SpaceX wants to bring fast satellite broadband internet to the world – and in particular, to internet users in remote and rural locations, where download speeds are low and prices are high.
One of the first places in America to obtain the SpaceX Starlink service was Alaska, the state with the lowest population density in the country – just one person per square kilometer. The company then extended the service to Canada (population density: three people per square mile), followed last month by the service in the UK – a huge leap in concentration, with 650 people per square mile. (Even in the UK, there are many isolated places where Internet service is expensive, slow – or both).
The constellation of satellites scattered across the SpaceX globe should be able to provide 100 megabits per second internet service for anywhere until the end of the year. You can expect that many countries, no matter how urbanized (or not), will line up to sign up for the Starlink service. And the more countries Starlink signs up as customers, the better the outlook for the promised SpaceX subsidiary IPO.
A country that definitely does no want Starlink, however, is Russia.
Image source: Getty Images.
Just say “nyet” for fast internet
As ArsTechnica.com reported last month, the Russian State Duma (“Congress” of Russia) is currently considering legislation to impose fines on any individual or company that signs up for Starlink – or, in fact, for any internet system via satellite operated by foreigners, OneWeb or Kuiper Project included. According to ArsTechnica, the Russian Duma can fine individual Starlink customers up to $ 405 for using the satellite Internet service and fine corporate users up to $ 13,500.
What does Russia have against the cheap, fast and reliable space Internet? On the one hand, Russian security services object that the Internet operated by a foreign satellite network would be immune to surveillance under the legislation of the Russian System of Operational Research Measures (“SORM”). On the other hand, they suspect that Starlink is part of a conspiracy by the US government to deploy “predatory, intelligent, powerful, high-tech … shock and awe … to advance, above all, [American] military interests. “
Yes seriously.
However, there also appears to be an economic motivation for this ban on Starlink and other satellite networks. As Ars points out, “Russia is planning its own satellite Internet constellation, known as the ‘Sphere’.” And in contrast to SpaceX’s Starlink, which is a privately funded and built communications system, the constellation of 600 Sphere satellites will be a project built and administered by the Russian state under the auspices of its space agency Roscosmos. And that can be a problem.
It is rumored that Sphere cost $ 20 billion to build, may not start launching until 2024 and will not be completed until 2030. Given the amount of investment required, the Russian government certainly does not want to pay for the Sphere project alone to discover, three years from now, that all potential Sphere customers have already signed up for Starlink – and that Sphere will never recover their investment.
This problem will go away, however, if Russia takes the simple step of banning competitors from its market.
What does this mean for SpaceX
That would be a shame for rural Internet users in Russia. After all, Russia is the ideal market for an internet system with a light infrastructure like Starlink. Spanning 11 of the 24 time zones in the world, Russia has the largest land span of any country on the planet. And yet, Russia’s population of 146.7 million is nowhere near filling that space.
Despite intense urbanization in its western parts, 1 in 4 Russians still live in the countryside, making the country more rural than even the USA, for example, where only 1 in 6 people live outside urban areas.
As Elon Musk, CEO of SpaceX, pointed out, Starlink’s main objective will be “to serve the most difficult customer to serve”. That is, in fact, why one of the first things the company did after creating Starlink was to enroll in a program run by the FCC to subsidize the provision of broadband Internet access in underserved rural areas of America. (Another reason, of course, was the $ 886 million in federal funds that SpaceX could collect to provide the service.)
In Russia, SpaceX will now be banned from serving these rural customers. But everything is fine. According to the World Economic Forum, only about 55% of the 7.8 billion people in the world have access to the internet, which means that even outside Russia, there are still around 3.35 billion potential customers for the Starlink market.
This gives Starlink plenty of room to grow before its IPO, with or without Russia.