[HN Gopher] Google and AT&T invest in Starlink rival for satelli...
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Google and AT&T invest in Starlink rival for satellite-to-
smartphone service
Author : LinuxBender
Score : 83 points
Date : 2024-01-22 19:05 UTC (3 hours ago)
(HTM) web link (arstechnica.com)
(TXT) w3m dump (arstechnica.com)
| up2isomorphism wrote:
| When company lost 50% of its market cap in the recent decades
| while being central to mobile/cloud and every other
| opportunities, when I saw the word AT&T in some thing, I don't
| feel any confidence that it will become anything useful.
| alberth wrote:
| That's a bit deceiving because a good portion of AT&T valuation
| came from them acquiring DirectTV and TimeWarner to create a
| unified TV streaming experience, but they have since divested
| those assets.
|
| Said differently, AT&T is not the same company it was 10-years
| ago. They actually do _less_ things now than they did in the
| past.
| SeanAnderson wrote:
| How can any company be considered a competitor to Starlink while
| relying on SpaceX to get into LEO?
|
| If you're relying on your competitor to enable your business
| model then you're not competing with them.
|
| > In March 2022, AST SpaceMobile announced a multi-launch
| contract with SpaceX to launch its first BlueBird operational
| satellite.[35][36] AST SpaceMobile states that it will be able to
| produce up to six BlueBird satellites per month at two
| manufacturing sites in Midland, Texas.[37][38] The company has
| attributed delays in the deployment schedule of its operational
| satellites to supply chain issues and price increases.[39] In
| March 2023, AST SpaceMobile stated that it expects to launch the
| first five Block 1 BlueBird satellites in early 2024.[40]
|
| https://en.wikipedia.org/wiki/AST_SpaceMobile#Deployment
|
| AST SpaceMobile does not seem like they are operating a viable
| business model. They have been publicly traded for several years
| and the market seems to agree.
| jimkoen wrote:
| > How can any company be considered a competitor to Starlink
| while relying on SpaceX to get into LEO?
|
| Because SpaceX is subject to the same antitrust measures as any
| other company.
| adventured wrote:
| And it's a fair bet that SpaceX won't be the only option for
| putting something like Starlink into orbit over time, so
| SpaceX might as well take their money and keep it from
| funding other launch competitors (whether they eventually use
| Blue Origin & Co, or China, or Arianespace / EU).
| kiba wrote:
| _How can any company be considered a competitor to Starlink
| while relying on SpaceX to get into LEO?_
|
| As opposed to the alternative of not using SpaceX?
|
| If they aren't using SpaceX to launch their satellites, it's
| their loss.
| SeanAnderson wrote:
| Starlink has this market cornered until another company
| develops sufficiently reusable rockets.
|
| If AST SpaceMobile's bet is to try and work out the kinks in
| their hardware while waiting for an alternative launch
| provider to come online then OK, I can't fault that mindset.
|
| IMO, if they get anywhere close to being competition then
| SpaceX will just change the contract terms going forward to
| neuter their viability.
|
| And why go public so early? AST SpaceMobile has been public
| for 5 years and is getting destroyed by the market. They just
| sold off majority ownership of their satellite manufacturing
| capabilities.
|
| Doesn't their strategy just invite pressure to monetize early
| at the cost of being able to experiment with R&D?
| kiba wrote:
| _Starlink has this market cornered until another company
| develops sufficiently reusable rockets._
|
| That's inaccurate. SpaceX developed Starlink to take
| advantage of their growing launch capabilities.Other
| companies could launch on SpaceX's rocket, but not to the
| scale of Starlink.
|
| _Doesn 't their strategy just invite pressure to monetize
| early at the cost of being able to experiment with R&D?_
|
| You have other competitors who also have a lot of money.
| AnthonyMouse wrote:
| > IMO, if they get anywhere close to being competition then
| SpaceX will just change the contract terms going forward to
| neuter their viability.
|
| If they were going to do this then why would they wait?
|
| They don't need to. The launch contract is where the profit
| is. Starlink is already competing with AT&T's ground
| network and has to maintain competitive pricing there
| regardless of whether there is a competing satellite
| network.
|
| AT&T benefits because they can stop maintaining ground
| infrastructure in rural locations and still compete for
| customers who care about it, and expand coverage to other
| countries, much of which will come at the expense of local
| carriers in those countries rather than Starlink.
|
| Starlink themselves might lose a few customers to AT&T but
| not as much as the profit on the launch contract, so why do
| they want to stop it?
| SeanAnderson wrote:
| Starlink revenue in 2022 is reported to be $1.4B and
| SpaceX is $4.6B. SpaceX did 61 launches in 2022, or $75M
| per launch. Elon's on record saying it costs ~$65M to
| launch a rocket. So, assuming there wasn't another
| interested buyer, SpaceX is making about $10M allowing
| AST SpaceMobile to launch, but there's (potentially) a
| billion at stake if Starlink competition arises. I
| realize I'm mixing revenue and profits a bit. Just trying
| to ballpark some numbers.
|
| A year ago I would've agreed with you, but Starlink's
| revenue is up 600% YoY. There's enough money in Starlink
| for SpaceX to not risk it.
|
| I don't know why they allow it. Perhaps a sign of good
| faith to keep regulators off their backs?
| AnthonyMouse wrote:
| > SpaceX is making about $10M allowing AST SpaceMobile to
| launch
|
| $10M _per launch_. By comparison, Starlink has had over
| 100 launches:
|
| https://en.wikipedia.org/wiki/List_of_Starlink_and_Starsh
| iel...
|
| AT&T doing the same number of launches would generate
| over $1B in _profit_.
|
| And again, Starlink is already competing with land-based
| cellular networks, and so would AT&T. So the bulk of the
| AT&T satellite customers could come at the expense of
| other land-based cellular networks rather than Starlink
| -- Starlink has ~2M users compared to >140M for Verizon
| Wireless (much less carriers in other countries), so who
| are they really competing with?
| kiba wrote:
| The price is nominally 67 million to launch in 2022.[1]
|
| _A year ago I would 've agreed with you, but Starlink's
| revenue is up 600% YoY. There's enough money in Starlink
| for SpaceX to not risk it._
|
| The problem of using a purely profit oriented analysis is
| that you missed major pieces of the puzzle. Antitrust
| action would be one reason that you neglected. Another
| reason is SpaceX's mission, which is the colonization of
| Mars. To do that, SpaceX need to help bootstrap an entire
| space economy from scratch to make colonization more than
| a pipe dream.
|
| 1. https://www.cnbc.com/2022/03/23/spacex-raises-prices-
| for-lau...
| lxgr wrote:
| > expand coverage to other countries, much of which will
| come at the expense of local carriers in those countries
|
| This would require AT&T to acquire local spectrum, since
| they (to my knowledge) don't any global spectrum.
|
| And at that point, it seems to make much more sense for a
| local carrier to partner with AST instead, since they'd
| be able to serve almost everybody using their existing
| terrestrial coverage and would need to use the satellites
| only to fill in the gaps.
|
| > Starlink themselves might lose a few customers to AT&T
| but not as much as the profit on the launch contract, so
| why do they want to stop it?
|
| Theoretically they could try to keep competing satellite
| operators out of the direct-to-cell market for as long as
| possible. Being able to set the price for that for all
| operators in a country as the only seller sounds
| extremely beneficial in the short term.
|
| But that would inevitably attract both space launch
| competitors and antitrust regulators around the globe,
| which might ultimately be worse for SpaceX.
| laluser wrote:
| This is similar to Netflix running on AWS and Amazon being a
| direct competitor. It could work.
| SeanAnderson wrote:
| Okay, I see your point, but the scenario here is the inverse
| of Netflix/AWS, right?
|
| Netflix takes the world by storm, grows quickly, and becomes
| reliant on AWS. Amazon enters the video streaming market as a
| much weaker competitor and builds upon their own tooling.
|
| In this scenario, I presume Amazon is making more money from
| Netflix using their service than they are from running their
| own streaming service. Their first goal is to not disrupt the
| money they make from Netflix and their second goal is to
| create a competitor. Later, if the math says that hardening
| their contracts to the detriment of Netflix would allow them
| to capture such market share as to recoup the investment with
| their own streaming service, they would do so, but as they're
| late to the party that is not the case.
|
| In the Starlink scenario, it's the other way around. Starlink
| is already dominating the market using their own, SpaceX
| tooling. The incumbent, AST SpaceMobile, is allowed to use
| SpaceX rockets. It's not hard for SpaceX to disrupt AST
| SpaceMobile's operations without hurting SpaceX's bottom line
| as there's a backlog of launch demand to replace AST
| SpaceMobile. If the math says that AST SpaceMobile is likely
| to begin encroaching on Starlink then they deny a contract,
| replace it with the next person in line, and don't bat an
| eye.
|
| The order in which things occurred between the companies
| means there aren't these deeply entangled, mutual benefits
| that allow competitors to coexist.
| ethbr1 wrote:
| > _If the math says that AST SpaceMobile is likely to begin
| encroaching on Starlink then they deny a contract, replace
| it with the next person in line, and don 't bat an eye._
|
| This is where the Netflix/AWS analogy is a good one.
|
| The critical point is: AWS makes more money from people
| not-Netflix than Amazon Video makes.
|
| Consequently, AWS screwing with Netflix for the benefit of
| Amazon Video risks the entire not-Netflix AWS customer
| base, who would no longer consider Amazon as neutral of a
| party and thus trim their AWS spend.
|
| And these optics last for decades.
|
| Which is why most companies in these scenarios have serious
| firewalls between those parts of the conglomerate. No sense
| killing the golden goose because some VP wants a bonus.
|
| If AST (or Amazon Video in the analogy) can compete with
| Starlink (or Netflix) on even terms, then more power to
| them. If not? Then that's their problem: rest of the
| company isn't going to bail them out.
| pfannkuchen wrote:
| That does smell anticompetitive though, which SpaceX may
| strategically want to avoid. They could in the future end
| up being seen as a monopoly in several different areas.
| manuelabeledo wrote:
| > If you're relying on your competitor to enable your business
| model then you're not competing with them.
|
| Brave relies on Google. DuckDuckGo relies on other search
| engines, etc. And they are in the same market.
|
| Orbital launch systems and satellites are not in the same
| market. SpaceX would do themselves a disservice if they weren't
| willing to launch anything other than their own satellites.
| thedangler wrote:
| Because they can take the profits from the launch towards
| launching more Starlinks.... I see this as an absolute win.
| g-b-r wrote:
| It would be interesting if some of these launches happened
| to have an accident xD
| whynotminot wrote:
| Spotify competes fine with Apple Music on iOS (even if they're
| not thrilled about it).
| akira2501 wrote:
| > If you're relying on your competitor to enable your business
| model then you're not competing with them.
|
| They're not though, they're using a contracted service from a
| company that wholly owns a subsidiary that may have some
| competing business with your system.
|
| They can switch to any other capable provider at any time and
| once the satellites are in orbit, there's no continuing
| business relationship with the launch company required to
| operate them.
| dkasper wrote:
| Are there any other capable providers that are in the same
| ballpark in terms of cost?
| akira2501 wrote:
| That's close to the right question. I'd suggest "are there
| about to be any other capable providers in the same
| ballpark?" In which case, probably, in Ariane 6.
|
| Outside of the US and EU governments this has not been a
| large market. The fact that another launch client is
| entering the space should suggest what the overall
| trajectory here is going to be.
|
| Finally, with a lifetime of 5 to 10 years for each launched
| satellite, and SpaceX not being required for operation of
| the satellites, I'd suggest they're not nearly as dependent
| on a "competitor" as the OP implies.
| eagerpace wrote:
| Not yet, but there will/should be in the near future. And
| that's how most businesses work. Have to make some
| assumptions and calculated risk.
| chrisjc wrote:
| The points about antitrust and similar situations like
| Netflix/Amazon have already been made by others...
|
| So it's interesting to note that other Satellite Internet
| companies/startups/etc are already using SpaceX to put their
| gear into orbit including Amazon (Project Kuiper?) and OneWeb.
|
| But you're probably right in that anyone doing so, should
| consider the theoretical risk. However, a lot of what SpaceX is
| trying to achieve revolves around reducing the cost to lift
| mass into orbit. So theoretically, the more demand there is to
| put mass into orbit and the more SpaceX does it, the cheaper
| and easier it becomes.
|
| Then again maybe Google or ATT could avoid this risk by just
| starting their own LEO freight companies? ;P
|
| But seriously, if it is such a concern, perhaps they should
| look into funding a potential SpaceX competitor. And there are
| a few startups trying to be just that.
| AshamedCaptain wrote:
| You make it sound as if the rocket science here is more
| critical than the chip science, or whatever. But it isn't
| really proven true.
|
| AST also seems to be favoring a different strategy, having a
| smaller number of satellites each capable of serving a larger
| number of users vs Starlink's thousands of satellites serving a
| couple of users each. IMHO AST's approach sounds more sensible
| and manageable (albeit both approaches manage to equally annoy
| astronomers). Whether they will be able to really serve a large
| enough number of users or not also depends on the chip science
| (rather than the rocket one).
| zachmu wrote:
| Even if Starlink's approach isn't a proven advantage yet, a
| competitor's ability to deploy new tech at will, at cost,
| when you are at their mercy to do so on their schedule and at
| their price, is not a great signal
| sangnoir wrote:
| > If you're relying on your competitor to enable your business
| model then you're not competing with them.
|
| This is not true, and there are multitudes of counter-example:
| store-brand goods sharing shelves with competitors, EVs
| delivered by ICE vehicles, AoL CDs being sent by mail, etc.
| dmoy wrote:
| Or more pointedly for phone service - the entire existence of
| MVNO carriers (though less extreme than the space launch
| area, where SpaceX is so much cheaper).
| TMWNN wrote:
| >If you're relying on your competitor to enable your business
| model then you're not competing with them.
|
| The 6502 was one of the two dominant 8-bit computer CPUs ...
| and was manufactured by Commodore, which was happy to sell CPUs
| to Apple, Atari, Acorn, and anyone else.
|
| Specifically in telecom, in the US there are many MVNOs that
| resell mobile phone service from the big three carriers.
| Somehow both the MVNOs and the national carriers make money.
| arcticbull wrote:
| > How can any company be considered a competitor to Starlink
| while relying on SpaceX to get into LEO?
|
| They're competing with Starlink not in the launch market. How
| the satellite gets into LEO is a different thing - and its own
| global market.
|
| [edit] There's many ways into space. [1]
|
| [1]
| https://en.wikipedia.org/wiki/List_of_launch_service_provide...
| SeanAnderson wrote:
| https://en.wikipedia.org/wiki/Space_launch_market_competitio.
| ..
|
| If you only consider US-allied launches, SpaceX represents a
| staggering 92% of market share. There are lots of space
| companies. They are not price competitive. At all.
|
| It costs $2720/kg to launch payload with Falcon 9. The next
| closest, US-allied launch vehicle costs $9,167/kg. Falcon
| Heavy will extend the lead to $1500/kg.
|
| You're not going to compete in building a constellation of
| satellites using launches that cost 3.5-6.1x the price
| (depending on when they get to launching vs readiness of
| Heavy)
|
| The AST SpaceMobile BlueWalker 3 weighs 1500kg. They want to
| launch 243 satellites. The price difference between using
| Falcon Heavy and Arianne 9 is $2.4B. AST SpaceMobile's market
| cap is $675M.
| demondemidi wrote:
| That's a great argument for the government to seize both SpaceX
| and StarLink.
| pokstad wrote:
| Doesn't AWS do that for a lot of ecommerce companies?
| gerash wrote:
| Did you know that Samsung makes the displays for iPhones ?
| krunck wrote:
| I've always thought that any service that gets delivered over
| media strung on a telephone pole aught to be regulated as a
| utility. There are only so many cables you can hang off a pole
| before it becomes a technical and aesthetic problem.
|
| I submit that the same goes for satellites in orbit. How many
| 5000+ constellations will there be around the planet before we
| run into space congestion/traffic and aesthetic problems?
| Ajedi32 wrote:
| I suspect you'd run out of spectrum long before you'd run out
| of orbits. But we'll see. Maybe there are use-cases for
| megaconstelations that don't require as much spectrum as an
| ISP, especially once there's the ability to interface with an
| existing LEO-based ISP.
| lxgr wrote:
| That's definitely the case for omnidirectional ground
| stations, i.e. most cell phones (beamforming/MIMO as used in
| 4G/5G and Wi-Fi nonwithstanding, since that mostly leverages
| heavy multipath propagation which is presumably not a thing
| for line-of-sight communication to satellites).
|
| The only reason there is even a point for Starlink to have
| more than one satellite covering the same geographic
| footprint simultaneously is that both the satellites and the
| ground stations use phased array antennas and are largely
| stationary (or at least are moving somewhat
| predictably/rotating in space fairly slowly), which allows
| reusing the same frequency for customers in the same ground
| cell at the same time from two different satellites.
|
| Highly mobile ground stations will likely continue to be
| served by a single satellite per ground location for the
| foreseeable future, which makes spectrum the scarce resource.
| chiefalchemist wrote:
| Rival is the wrong word. It's based on scarcity. Satellite-to-
| smartphone is a massive market, with plenty of opportunity to go
| around for the foreseeable future. It would be stupid to enter
| such a large and growing market and believe you're going to
| immediately punch the reigning 800 lbs gorilla straight in the
| mouth. That's senseless.
| ttpphd wrote:
| Astronomers hate this one weird business trick.
| Retric wrote:
| Most astronomers really don't care. It's a very specific kinds
| of observation that get impacted quite a bit, while many others
| have minimal to zero impact.
|
| Starlink could directly fund some projects and completely
| offset their impact, but that doesn't seem likely at this
| point.
| e44858 wrote:
| Google Fi currently uses the T-Mobile infrastructure. I wonder if
| this new partnership means that it will support AT&T as well.
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