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The intense battle for satellite Internet

With its Starlink project, SpaceX wants to offer high-speed internet all
over the world. Amazon and OneWeb are trying to do the same.

 

There are 2,666 functional satellites currently in orbit around Earth, according to the Union of Concerned Scientists (UCS). While this number is already staggeringly high, it’s nothing compared to how many there will be in years to come. SpaceX plans to send 12,000 satellites into orbit by 2025 as part of its Starlink project, and even up to 42,000 satellites in the following years. The goal is to create a fine-meshed network in space to provide high-speed internet access around the world, particularly in the most remote areas of the planet.

Currently, there are already more than 700 satellites in orbit in the Starlink fleet. According to the company, this should make it possible to launch the service in the United States and Canada by the end of 2020, and then expand service coverage to the rest of the world in 2021. According to an internal document published by the Wall Street Journal, SpaceX estimates that this project could generate $30 billion in revenue in 2025, and $10 billion is needed to deploy the constellation.

 

“Starlink is the right kind of business that we can go ahead and take public”

Gwynne Shotwell, SpaceX president

 

And these sums are attracting quite the competition. On 31 July 2020, Amazon announced that it would invest $10 billion to launch 3,236 satellites as part of its Kuiper project, and UK company OneWeb is planning a fleet of 5,260 satellites, 74 of which are already in orbit. Rumour has it that Apple may join the race, but Google is focusing more on stratospheric balloons. In total, there are at least 10 different projects  around the world, including official state programmes from the Russian and Chinese governments. Why the sudden boom? Thanks to satellite internet technology, these companies could become global operators, competing with every other internet service provider around the world.

In a tweet posted on 3 September, SpaceX announced that the first tests of its system showed “super low latency and download speeds greater than 100 mbps”. As a comparison, the average download speed in Switzerland in Q1 2019 was 89 Mbit/s across all technologies. Fibre optics (FTTH) can reach speeds of up to 375 Mbit/s, according to the nPerf report.

In developed markets, Starlink will have to compete with traditional providers that are busy launching fibre optics and 5G. In developing countries, where the majority of the 3.7 billion people without internet access live, it’s not clear if residents will be able to pay for this service for which there is no consumer apparatus available. Moreover, Starlink is already targeting customers with the deepest pockets. In May 2020, the US Army signed a three-year agreement with SpaceX to test its satellite network, which could be extremely useful in military operations.

While SpaceX isn’t expected to go public for years – Elon Musk always says that won’t happen until there are regular flights to Mars – its subsidiary Starlink could do so in the next few years. “Starlink is the right kind of business that we can go ahead and take public,” SpaceX President Gwynne Shotwell told investors in February 2020. The goal of such an IPO? To finance the conquest of Mars.

 
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