LEO satellite service pricing still uncertain, conference hears

While much of the conversation about rural broadband in Canada has recently centered on low-earth orbit (LEO) satellites, the business is a very expensive one, with huge capital costs and — depending on the business model of a given company — big subsidies, according to the panellists at a Friday session of the 2020 online edition of the Canada’s Rural and Remote Broadband Conference. Space Exploration Technologies Corp.'s Starlink system is meant to focus on direct to consumer service, but the starting costs come with a more-than $500 price tag for the consumer, panellists said. SpaceX vice-president of satellite government affairs Patricia Cooper told a Parliamentary committee earlier this month that during SpaceX’s beta period, broadband service would cost $129 per month with no contracts or data caps, plus a one-time $649 fee for an array of equipment, including a receiver dish. The phased array antenna kits "are one of the enabling features of LEO broadband direct to the home, but they are heavily subsidised right now. There's no way that that Starlink panel is making money at 500 bucks a panel. That's a loss lead for them, to try to get you onto the service and hopefully not move," president of Satellite Canada Innovation Network Ryan Anderson said on the conference panel. CEO of Galaxy Broadband Communications Rick Hodgkinson agreed, saying "whether or not the world is going to be full of individuals locking onto the Starlink service, and the dollars are going to be there to make it work? I'm a little skeptical as to the consumer play." "I'm very bullish on the backhaul play," Hodgkinson added, referring to the model used by Telesat Holdings Inc., where its LEOS constellation will provide backhaul connectivity, whose capacity it will then sell to internet service providers, rather than directly to the consumer like Starlink envisions. Telesat's vice-president of sales Michele Beck said that her company "has always focused on serving enterprise markets -- we don't do direct to consumer, directly. And so we take a very holistic approach, a community based approach to connecting Canadians by operating our LEO constellation." Both Telesat and SpaceX told the House of Commons industry committee earlier this month that they were prepared to deliver broadband connectivity to remote and rural areas of Canada seven years ahead of the government’s 2030 target date, though neither made specific promises about the affordability of the broadband services they’ll provide. Telesat is also pitching the government on a plan to privately auction off part of the 3800 MHz spectrum in return for investing in LEOS, and last week announced it was taking the company public after finalizing a $600 million agreement with the federal government as part of the latter's Universal Broadband Fund roll out.

LEO satellite service pricing still uncertain, conference hears

Brief | November 30, 2020

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LEO satellite service pricing still uncertain, conference hears

Brief | November 30, 2020

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