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Published on November 29th, 2024
Exploring Starlink’s Next Frontier in Connectivity
Starlink Direct to Cell: How It Works
•Starlink Direct to Cell does not rely on traditional cell towers. Instead, it leverages its satellites and ground-based infrastructure, such as gateway stations and Points of Presence (PoPs), to deliver internet and cellular connectivity.
•The system uses laser backhaul technology to connect satellites within the existing Starlink constellation. This allows even the earlier satellites to provide global services, subject to regulatory approvals, without depending on extensive ground infrastructure.
•Starlink satellites equipped with Direct to Cell capability feature an advanced eNodeB modem onboard, functioning like a cellphone tower in space. This technology enables seamless network integration, operating similarly to a standard roaming partner.
•Direct to Cell works with existing LTE phones wherever you can see the sky. No changes to hardware, firmware, or special apps are required, providing seamless access to text, voice, and data.
•Direct to Cell will provide Internet of Things (IoT) connectivity in areas beyond the reach of traditional ground-based infrastructure, such as cell towers and fiber-optic cables. This will enable millions of devices across vital global industries to connect.
Regulatory Milestones
The Federal Communications Commission granted SpaceX conditional approval on Nov. 26 2024 to use Starlink broadband satellites to keep T-Mobile smartphone users connected in cellular dead zones across the United States. SpaceX received permission to use T-Mobile’s cellular frequencies on up to 7,500 Gen2 Starlink satellites to provide Supplemental Coverage from Space (SCS), provided it does not interfere with other networks.
Global Deployment and Future Plans
SpaceX now has a sufficient number of satellites in Earth’s orbit to offer commercial services for its cellular Starlink system. However, full-scale deployment in the United States remains under review, with the FCC requiring broader licensing for complete operational approval.
Internationally, Starlink is working on regulatory clearances with various countries, as seen in partnerships with telecom operators such as T-Mobile (U.S.), Rogers (Canada), Optus (Australia), KDDI (Japan), and Salt (Switzerland) These collaborations aim to integrate Starlink’s Direct-to-Cell service into existing networks once approval is secured. The service is expected to initially support SMS messaging, with voice and data capabilities planned for a 2025 rollout, subject to regulatory progress.
Opportunities and Challenges for Telecommunications
•Opportunities
Starlink’s Direct to Cell service is a significant innovation that could pressure traditional telecoms to expand their rural coverage and improve service quality. However, it may complement rather than entirely replace traditional telecoms, particularly in urban markets where fiber and 5G are dominant.
•Challenges
Direct-to-Cell services also pose significant challenges to terrestrial telecom providers. While traditional companies focus on ground-based infrastructure like fiber and 5G, satellite operators are introducing disruptive models that could reduce the reliance on extensive terrestrial networks. This growing competition is likely to spark global regulatory battles and lobbying efforts.
Traditional telecom companies, with their strong relationships with regulators and governments, may leverage licensing, spectrum allocation, and local laws to slow Starlink’s expansion.
Regulatory and Competitive Dynamics
Tension between traditional telecom operators and satellite-based broadband providers like Starlink, OneWeb, and Amazon’s Kuiper is evident across various regions, driven by competition and regulatory challenges.
European Union
In the EU European telecom operators have voiced concerns about the allocation of spectrum for satellite internet services. They argue that LEO satellites like Starlink and OneWeb could interfere with terrestrial 5G services, which also rely on mid-band and high-frequency spectrums. The European Telecommunications Network Operators’ Association (ETNO), now known as Connect Europe, has lobbied for stricter rules on spectrum sharing and prioritization, aiming to protect investments in 5G infrastructure.
Italy
Italian telecom operators, represented by the industry group Asstel, view Starlink as a disruptive competitor and a potential threat to their business, with its entry into Italy causing noticeable friction.
United States
The T-Mobile and Starlink partnership raised alarm among rival telecom operators, who fear potential spectrum interference and market encroachment by satellite operators.
India
In India, Starlink faced regulatory pushback after pre-selling its services without the necessary licenses. The Department of Telecommunications (DoT) intervened, prompted by lobbying from the Cellular Operators Association of India (COAI). Local telecom operators argued for stricter licensing requirements, emphasizing that unregulated satellite services could undermine the domestic telecom industry.
Africa
Starlink’s rapid expansion of its satellite internet service across Africa over the past two years has elicited mixed reactions. With speeds significantly surpassing those of fixed broadband providers, an increasing number of consumers and businesses on the continent are eager to adopt the service. However, telecommunications companies and internet service providers who have invested heavily in local network infrastructure are apprehensive about Starlink and the formidable competition it represents.
Starlink faced delays in launching in South Africa due to government requirements to partner with a local entity and adhere to Black Economic Empowerment (BEE) rules. Telcos there have also voiced concerns about the competition it would bring to their rural broadband efforts. Telecommunication companies have used regulatory hurdles to slow Starlink’s entry into the market, citing concerns about data sovereignty and the potential for market disruption.
Brazil
In Brazil, Starlink’s partnerships to connect remote schools and the Amazon rainforest have created friction with local telecom providers. Brazilian telcos have lobbied for stricter satellite licensing processes, citing concerns over potential interference with local services and whether satellite operators comply with tax and regulatory obligations. Additionally, SpaceSail, a Chinese rival to Starlink, signed an agreement on November 20, 2024, to enter the Brazilian market, further intensifying competition.
Australia
In rural Australia, Starlink’s presence challenges Telstra’s dominance in providing remote connectivity, traditionally supported by government subsidies. Telstra has argued for subsidies to focus on terrestrial infrastructure, questioning the reliability and scalability of satellite services. Despite this, Australia’s two largest telecom operators have begun backing LEO satellite technologies, signaling a shift in the competitive landscape.
Starlink’s Potential Impact on Traditional Telecommunications
Starlink’s satellite-based service has the potential to disrupt traditional telecommunication companies, but whether it poses a direct threat depends on several factors.
Advantages of Starlink
- Global Coverage: Starlink’s satellite network provides near-global coverage, including areas where traditional telecoms lack infrastructure.
- Ease of Access: By aiming to connect directly to standard cell phones without additional hardware, Starlink could simplify user access and reduce reliance on terrestrial networks.
- Infrastructure Independence: Starlink’s satellite-based system bypasses the need for terrestrial infrastructure like cell towers and fiber optics, offering resilience in natural disasters and challenging geographies.
- Competitive Pricing: Starlink’s pricing model could undercut traditional telecom providers, making it an attractive alternative.
Challenges and Disadvantages
- Regulatory and Market Challenges: Traditional telecom providers, with their strong relationships with regulators and governments, may leverage these connections to create obstacles for Starlink. Licensing requirements, spectrum allocation processes, and compliance with local laws could delay its expansion. In regions where telecom providers hold monopolistic or oligopolistic control, they may also use their entrenched market positions and lobbying power to resist competition from satellite-based services.
- Environmental Concerns: Issues like light pollution and rocket emissions could lead to stricter regulations, potentially delaying satellite launches and increasing costs. Unlike satellite services, traditional telecom infrastructure (e.g., fiber optics and cell towers) does not face the same level of global scrutiny.
Conclusion: The Threat to Traditional Telecoms
Starlink’s success will depend on its ability to navigate regulatory challenges and adapt to competitive dynamics in diverse markets.
At the Satellite 2020 conference, Elon Musk estimated the global market for providing internet access to underserved areas could be worth $30 billion annually. Musk downplayed the threat to traditional telecoms, stating:
“Starlink is not some huge threat to telcos. I want to be super clear: it is not.”
However, as the author for Light Reading noted, “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” (Light Reading, source)
While Starlink, SpaceMobile, and similar services may target different geographies and customer bases, their ability to offer seamless, global connectivity challenges the traditional telecom model. This could carve away significant portions of the $30 billion market Musk envisioned in 2020, reshaping the competitive landscape and compelling telecoms to adapt or risk obsolescence.
*About the image used in this post: Learn more about OpenAI’s image generation tool: https://openai.com/dall-e
References
1.StarlinkBusiness Direct To Cell https://www.starlink.com/business/direct-to-cell
2.SpaceX gets conditional approval for direct-to-smartphone service https://spacenews.com/spacex-gets-conditional-approval-for-direct-to-smartphone-service/
3.SpaceX breaks turnaround record, launching Falcon 9 booster, B1080, twice in less than 2 weeks https://spaceflightnow.com/2024/11/24/live-coverage-spacex-to-launch-23-starlink-satellites-on-falcon-9-rocket-from-cape-canaveral-5/
4.SpaceX: Cellular Starlink Service Is Ready to Go https://www.pcmag.com/news/spacex-cellular-starlink-service-is-ready-to-go
5.Adios, dead zones: Starlink relays SMS in space for unmodified phones on Earth https://www.theregister.com/2024/01/12/starlinks_satellite_cellular/
6.SpaceX Receives FCC Approval for Starlink Direct-To-Cell Tests
7.Musk’s Starlink is ‘not some huge threat to telcos https://www.lightreading.com/services/musk-s-starlink-is-not-some-huge-threat-to-telcos-
8.Starlink ruffles some feathers in Italy’s telco industry https://www.teslarati.com/starlink-italy-telco-association/
9.AT&T and Verizon have a beef with T-Mobile’s Starlink satellite service https://www.theverge.com/2024/8/16/24221677/att-verizon-fcc-complaint-tmobile-spacex-starlink-satellite-service
10.SpaceX accuses European telcos of bullying https://www.telecoms.com/satellite/spacex-accuses-european-telcos-of-bullying
11.Connect Europe unveils “Europe’s Digital Choice”, an ambitious policy agenda for the new EU leadership https://connecteurope.org/news/connect-europe-unveils-europes-digital-choice-ambitious-policy-agenda-new-eu-leadership
12.Starlink is not a licensee, clarifies Department Telecommunications https://pib.gov.in/PressReleseDetail.aspx?PRID=1775425®=3&l
13.Starlink’s aggressive push in Africa keeps telcos on high alert https://african.business/2024/11/technology-information/starlinks-aggressive-push-in-africa-keeps-telcos-on-high-alert
14.Starlink black ownership plan in South Africa https://mybroadband.co.za/news/broadband/572641-starlink-black-ownership-plan-in-south-africa.html
15.Namibia Orders Starlink to Cease all Operations in the Country https://www.bnnbloomberg.ca/business/company-news/2024/11/28/namibia-orders-starlink-to-cease-all-operations-in-the-country/
16.Brazil seeks to break Starlink’s monopoly https://www.lemonde.fr/en/economy/article/2024/11/18/brazil-seeks-to-break-starlink-s-monopoly_6733222_19.html
17.Chinese rival to Starlink strikes deal to enter Brazil https://www.reuters.com/technology/space/chinas-starlink-rival-agrees-deal-enter-brazilian-market-2024-11-20
18.Optus joins Telstra in offering Starlink https://www.cyberdaily.au/tech/11278-optus-joins-telstra-in-offering-starlink