Where is the Starlink market today?

Starlink has acquired many customers that live in remote locations and have no access to the Internet. Developed countries have areas with no mobile phone service and no type of Internet service to homes so Starlink is popular in these locations. The Starlink customers share a common characteristic, they are in a segment of the population that can afford the prices that Starlink charges for the equipment and the monthly service fee and most are able to install the antenna and connect the service. There are people who would like Starlink but can’t afford the cost. The high cost is justified because SpaceX has invested billions of dollars to develop the technology and launch satellites.

Starlink has very profitable market segments, and one is the marine market. Starlink has replaced VSAT as the marine data service. One large cruise ship can generate millions of dollars of income per year for Starlink. However, there are only a few thousand of these customers around the world.

At the same time that SpaceX was developing the Starlink network, telecom businesses in developed countries were busy upgrading mobile phone networks to 5G so that they could provide a service for more customers with more calls and faster data speeds. With the faster data speeds that 5G provides, the telecom businesses discovered a new market opportunity of a fixed wireless data service to homes, they called it fixed wireless access (FWA). In urban areas FWA competes with ADSL connections providing 10x the data speed for the same price. In rural areas FWA competes with Wireless Internet Service Providers (WISP’s) and with Starlink. The FWA service is about one third the cost of Starlink for a similar data speed.

The telecom businesses are building more rural towers to extend their areas of coverage and capture more profitable FWA business. Meanwhile the WISP’s cannot compete with FWA and many have transformed into fiber ISP’s using government loans and grants. The FWA service is eating into the Starlink customer base and is reducing the number of available customers in the developed countries. Many Starlink customers switch to FWA when the service becomes available. There is a thriving cottage industry that is providing 5G modems and Yagi rooftop antennas for 5G customers, permitting a home that has line of sight to a 5G tower to connect over several miles and get a good data speed.

Starlink does have customers in the developing parts of the world but this customer base is limited to a few people who can afford the service. Starlink is also hampered due to having few countries in the African continent that have approved the Starlink service.

What are the figures for Internet access in world markets?

A business intelligence company called Statista has regularly published information about the global availability of Internet access. Three Statista charts are included here to illustrate the global Internet services situation.

The first chart illustrates Internet access penetration by region. As expected, Northern Europe has the highest penetration rate of 97%. The area of Eastern Africa has a low penetration rate of only 26%, and these customers are in urban areas. The 74% of the population in rural areas has no Internet access.

Source: Statista, © 2024

The Internet penetration in the rural areas of many countries in South America, the Caribbean, Africa, Asia and Oceania is low; the Internet services that are available are concentrated in urban areas.

The second chart from Statista shows the ten countries with the highest number of people not connected to the Internet as of April 2024. The total number of people with no access to the Internet in the 10 countries is 1.6 Billion.

Source: Statista, © 2024

The final chart from Statista shows the growth of global Internet use where 67% of the global population has access to the Internet in 2024. Statista states;

“In 2024, the number of Internet users worldwide stood at 5.44 billion, which means that around two-thirds of the global population is currently connected to the world wide web.”

Source: Statista, © 2024

With a current global population of 8.16 billion people, the remaining one third of the population of 2.72 billion people who don’t have access to the Internet are divided into four groups, shown below.

1. Resident in a country where Starlink is not approved.
2. Too young or too old to be concerned about the Internet.
3. Living in poverty and cannot afford an Internet service.
4. Would like access to the Internet and can afford a low-cost service but there is no infrastructure to provide access.

The first three groups are not candidates for any type of Internet service, however group 4 represents potential customers for an economical Internet service. It is hard to identify the number of group 4 people, but an estimate is that this represents up to about 40% of the one third without Internet, this number will be 1.1 billion people. This number will increase as the young members of group 2 get older, and some members of group 3 move up out of poverty.

Many group 4 people have mobile phones. The low cost phones (starting at $20) are used with a pre-payment plan. People travel to an area where there is mobile phone coverage to make calls, maybe the nearby town. In the countries where these people live the mobile phone service uses earlier generation technology, 2G/3G. It is common practice for advanced economy telecom businesses that upgrade networks from 4G to 5G to move earlier generation equipment to countries where the network can be upgraded from 2G or 3G to 4G.

Why do people in remote rural communities want Internet anyway?

Many people in rural communities view the Internet as a benefit that might improve their lives. Here are a few reasons why.

• Communications with others outside the community.
• Access to information, training, etc.
• Access to materials for commerce.
• Access to global markets for commerce.
• Access to social media to share ideas.

Organizations like Rotary International provide funds for communities to develop commerce outside the community and Rotary provides the communications links for the communities. When a community has access to the Internet they depend much less on help from international organizations because they have the Internet tools that will help them.

What is the service delivery model for a low cost community Internet service?

Currently there are tens of thousands of small communities that have an Internet service obtained via a satellite Internet provider, either with HughesNet or Starlink. Starlink is popular for community Internet, as HughesNet satellite antennas have limited coverage of the earth’s surface. Currently there are communities in remote locations such as the middle of the Amazon jungle who are using Starlink to provide Internet access for the residents.

The communities build a simple network infrastructure and have help from technical people who sell the equipment in each country. Many communities have no or intermittent power and so they rely on solar power to operate the equipment. Most community WiFi Internet systems control access to the Internet. With the Starlink service it is important to prevent sharing of copyrighted files, prevent excessive data downloading and prevent congestion of the connection.

An Internet controller such as Guest Internet manages the network access efficiently, with the following features.

• Print access codes onto vouchers to give or sell to the residents.
• Set the maximum duration that the code can be used.
• Set maximum download and upload speeds for each code.
• Set the maximum data that can be downloaded and uploaded for each code.
• Set the maximum number of devices that can use a code, this is usually 1.
• Block attempts to share an authorized service connection, such as preventing the use of a phone as a hotspot.
• Block attempts to share copyrighted files by blocking Torrent protocols.
• Block attempts to access the Internet without a code, such as MAC spoofing.
• Monitor the service for failure; send an alert to the owner if something fails.
• Have remote access via a cloud system to monitor use of the service.

Products such as the Guest Internet controller are easy to use by community members and don’t require specialist skills, plus there are no other fees.

The community Internet service is funded either by community donations or by an individual who installs the service. In most communities an individual will purchase the equipment and install the service, then charge residents a fee to use the service. The fees charged will correspond to the economic abilities of the community. People in the community may be earning $50 per month. A community member might pay $2 for access to the Internet during a month. The cost can be kept low because the access code is time limited and the speed is limited. The person providing the service can give access codes to 250 people and can ensure that they will not be connecting at the same time due to the limitations of the code. If a community service can generate $500+ per month for the provider then the cost of the equipment can be recovered and the cost of the Starlink service can be paid. Many residents of the remote rural communities do not have bank accounts or credit cards. They do have cash to pay for the service and so a cash-based voucher charging system is important for the success of the project.

An approximate estimate of the potential of small communities around the world that could install a Starlink antenna to provide a community WiFi Internet service is in the range of 4.5M to 6.5M. There are a large number of people who would like to provide the Internet service for a community and who have the money to install the service, but they have several obstacles that include the following.

• Starlink does not make community use of their service easy, limitations in the terms of use, global distribution limits access to antennas, and restrictions on the location of antennas and the restrictions of roaming plans also limit community use.
• The people that want to provide the Internet service do not have technical training, but have taught themselves about networking. It is essential that people with no formal technical skills can install a community WiFi Internet service. The Guest Internet pre-configured STAR kits go some way towards helping people with limited skills to install a WiFi Internet service.

How can Starlink win the 4.5M to 6.5M small community customers?

The first step is to recognize the potential of the global small community Internet market and be prepared to adjust the services and products to meet the requirements of this new customer category.

Businesses have tried to monetize the developing country small community Internet market and have not been successful yet. The Meta Express WiFi project began in 2018 and was folded in 2022. The cost was high for members of a rural community in a developing country and people were dissatisfied with the service. The service was also limited by the backhaul connection to the Internet. At that time Meta was partnering with VSAT for the Internet backhaul service; Starlink has much faster speeds, much lower cost and has global availability when compared with VSAT. Starlink has largely replaced VSAT for marine Internet access. Starlink has the key component for a rural community Internet that Meta did not have, a high capacity backhaul connection to the Internet that can be deployed anywhere.

With a potential market of 4.5M to 6.5M communities, the income for Starlink can be estimated. First, calculating the low end of 4.5M communities.

• Sales of antennas at $300/antenna = $1.35B
• Monthly income at $200/network = $900M/month, $10.8B annually

For the high-end estimate of 6.5M communities, the numbers are:

• Sales of antennas at $300/antenna = $1.95B
• Monthly income at $200/network = $1.3B/month, $15.6B annually

Starlink will require a strategy to develop the small community opportunity, and a tactical plan to deploy the service. Perhaps Starlink is already looking at this market.

The Starlink current customer base has people who are comfortable with the technology and usually have the skills to set up the antenna and use it. The customers are early adopters of the technology. People use forums and social media groups to share information about Starlink installation and configuration; customers support customers. However early adopters are more likely to switch to the next best service; they have no brand allegiance. Some early Starlink customers have switched to FWA as the more-affordable service has become available in their region.

The rural communities in developing countries have characteristics that are unlike early adopters. Their technical knowledge is limited, and their buying decision will be made only after a period of lengthy consideration with information from others. They will not make a risky bet on a product that they don’t understand. Many technology businesses gain access to such markets through the development of partner programs that include local resellers and installers who receive technical training from the supplier and can interact with the local communities. Currently Starlink has a single tier of distributors who are focused on the high-end applications such as marine and industry. These target segments will give good profits but are limited in size.

Providing a WiFi Internet service for rural communities requires four elements.

1. The Internet backhaul, this is the Starlink antenna and service.
2. WiFi infrastructure to provide wireless access for mobile devices and homes. Similar to a small WISP network design; one long-range point-to-multi-point wireless access point that mobile devices can connect to within a range of tens of meters, and homes with a CPE antenna can connect to the central antenna at longer distances, line of sight.
3. Access control that will regulate access to the Internet to share the limited bandwidth between community members while preventing abuse of the service, and also have mechanisms that permit the community members to pay for the service so that the installation cost can be recovered, and the on-going operating cost can be paid. Without this there is no incentive for anyone to invest in the community installation.
4. Support to answer questions about the service, this can be in the form of a forum where users interact and Starlink or distributor specialists provide input for difficult questions.

As the technical knowledge of the community member installing the project will be limited it is important to provide the elements listed above as a pre-configured kit with clear and simple installation and operation instructions plus access to support. The community person who is the technical installer will speak English, as the English language is necessary to learn basic network skills.

What would a Starlink and/or partner product look like to sell to a remote community that will provide the Internet service for residents?

• A marketing plan that communicates in a simple language the benefits for the community and installer, the easy installation and use.
• A data service that accommodates the use of Starlink for a community Internet service. This is a “mini-WISP” service not currently supported by Starlink, where the end user can monetize the service. The service will have charges for data consumed above a threshold.
• A kit of pre-configured components that include the Starlink antenna, the Internet access controller and the outdoor point-to-multi-point wireless access point. The kit has installation instructions with how-to-install videos. The kit explains how to monetize the service with cash voucher sales. In addition there should be an optional pre-configured kit for homes that includes a CPE wireless and a wireless router.
• Have cloud management available for the kit to facilitate the remote management of the services and also have access to information for support.
• Support forum with user generated input, and input from knowledgeable people who can post solutions to difficult problems.
• Expand the present distribution network to include many more businesses that sell network and WiFi products in each target country, and that have the experience to support these products. This will mean lowering the obligations required of Starlink distributors to make stocking Starlink products accessible to smaller businesses.
• Development of a second tier of partners who can work with the distributors and who sell to and support the local communities. These partners will rely on in-country distributors to hold stock and provide products for installation projects. They will need access to technical and business training to help them to deliver the community solutions.

The current state of community WiFi Internet

There are thousands of people around the world who try very hard to install community WiFi Internet, with limited knowledge and limited access to information. They are the pioneers of the community Internet market and all have the characteristics of persistence and a desire to achieve a successful outcome for the community. Their numbers are limited which means that the community Internet market will grow in size slowly. That is until a large company discovers the opportunity to sell products to this market and provides the technical solutions that the communities and installers need.

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