While governments are paying billions to connect regions to high-speed internet, US billionaire Elon Musk’s satellite service Starlink promises to do the same for a fraction of the cost. Should the Canadian Internet fear this revolution coming from space?
Starlink, like SpaceX and Tesla for that matter, presents itself in any case as a breakthrough technology, which targets an industry that is trampling. The provider wants to globalize the distribution of Internet access by launching thousands of satellites into low orbit, all relaying the same signal.
Elon Musk, the big boss of the three companies, is not on his first and ambitious mission to upset a sector deemed too big to stumble. Talk to the automakers…
Musk isn’t alone either. Amazon, with its Kuiper project, has the same ambitions. More modestly, the Ottawa company Telesat also hopes to offer satellite Internet access in the next few years, even if its own target market is the business-to-business (B2B) market.
That said, the Internet is still considered to this day by governments as a telecommunications tool and therefore meets the rules established in this regard. In Canada, this basically means that an Internet service provider should have its head office in Canada.
Starlink Canada
Starlink, based in Los Angeles, therefore created Starlink Canada, which received the green light from the federal government in the fall of 2020 to deploy its service in the Canadian firmament. Its first Canadian customers started receiving a signal late last summer. The installation cost is $649 for the antenna, plus shipping. The monthly payment is $129 thereafter, with no monthly data consumption quota.
The sending and receiving speed varies from 15 to 150 megabits / second, which, in principle, is enough to watch simultaneously up to six video streams in ultra-high definition (UHD, also called 4K).
The American company is currently limiting itself to targeting the more northern regions of the country and those that are poorly served by the major Canadian suppliers: Bell, Rogers, Quebecor, etc. But Starlink’s ambition lies elsewhere, given that its self-proclaimed goal is to be able to deliver an internet signal to the entire world’s population as soon as possible.
Starlink’s first Canadian customers initially experienced frequent outages, speeds that did not always live up to promises, and disappointing quality of service. But just before the holidays, Canadian customers proclaimed their immense satisfaction with their Internet service provider. “It’s crazy how good it is,” summed up one of them at the Toronto Star.
Is this Internet user confined to a chalet north of the Georgian Bay telling the truth, or is his judgment tainted by this boundless admiration that millions of people have for Elon Musk?
Without comparison
Because obviously, for the Internet by satellite to be so good, the point of comparison must itself not be so good. Or maybe it’s overpriced. And until the impact of Ottawa’s investment of the promised $1.4 billion to connect the whole country to high speed (by 2030) is felt, new providers like Starlink may well game to carve out a prominent place in the rural Internet.
Current regional providers are, for the most part, limited to a fraction of the speed promised by their American rival or the service is prohibitively expensive. One of the reasons is simple: the government last year provoked an increase in the prices charged by wholesalers — Bell, Rogers and Quebecor, again — to small independent suppliers.
The other reason: the big suppliers shun the more remote and less profitable regions and expect governments to pay for this expansion of their own network in their place.
These corners of the country are therefore fertile ground for Starlink, since it cannot, for the moment, compete with the high-speed service offered in the more populated regions of Canada, explains Desjardins Securities analyst Jérôme Dubreuil, who is interested in the Canadian telecommunications sector.
“Falling satellite launch costs greatly improve the business model [de sociétés comme Starlink] “, he wrote last year. At the beginning of January, he reiterated this analysis at the Duty. “The throughput promised by low-orbit satellites is significantly higher than that of geostationary satellites. But will these companies be able to compete with Canadian suppliers? It is permissible to doubt it. »
Mr. Dubreuil, like other industry analysts who preferred to remain anonymous, believes that Starlink will remain a marginal player in Canada in the short term, precisely confined to remote areas. The Canadian telecommunications giants see the situation in the same light, and that explains why the arrival of this rival from space does not worry them at all.
Longer term ? The bets are open. After all, automakers were saying the same thing about Tesla just five years ago. From Ford to Mercedes-Benz, it didn’t bother anyone to see the arrival of electric cars intended for a marginal market, because considered – wrongly – as underperforming and overpriced.
The near-dithyrambic praise from Starlink’s first customers in Canada can be dismissed out of hand for the moment if we imagine that they are the result of what could be called the Musk effect. But it wouldn’t be the first time the entrepreneur has been relegated to the role of underdog… only to turn the situation around to his advantage.
And this time, he has the Canadian Internet in his sights. What will people say about Starlink in five years?