Starlink plans are generally no-contract (although a 12-month minimum can apply if a customer is on a free hardware deal). So price changes can come at random, catching some users off guard.
“It comes as no real surprise that Starlink has decided to raise prices across the globe, although it is an unwelcome move for those who have no other choice for their broadband because of where they live,” Technology Users Association of New Zealand head Craig Young told the Herald.
The removal of old copper lines had strengthened the newcomer’s position. A Chorus multi-billion-dollar proposal to expand public-private fibre into rural areas has been put on the Government’s back burner.
“We have been talking about the risk of us relying on Starlink’s service to reach those who are remote, and remain concerned that they are essentially a monopoly with no real competition,” Young said.
“This move will not improve the urban-rural divide in broadband at all.”
Wispa to a scream
The rise of Starlink has also caused pain for the small, rural and provincial ISPs who make up Wispa (the wireless internet service providers association).
“We and other wisps are now removing some of our wireless sites where the number of customers connected to the tower has fallen below a level that’s viable,” Full Flavour’s Jesse Archer tells the Herald.
“This is a direct result of customers choosing Starlink instead of a local provider,” says the owner of the Bay of Plenty-based service.
“When we remove a tower, it’ll never be reinstated, so rural folk living within the vicinity permanently lose the choice we presently offer and Starlink further consolidates its monopoly.”
Starlink: Rising costs
Starlink did not immediately respond to a Herald query about its price increases.
But a Starlink email to customers, titled “Upcoming Price Adjustment”, said: “Starlink is rapidly increasing network capacity, expanding coverage and improving reliability to deliver faster, more consistent connectivity.
“Strong demand for Starlink reflects the value customers continue to see in the service. This adjustment supports ongoing improvements and investment in affordable, high-performance products and services as global operating costs continue to rise.”
The rising popularity of the service means more satellites have to be launched. Starlink’s so-called “celltowers in space” have the same limitations as celltowers on Earth: the more people connect at once, the more congested the service becomes.
Big money IPO in the works
Starlink, which operates a network of thousands of low Earth-orbiting satellites, is a fully-owned subsidiary of Elon Musk’s SpaceX – which is planning a US sharemarket listing next month at a valuation of US$1.75 trillion ($2.99t) or more.
The company has yet to release final details, but is expected to attempt to raise around US$80 billion with its listing, which would make it easily the largest IPO ever.
More than $100m from NZ
Starlink earned New Zealand revenue of $101.1m last year, according to Commerce Commission figures, as its local customer base rose by 57% from 37,000 to 58,000.
Musk’s company now accounts for more than 19% of New Zealand’s rural broadband market and around 2% of internet connections overall.
Competition on the way
Starlink has three lines of business in New Zealand: its satellite dish-based service (the subject of the June price rises), which it sells directly to customers; its much more expensive business-grade service, involving a larger dish, which is sold by One NZ, Spark and 2degrees; and its mobile-to-cell service for phone companies, which lets One NZ and Spark customers use Starlink for text and light data when stuck in a mobile blackspot.
In all three segments, it will face competition from Amazon Leo. The Jeff Bezos-founded company is spending more than US$10b on its service that will compete with Starlink, using a similar swarm of thousands of satellites.
Amazon Leo (formerly known as Project Kuiper) has inked a deal with Australia’s Crown-owned National Broadband Network to provide service for 300,000 Australians in remote rural areas by the end of the year.
The Amazon firm also gained Overseas Investment Office permission to buy land to build its first satellite ground station (at an undisclosed location) in New Zealand. Construction is now underway.
There is a third US firm, AST SpaceMobile, which is taking a different approach by launching a handful of satellites, each with a phased array the size of a tennis court.
Local partner 2degrees is building a ground station in Marton in Manawatū, where AST SpaceMobile will install equipment. The telco says it will launch voice, text and data services via AST SpaceMobile, but won’t name a launch date at this point.
AST SpaceMobile’s investors include Google, AT&T, Samsung and Vodafone.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
