Caribbean countries have been eagerly awaiting the availability of Starlink services as it could offer alternatives to what is available locally. However, concerns have also been expressed that Starlink, the global satellite internet constellation project, could threaten existing telecoms markets. We discuss.
In recent years, the telecoms landscape has been undergoing a transformative shift with the emergence of innovative technologies. One such disruptor is Starlink, a satellite internet constellation project developed by SpaceX and led by Elon Musk. While Starlink has the capability of providing high-speed, reliable internet access to remote and underserved areas, its entry into local telecoms markets in the Caribbean region may be becoming contentious.
On the one hand, in countries that are still challenged to provide reliable telecommunications services to their entire population, especially those in remote communities that do not have adequate terrestrial infrastructure coverage, Starlink could offer an attractive, and even viable, alternative. Further, with the recent Starlink announcement that it intends to also provide satellite mobile/cellular service, it could become an additional player in mobile/cellular markets potentially disrupting the existing duopoly dynamic in many Caribbean countries.
That being said, some existing players are voicing concern. For example, at a recent event in the Bahamas, the CBL Group were of the view that Starlink “should be properly regulated as over time it will become more popular and affordable” (Source: The Tribune). It continued that the value of Starlink and other low Earth orbit satellite technology providers is in providing a cost-effective means of connecting hard-to-reach area areas where terrestrial internet fibre is not practical. It thus was advocating for transparent regulation of low Earth orbit satellite technology providers, which is not an area covered by the existing regulatory framework in the Bahamas.
Pros of Starlink
Without a doubt, there are several distinct benefits to be realised by the deployment of low Earth orbit satellite technology, such as Starlink. First, players in that space often have the aim of creating a global network of satellites that can deliver high-speed internet access to virtually any location on Earth. These satellite constellations can facilitate the bridging of the digital divide, and bring a broad range of opportunities to underserved populations that have historically struggled with limited or no internet connectivity.
Further, with Starlink’s promising low-latency, high-speed internet service, it could compete with or even outperform traditional broadband internet options, as reflected in the above-mentioned concern. It could thus be argued that Starlink could also invigorate Caribbean telecoms markets that have become increasingly static over the years.
Additionally, in being satellite-based, Starlink is resilient to terrestrial natural disasters or infrastructure failures and could serve as a reliable backup, ensuring continued connectivity even when local networks have been compromised.
Cons of Starlink
First, although Starlink offers a new option for high-speed internet, affordability may be a challenge. Currently, the cost of subscription and user equipment may be prohibitive for many Caribbean consumers, and particularly those in rural and remote areas, who may be unable to afford the service even if it is available.
Second, in being a global satellite operation, there may be an expectation that there will be minimal regulatory intervention. However, considering the possible impact of an entity such as Starlink on local telecoms markets, Caribbean regulators may wish to oversee their operations and ensure that they comply with local laws. However, ensuring compliance could be a challenge, especially if consumers are able to secure services directly from the provider without in-country service delivery being approved or appropriately licensed.
Finally, it would be remiss to not mention environmental concerns raised by the deployment of thousands of satellites for Starlink. Critics argue that the increased number of low Earth orbit satellites may contribute to light pollution and interfere with astronomical observations. Questions have also been raised about space debris and the long-term sustainability of such mega-constellations.
Potential regulatory impact
Across the Caribbean region, there has been some excitement about the availability of Starlink locally, with the hope and expectation that the previously outlined benefits would be realised. At the same time, regulators, in particular, need to be prepared to manage the disruption of current markets and competition dynamics, should this eventuate.
Should Starlink’s services become considerably cheaper than those offered by terrestrial players, established providers may struggle to compete with the high-speed, low-latency offerings of Starlink, possibly leading to a shift in market dynamics. The worst-case scenario would be that the delicate balance competition offers could be lost, and effectively result in another monopoly, or at best, a duopoly, which is currently the case in most countries across the region. However, the modus operandi of Caribbean telecoms players has been to exaggerate situations and their urgency to shape decisions in their favour, so caution and careful study are recommended before choosing a particular course of action.
It is also important to highlight that recent reports suggest that Starlink does not (yet) have the capacity to dominate the telecoms market in most countries. There is a limit to the number of simultaneous connections each satellite can support, and to some degree, that number is a function of the transmission speeds being offered. Hence, network performance could be less consistent than some terrestrial services.
Also, although Starlink has upgraded and substantially increased the number of satellites it intends to deploy, the environmental concerns are becoming more pronounced, which might be slowing down the rollout speed and its financing options. It may thus be a bit premature to decisively conclude what the likely impact of Starlink will be in the short and medium term.
In summary, although Starlink’s foray into local telecoms markets may have considerable promise for connecting the unconnected and revolutionising internet access in remote areas, it has several challenges that it will need to manage to have the disruptive impact envisaged. It also must be emphasised that the telecoms landscape across the region has been and will continue to evolve. Current and prospective players, including Starlink, will need to adapt to the changing framework and competitive dynamics that continue to emerge.
Image credit: Tony Webster (flickr)
Very good update on Starlink.
Probably for countries in the Caribbean, where there is reasonably excellent internet service networks nearly everywhere, this may take a long while to get established. Contrast with say Central Africa, where I was recently, internet networks are only available in major cities. Small towns and rural areas are almost completely not serviced by traditional terrestrial networks.
In this region, Starlink started in around September 2023. It’s very, very effective. Indeed the cost is a drawback. The equipment can only be ordered online ( a catch 22 ) and costs upwards of US$550 ( a high price tag for the population who need it ). They offer two plans: Fixed Location and Mobile. Fixed location only usable in cities. Mobile is excellent; strong connectivity and reaches virtually anywhere.
What isn’t well documented with Starlink is that their satellites actually bounce the signals back down to a local station near the user station. Starlink must partner with a local provider to actually get the user connection out to the Internet. Starlink has been testing their laser crosslinks, which enable one satellite to relay signals to another satellite, providing coverage where there isn’t a suitable ground station e.g. in the middle of the ocean or perhaps in locations where a local ground station is not present. For countries willing to negotiate with Starlink, there are definitely opportunities to do so – for the time being.