.
Lest anyone think that SpaceX and Starlink will be the regional telco of the skies, Musk said SpaceX, according to its business model, is also helping other companies launch their satellites. He said he doesn't see an issue with helping firms competitive to Starlink establish their space infrastructure so they, too, can compete. "We're giving them a good deal, by the way," Musk said of SpaceX's ability to help satellite constellations get into orbit.
Musk added: "The world seems to have an insatiable appetite for bandwidth. So we're certainly happy to launch other satellites and, you know, we don't think Starlink is going to destroy all the other satellites or something like that – definitely not."