Canadian LEOs challenge SpaceX’s offering, Gov. subsidy

Players in the low-earth orbit satellite (LEOs) space are casting doubt on Space Exploration Technologies Corp. (SpaceX) ability to perform in the Canadian market three days after the government announced that it would spend more than $1 million from the Universal Broadband Fund's Rapid Response Stream to connect up to 1,162 homes in rural Manitoba through the Starlink brand. Responding to an audience question about the entrance of foreign LEOs into the market and its impact on Canadian providers at an afternoon panel during the Canadian chapter of the International Institute of Communications' annual conference, Telesat Corp.'s senior vice president of Canadian sales Michèle Beck said that Starlink's offer was fundamentally different than Telesat's. Telesat's satellite design is "a lot more advanced" and is geared toward an "enterprise-level" service offering, compared with Starlink's consumer-based offering. "They may be evolving their offering into more of an enterprise-grade down the road, but they're not there yet. It's mail order, and there is no support. If your terminal breaks, you're done. They don't repair it, you have to order another one," Beck said, adding that if Starlink equipment is on backorder, connectivity delays could increase. Telesat, on the other hand, seeks to sell wholesale backhaul to other internet service providers. Xplornet Communications Inc.'s chief legal and regulatory officer C.J. Prudham said that in the rural areas where Xplornet and Starlink compete directly, customer service is a major difference between the two companies. Xplornet customer service workers "understand when you say 'no, but there's four feet of snow on my dish.' As opposed to the Starlink person who may go 'what do you mean there's snow?'" Prudham said. The Canadian Communication System Alliance's Jay Thomson asked specifically about the use of Canadian taxpayer dollars to help a U.S.-based provider compete with Canadian companies. Prudham said that Xplornet has no problem with competitive processes for awarding funding, but did take issue with the decision to give money to Starlink. "What are you getting for the money?" she asked rhetorically. “When money is awarded through programs typically in Canada, you know what you're getting," she said, adding that most programs have standards and delivery targets. "I haven't seen these contracts, but I think we have to ask some hard questions about what exactly is this extra money that's being given to Starlink for?" Telesat's Beck said, on the other hand, that it is possible the investment is worth it. "If it goes to subsidizing in part the one-time , and helps to subsidize some of the recurring to make it more affordable and more in line with southern-based rates that consumers would pay in urban areas, so be it," Beck said. Telesat itself was the recipient of a larger amount of government money in 2020, some $600 million. Still, Prudham said that the government's announcement did not articulate what additional capacity the investment would add to Canadian connectivity. – Reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca.

Canadian LEOs challenge SpaceX’s offering, Gov. subsidy

News | May 16, 2022

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