Telstra partners with Starlink-like OneWeb satellite internet service to compete with Elon Musk and Sky Muster

Telstra has partnered with a Starlink-like satellite internet service, paving the way for direct competition with Elon Musk’s company.

At a conference in Barcelona, ​​Telstra CEO Andrew Penn announced a memorandum of understanding with UK-based OneWeb to bring low Earth orbit (LEO) satellite internet service to Australia.

This is the first time that one of the established telecom operators has opted for LEOs, and it could lead to faster internet at lower prices for rural and regional areas that cannot access the fixed network.

LEO satellites are closer to the ground than geostationary satellites, which means signals have a shorter distance to travel, resulting in less lag (also known as latency) in communications.

A screenshot of an open source display showing the position of Starlink satellites (white dots) and coverage areas (green cells)(Provided: https://satellitemap.space/)

Starlink, owned by Elon Musk’s SpaceX company, launched a LEO service in Australia last year and stole customers from NBN’s Sky Muster, which uses geostationary satellites.

So, can Telstra compete with Starlink? And what does this mean for the future of Sky Muster?

Starlink shakes up the regional internet market

For years, people in areas without fiber and copper network access had to rely on fixed wireless (broadcast via cell phone towers) or satellite NBN, delivered by two Sky Muster satellites.

Service could be spotty, but there were no other options.

Then, in April 2021, Starlink activated coverage in parts of New South Wales and Victoria, then expanded to parts of Western Australia, South Australia, Tasmania and Queensland.

In Facebook groups normally reserved for commiseration over poor internet connections, users celebrate the arrival of a pre-ordered Starlink dish after months of waiting, happily post images of boxed Sky Muster gear and share screenshots of download speeds.

Starlink download speeds vary between 100 Mbps and 200 Mbps, while standard and premium Sky Muster services have peak download speeds of 25 mpbs and 50 Mbps respectively, along with much higher latency or signal lag.

An aerial view of a farm in the middle of the forest and the mountains
Tony Margaritis installed Starlink at this farm in Marraweeny, central Victoria, replacing an unreliable fixed wireless service.(Provided: Tony Margaritis)

Data technician Tony Margaritis recently installed Starlink on a friend’s houseboat at Lake Eildon in Victoria’s Central Highlands, where the 4G network is overloaded with every influx of holidaymakers.

“I had a companion who would wake up at 3 a.m. to download emails in the middle of the night,” Mr. Margaritis said.

Fast LEO satellite internet, he says, “brings the city to the farm in terms of communications.”

“Sky Muster has no use. It’s useless.”

However, Sky Muster is much cheaper, with Starlink customers paying $848 for the hardware, plus a running fee of $139 per month.

Sky Muster has no hardware fees and is advertised online at $34.95 per month for the most basic plan, or double that for the premium plan.

Sky Muster customers have their data capped, while Starlink includes unlimited data, including Netflix and other streaming platforms.

Sky Muster has been losing customers since September 2021

From September 2021 to February 2022, Sky Muster lost just under 2,000 customers, or around 1.7% of the total number.

It’s not much, but, given the context of increased competition, it could mark the beginning of a long decline.

Anecdotally, some of those Sky Muster customers went to Starlink, while others may have chosen fixed wireless, which is becoming more common as the mobile network grows.

Starlink declined to share details on the number of customers in Australia.

Submissions to a recent independent national review included extensive criticism of Sky Muster’s late connections, strict data limits, and issues with streaming, video conferencing, and voice calls.

But Gavin Williams, director of development for regional and remote areas at NBN Co, defended the product.

“I think Sky Muster has really proven itself delivering fast, reliable broadband to the most remote parts of our incredibly large landmass,” he said.

He added that some Australians in the region use internet services that do not meet their needs – and that there are better options.

“The regional telecommunications report shows quite clearly that misinformation…is rampant when it comes to bush broadband,” he said.

He said the independent regional technology hub has advice on which Internet service is best suited for different areas and NBN Co was investing $200 million a year in fixed wireless and satellite upgrades and improving Sky Muster, including the development of Sky Muster More.

“We will continue to really leverage all capabilities,” he said.

Sky Muster not good enough: Telstra

A Telstra payphone in a distant setting with trees and grass
According to Telstra, satellites in low Earth orbit will bring fast internet access to remote parts of Australia.(Getty: Bloomberg)

But Telstra says Sky Muster is so bad it won’t direct customers to the service.

“We have not referred any customers to the NBN Sky Muster service,” Telstra general counsel Lyndall Stoyles told the ABC.

Last week’s announcement of a partnership with OneWeb suggests that Telstra is looking to LEOs for the future of satellite internet, not Sky Muster.

OneWeb, part-owned by the UK government, is years behind Starlink in building a global LEO satellite internet service.

It has launched two-thirds of a planned constellation of 648 satellites and expects to sell internet services worldwide later this year.

Starlink launched more than 2,000 satellites and activated its service in the United States about 18 months ago.

A satellite dish on a tin roof surrounded by trees
Starlink dishes are installed on the roofs of farms across the country.(Provided: Tony Margaritis)

Jeff Bezos is also getting into the internet space game, Amazon-owned Kuiper, planning to launch its first LEO satellites later this year.

Mr. Penn did not say when OneWeb might be available in Australia.

“We see many opportunities for our consumer, small business and enterprise customers using LEO satellite connectivity…from [internet of things] to emergency services support, from home broadband to agritech support,” he said.

What future for Sky Muster?

NBN Co “knows it has a problem,” says independent telecommunications analyst Paul Budde.

“So far it’s clear that Starlink is superior to Sky Muster,” Budde said.

The Sky Muster satellites, which cost around $500 million each, are about a third of their estimated 15-year lifespan.

They could be obsolete long before they are retired, he said.

“If Musk proves capable of doing LEO satellite internet, then Sky Muster’s future looks very shaky to me.

The government will would have set aside millions in the upcoming budget to upgrade the NBN network to fight Starlink.

Mr Williams said NBN Co would look at “developing and emerging technologies” over the next 10 years, before the planned retirement of satellites, and did not rule out an NBN LEO internet service.

“We will make decisions based on what is available at the time to do the best job for people in the most remote parts of our country.”

About Hannah Schaeffer

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