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When was the last time monopoly was broken?

February 12, 2020

February 12, 2020

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When was the last time monopoly was broken?

Elon Musk’s satellite internet service has been given initial approval to operate in Australia. The approval is the first step for the American company to be able to offer its Starlink satellite network service to Australian users, which would create ripples in an otherwise monopolised market mainly dominated by New-Corps owned TV service Foxtel and government-owned NBN Co.

Elon Musk’s satellite internet service has been given initial approval to operate in Australia.

The approval is the first step for the American company to be able to offer its Starlink satellite network service to Australian users, which would create ripples in an otherwise monopolised market mainly dominated by New-Corps owned TV service Foxtel and government-owned NBN Co.

SpaceX was added to the Australian Communications and Media Authority’s (ACMA) “Foreign Space Object Determination” list on January 24.

This is an important foot in the door for SpaceX as it will allow the company to apply for licences to connect their satellites to ‘earth stations’ in Australia (so Australians can connect to their broadband services). 

Foxtel voiced concern as SpaceX would be allowed to use the same Ku frequency band that Foxtel operates in – thus interfering with their current satellite service. Foxtel wrote a letter to the ACMA addressing their concern.

“Given the potential catastrophic business impact of interference, the need to protect existing [geostationary orbit] systems from these new [non-geostationary orbit] constellations must be a priority for the Acma going forward.”

SpaceX didn’t seem to share the concern, stating they had the “flexibility to share that spectrum with other licensed satellite and terrestrial users”.

Starlink may be the beginning to a different landscape in the years to come. It depends on whether SpaceX will be able obtain further regulatory approval, and also on the quality of their service. Satellite internet services are often associated with low-quality internet. It’s an ambitious project that, once finished, will be an interconnected satellite mega-constellation of about 12,000 small satellites that should be able to offer speeds of up to 1 gigabit per second for users at ‘low cost’, according to a SpaceX statement from November

It’s still early days for Starlink however. SpaceX has launched only 240 Starlink broadband satellites so far with plans to launch 60 satellites every few weeks going forward. The project is anticipated to cost about $10 billion or more, according to an estimate by President and COO Gwynne Shotwell two years ago. Although, in May 2019, SpaceX CEO Elon Musk estimated that Starlink could bring in revenue of $30 billion a year.  

Customers would connect to Starlink using a satellite disk that Musk described as a ’UFO on a stick’ that just has to be plugged in and pointed towards the sky ‘with no training required’. 

It’s all about user convenience.

“This is very different business for SpaceX,” Gwynne Shotwell said, according to Space News. “It’s leveraging space technology, but it’s a consumer business.”

SpaceX’s venture into Australian airspace is the first step to what may become real disruption of this market, not just in Australia but also globally.

SpaceX aims for Starlink to have “near-global coverage of the populated world” by 2021 and to “deliver high speed broadband internet to locations where access has been unreliable, expensive, or completely unavailable”.

If the vision becomes reality, Musk will be positioned to have the largest number of broadband customers on Earth.

“I think exponential change is possible right now,” said David Hartshorn, CEO of Geeks Without Frontiers, a non-profit organisation.

No matter what the future will bring, this is an interesting direction that the American SpaceX is taking and its impact on the Australian monopolised market.

 

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