US poised to award $100B to SpaceX Starlink – will it help rural residents?

Telecompetitor reports…

The analysts estimate SpaceX’s total addressable U.S. market at full deployment at between 300,000 to 800,000 households, or less than 1% of the market.

It’s a particularly noteworthy number, considering that SpaceX is poised to receive nearly $900 million from the Rural Digital Opportunity Fund (RDOF) to cover some of the costs of bringing broadband to unserved rural areas. And considering that the total number of locations for which SpaceX was the winning RDOF bidder is 642,000.

Why do they have doubts?

MoffettNathanson’s estimate of SpaceX’s addressable market is based on several assumptions, which according to the researchers, are conservative. These include:

  • Although Starlink currently has about 1400 satellites deployed, the analysis is based on the nearly 12,000 satellites that the company expects to launch, approximately one third of which will cover the U.S.
  • Based on satellite inclines of 53 degrees, researchers estimate that only about 3% of Starlink’s satellites will be visible to U.S. customers at any given time.
  • According to SpaceX FCC filings, each satellite will have a capacity of 17-23 Gbps, but future developments could expand that. Therefore, the researchers assumed a doubling or tripling of per-satellite capacity.
  • The average broadband user consumes data at a constant rate of 2.2-2.7 Mbps during peak consumption hours, leading to researchers’ assumption that 4 Mbps of bandwidth per user would be needed to provide good quality of service today. The researchers forecast that requirement to increase to 10-18 Mbps per user in the next five years

One last factor…

SpaceX is charging customers $499 for a rooftop antenna, which according to news reports, cost the company $2,400, which suggests that the company is subsidizing each installation by nearly $2,000.

It seems like that $499 installation fee could increase at any time, which would make satellite much less affordable to deploy for the household. The authors also remind us that Starlink is in line to get $100 billion from the US government through an RDOF award.

This entry was posted in FCC, Policy, Rural, Satellite and tagged by Ann Treacy. Bookmark the permalink.

About Ann Treacy

Librarian who follows rural broadband in MN and good uses of new technology (blandinonbroadband.org), hosts a radio show on MN music (mostlyminnesota.com), supports people experiencing homelessness in Minnesota (elimstrongtowershelters.org) and helps with social justice issues through Women’s March MN.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s