SpaceX's Starlink: Overhyped and underpowered to meet broadband needs of Rural America, say analysts

As the constellation stands anyway


SpaceX's Starlink has been described as the solution to dismal rural broadband. Like any project linked to Elon Musk, the satellite internet constellation is surrounded by a thick cloud of hype. But is it justified?

Analyst house MoffetNathanson isn't sure. A new report published earlier this week expressed doubts about Starlink's ability to cover the US market in its current form, citing the bandwidth concerns and end-user consumption rates.

The outfit suggested Starlink's total addressable market, based on the company reaching its lofty goals to deploy 12,000 satellites, hovers between just 300,000 and 800,000 households.

Part of the problem, MoffetNathanson claimed, is that there aren't enough satellites, and they aren't pointing in the right direction. With around a third of Starlink's satellites earmarked for the US (roughly 4,000), each at an incline of 53 degrees, the analysts reckon just 3 per cent of the total available capacity will be visible to the Southern US at any point.

And then there's consumption. During peak hours, the average US household uses 2.2 to 2.7Mbps of bandwidth. That's likely to increase in the coming years, based on the growth of remote working and rise of 4K video. By contrast, each SpaceX satellite, based on current specifications, has a capacity of 17-23Gbps.

Combined, these factors limit SpaceX's ability to deploy a proper, nationwide broadband service. Of course, one could always argue that Starlink was never really a mass-market product.

Although Starlink handily cleans the floor when faced with conventional ADSL and dial-up connections, it's not cheap. Customers pay a $499 setup fee for the receiver dish, which costs SpaceX $1,300 to manufacture. The ongoing $99 monthly subscription fee will deter some in rural areas, too.

Although federal subsidies will make the product more widely accessible, SpaceX has faced opposition on this front, with the CEO of the Fiber Broadband Association, Gary Bolton, arguing that the product is an inefficient use of resources.

"As a matter of fact, a LEO [satellite] falls out of the sky in five years," Bolton told a telecom news site. "There is never a circumstance where satellite (LEO or geostationary) [broadband] should be subsidized with taxpayer dollars."

But don't count SpaceX out just yet. In 2019, the firm requested authorisation from the International Telecommunication Union (ITU) to obtain enough spectrum to deploy 30,000 satellites – a more than doubling of its current planned constellation.

Just yesterday, it hefted a payload of 60 Starlink satellites on a Falcon 9 that lifted off from Space Launch Complex 40 at Cape Canaveral Space Force Station at at 12:34 Eastern (16:34 UTC). Musk's space firm currently has 1,200 Starlink satellites in orbit.

Additionally, future launches will operate at a lower orbit, extending coverage further. And the company is experimenting with laser-based internet working between satellites, which, if used widely, should increase the maximum possible capacity. ®

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