Starlink : Markets and Marketing

[RocketGoBoom]

According to Viasat's website, they booked an Atlas for Viasat-3. Did he actually say they booked a Vulcan? Or that Atlas V was competitive with FH, which sounds rather dubious?

https://www.viasat.com/news/viasat-selects-united-launch-alliances-proven-atlas-v-rocket-commercial-satellite-launch

Viasat's CEO told me yesterday, no hedging about it, that they switched to ULA Vulcan (from Atlas V) and Ariane 6 (from Ariane 5). And their Falcon Heavy launch will be their last one with SpaceX due to future Starlink competition.

There are three gen 3 satellites for launch between mid 2021 and end of 2022. So all three contracts will be used. He did not indicate which launch provider will go first. He doesn't plan to cancel the Falcon Heavy launch contract, I think because of the non-refundable deposit already paid.

[envy887]

According to Viasat's website, they booked an Atlas for Viasat-3. Did he actually say they booked a Vulcan? Or that Atlas V was competitive with FH, which sounds rather dubious?

https://www.viasat.com/news/viasat-selects-united-launch-alliances-proven-atlas-v-rocket-commercial-satellite-launch

Viasat's CEO told me yesterday, no hedging about it, that they switched to ULA Vulcan (from Atlas V) and Ariane 6 (from Ariane 5). And their Falcon Heavy launch will be their last one with SpaceX due to future Starlink competition.

There are three gen 3 satellites for launch between mid 2021 and end of 2022. So all three contracts will be used. He did not indicate which launch provider will go first. He doesn't plan to cancel the Falcon Heavy launch contract, I think because of the non-refundable deposit already paid.

That makes a lot of sense. Vulcan and Ariane 6 are a lot cheaper, and definitely better positioned to be competitive with FH, compared to Atlas or Ariane 5. I don't think this has been reported anywhere though.

Did he talk about the market differences resulting from the large difference in latency between GEO and LEO/VLEO?

[RocketGoBoom]

Did he talk about the market differences resulting from the large difference in latency between GEO and LEO/VLEO?

Mark Dankberg doesn't see latency as a key customer issue. He says customers care about data caps, fast enough speeds for Netflix to work, but not latency. The only applications where latency matters is gamers, VOIP, video conferencing, etc. So while he was saying that, I was thinking to myself, those are 3 fairly important applications that a lot of people care about.

I fully understand that has to be the company line, because his GEO satellites cannot compete with LEO latency. Like Elon said, this is not some goal SpaceX aspires to meet. It is just the physics. There will be much lower latency. So now Viasat and EchoStar (and all GEO providers) need to argue that latency doesn't matter. They are wrong, it does matter. But for marketing purposes, they cannot admit it.

I didn't say anything to him to challenge his statements, even though I was thinking it on the inside. It would have been too rude for me to go off about "latency matters" in front of 15 other financial guys in the room. I was already pushing it with some of my questions.

I was sort of dominating the questions in the room and I had to offer to let others get their questions in. But I could tell many other people in the room didn't even know the right questions to ask. The other people in the room were asking CAPEX spend, debt, etc. And yes, to stock guys that is important. But I felt like the other guys in the room were not really grasping the real competitive change in the landscape. Their understanding seemed limited to, "Elon Musk, the Tesla/SpaceX guy that lands rockets on boats, is now competing against Viasat and EchoStar. That sounds bad."

I didn't get the sense that any of the financial guys had done the cost / Gbps math that we have been discussing in this topic, and our math was confirmed by the Viasat CEO. While I was jamming through the numbers with the CEO, he was flipping around his laptop to show me his numbers and was actively trying to prove that Viasat will be financially competitive with SpaceX. And he did successfully prove that to me ... somewhat. I came away from the discussion firmly believing that EchoStar HughesNet is screwed and will be the first to die in this new competitive landscape. Viasat will definitely survive longer. But I don't know how long. Lots of questions still to be answered in all of this. Plus Viasat has a large US govt customer business that could absorb their capacity, even if Viasat loses consumer rural satellite internet customers.

The way Viasat's stock is crashing today, I can't help but wonder what those analysts wrote to their clients yesterday or overnight.

[RedLineTrain]

In terms of spectrum, Viasat's CEO said that SpaceX is fine in the USA for their Ka and Ku band spectrum. But elsewhere around the world, under ITU rules, SpaceX's spectrum will be subordinate to OneWeb. I don't believe that is final, but that is his opinion. Any other constellation from China or Amazon Kuiper will be subordinate to OneWeb and SpaceX.

Mark Dankberg seemed to indicate that SpaceX is rushing to launch so much capacity, that investors in other constellations might be hesitant to fund more competition.

Regarding the rush to launch capacity, there are lots of good reasons to launch early and often, only one of which is that it will kill other constellations in their cribs.  Another is that they can sell the capacity!

Regarding spectrum priority on the 4,409 Ka/Ku-band satellites, as far as I can tell, you are right that it's not final.  It will be a battle in each jurisdiction, just as it was in the U.S.

But on the 7,518 VLEO satellites, I don't think that OneWeb has similar priority.  I don't know how near-term the VLEO satellites are, but two things for consideration.

(1) The VLEO satellites have more spectrum rights in the US than the Ka/Ku satellites.  5 GHz downlink versus 3.8 GHz downlink (user and gateway).  The upload for both is ~3 GHz.  Further, Starlink gave up part of the licensed Ka/Ku-band for the radio astronomers.

(2) The VLEO satellites operate at 2x-4x higher frequency, so all else equal would carry 2x-4x bandwidth.  Of course, I understand that not all else is equal with attenuation and the like, and would be happy to be shown to what extent it is not equal.

Ka/Ku Downlink
10.7 - 12.7 GHz (2 GHz for user downlink)
17.8 - 18.6 GHz (0.8 GHz for gateway downlink)
18.8 - 19.3 GHz (0.5 GHz for gateway downlink)
19.7 - 20.2 GHz (0.5 GHz for gateway downlink)

Ka/Ku Uplink
12.75 - 13.25 GHz (0.5 GHz for user uplink)
14.0 - 14.5 GHz (0.5 GHz for user uplink)
27.5 - 29.1 GHz (1.6 GHz for gateway uplink)
29.5 - 30.0 GHz (0.5 GHz for gateway uplink)

V-Band Downlink
37.5 - 42.5 GHz (5 GHz)

V-Band Uplink
47.2 - 50.2 GHz (3 GHz)

[Mandella]

First off, thanks again to RocketGoBoom both for having good questions to ask during the meeting, and for sharing them with us.

There is a subject that I notice did not come up, and indeed it is difficult to quantify, but the matter of general customer dissatisfaction with customer service and deceptive advertising (Unlimited Bandwidth for $155.00 a Month! -- *as long as you don't go over 100 gigs that is* in very small print).

Anecdotal evidence of course, but I've found myself being a word of mouth salesman for Starlink with several friends and acquaintances who have been expressing dissatisfaction with the current telecoms. IF Musk and company can manage to have a reasonably successful rollout then I think they might win quite a few customers who don't care at all about latency or gaming, they just are tired of being jerked around and price gouged.

Further anecdote and nothing to do with Viacom, but I know two people in town who refuse to do business with AT&T and just do without wired internet in their businesses. We're talking fiber lines here they are refusing to use because they have been burned so badly by AT&T in the past. They will go to Starlink in a flash, and this is a case where they will be choosing the "inferior" service because of distrust and anger at past treatment by the established service.

[wannamoonbase]

According to Viasat's website, they booked an Atlas for Viasat-3. Did he actually say they booked a Vulcan? Or that Atlas V was competitive with FH, which sounds rather dubious?

https://www.viasat.com/news/viasat-selects-united-launch-alliances-proven-atlas-v-rocket-commercial-satellite-launch

Viasat's CEO told me yesterday, no hedging about it, that they switched to ULA Vulcan (from Atlas V) and Ariane 6 (from Ariane 5). And their Falcon Heavy launch will be their last one with SpaceX due to future Starlink competition.

There are three gen 3 satellites for launch between mid 2021 and end of 2022. So all three contracts will be used. He did not indicate which launch provider will go first. He doesn't plan to cancel the Falcon Heavy launch contract, I think because of the non-refundable deposit already paid.

And its a cheaper ride on a rocket that is ready today.  Vulcan and Ariane 6 are not flying yet.

I appreciate ViaSat's position on not flying on a SpaceX vehicle.  But then they raise their own costs.  Not flying with SpaceX will not hamper SpaceX or Starlink.

[Swedish chef]

Maybe he doesn't see the market for so much capacity. 42,000 satellites x 20 Gbps = 840 Tbps. Even if only 10% to 20% can be utilized, that is between 84 Tbps (10% utilization) and 168 Tbps (20% utilization). And that assumes that SpaceX stays at 20 Gbps per satellite, which is unlikely. At some point the capacity per satellite improves. But imagine that. Starlink would have between 84-168 Tbps of capacity competing globally against Viasat at 10 Tbps (with gen 4 sat) and EchoStar at under 1 Tbps. I am assuming other GEO legacy operators like SES, Eutelsat, Intelsat are also in the same ranges as Viasat or worse.

I could see a market for 42,000 satellites. If SpaceX where to offer service without data caps for their customers they would probably in a short time fill up the capacity. And with that offer such a sweet deal that people would be screaming take my money.

[DigitalMan]

First off, thanks again to RocketGoBoom both for having good questions to ask during the meeting, and for sharing them with us.

There is a subject that I notice did not come up, and indeed it is difficult to quantify, but the matter of general customer dissatisfaction with customer service and deceptive advertising (Unlimited Bandwidth for $155.00 a Month! -- *as long as you don't go over 100 gigs that is* in very small print).

Anecdotal evidence of course, but I've found myself being a word of mouth salesman for Starlink with several friends and acquaintances who have been expressing dissatisfaction with the current telecoms. IF Musk and company can manage to have a reasonably successful rollout then I think they might win quite a few customers who don't care at all about latency or gaming, they just are tired of being jerked around and price gouged.

Further anecdote and nothing to do with Viacom, but I know two people in town who refuse to do business with AT&T and just do without wired internet in their businesses. We're talking fiber lines here they are refusing to use because they have been burned so badly by AT&T in the past. They will go to Starlink in a flash, and this is a case where they will be choosing the "inferior" service because of distrust and anger at past treatment by the established service.

The company I used to work for had facilities spread out in the US and in several countries.  I'd be curious to know how reasonable it would be to replace the T3 and other types of connections that were present.

Certainly there must be a lot of other companies with similar circumstances.

edit: just to note, ViaSat wouldn't be an option here, because it would require low latency.  Even on occasions the wired connections would suck and prohibit work.

[envy887]

According to Viasat's website, they booked an Atlas for Viasat-3. Did he actually say they booked a Vulcan? Or that Atlas V was competitive with FH, which sounds rather dubious?

https://www.viasat.com/news/viasat-selects-united-launch-alliances-proven-atlas-v-rocket-commercial-satellite-launch

Viasat's CEO told me yesterday, no hedging about it, that they switched to ULA Vulcan (from Atlas V) and Ariane 6 (from Ariane 5). And their Falcon Heavy launch will be their last one with SpaceX due to future Starlink competition.

There are three gen 3 satellites for launch between mid 2021 and end of 2022. So all three contracts will be used. He did not indicate which launch provider will go first. He doesn't plan to cancel the Falcon Heavy launch contract, I think because of the non-refundable deposit already paid.

And its a cheaper ride on a rocket that is ready today.  Vulcan and Ariane 6 are not flying yet.

I appreciate ViaSat's position on not flying on a SpaceX vehicle.  But then they raise their own costs.  Not flying with SpaceX will not hamper SpaceX or Starlink.

IF you're willing to rideshare, FH probably isn't cheaper. Ariane 6 and Vulcan can probably both launch a 7 t sat in the upper berth for under $90M, and close the other $20-30M in costs with the lower berth.

[matthewkantar]

The not renting Falcons to spite SpaceX simply makes your launches later and more expensive, leaves your sat taking longer to get on station, and worst of all leaves more launch slots for Starlink.

[thirtyone]

Viasat's CEO told me yesterday, no hedging about it, that they switched to ULA Vulcan (from Atlas V) and Ariane 6 (from Ariane 5). And their Falcon Heavy launch will be their last one with SpaceX due to future Starlink competition.

That is...a rather impressive statement from the CEO. It also might tie in to the interest in SpaceX wanting to separate out the Starlink business from the launch business. If Starlink causes commsat customers to not want to use SpaceX launch services because of concern that the revenue is essentially funding the competition, then SpaceX is at least partly competing with itself by trying to run and launch Starlink.

[RocketGoBoom]

Viasat's CEO told me yesterday, no hedging about it, that they switched to ULA Vulcan (from Atlas V) and Ariane 6 (from Ariane 5). And their Falcon Heavy launch will be their last one with SpaceX due to future Starlink competition.

That is...a rather impressive statement from the CEO. It also might tie in to the interest in SpaceX wanting to separate out the Starlink business from the launch business. If Starlink causes commsat customers to not want to use SpaceX launch services because of concern that the revenue is essentially funding the competition, then SpaceX is at least partly competing with itself by trying to run and launch Starlink.

I don't think that spinning off Starlink into a separate company is going to change the minds of any possible Starlink competitors. Elon will still own a big piece of Starlink. He owns ~54% of SpaceX, so even if they offer to sell 20% of the Starlink shares to the public in an IPO, Elon would still own about 43% of Starlink after that.

Elon owns about 20% of Tesla and it is considered "Elon's company". Starlink will forever be linked to SpaceX as a sister company.

There are some satellite companies that clearly can separate the two and buy the cheap Falcon 9 ride to space. Kepler, Eutelsat, etc. There are other companies that take Starlink as a personal insult.

I am sure Elon and Gwynne Shotwell has a long discussion, before starting Starlink, about the impact on their launch manifest due to competing with some of their customers.

[dkovacic]

Dear RocketGoBoom,

Was SES mPower mentioned? Although they might not address end consumer segment, they seem at least cost competitive with both Viasat and Oneweb. Plus MEO enables teleport location distances thousands od km away.

Were teleport/gateway buildup costs discussed? That also is a major expense for any space based network.

Sent from my SM-G965F using Tapatalk

[JamesH65]

The not renting Falcons to spite SpaceX simply makes your launches later and more expensive, leaves your sat taking longer to get on station, and worst of all leaves more launch slots for Starlink.

Quite. Given that SPX appears to be making Starlink satellites faster than they can launch them, anything else using a F9 is slowing SpaceX down. You would have thought they would jump at the chance.

[RocketGoBoom]

Dear RocketGoBoom,

Was SES mPower mentioned? Although they might not address end consumer segment, they seem at least cost competitive with both Viasat and Oneweb. Plus MEO enables teleport location distances thousands od km away.

Were teleport/gateway buildup costs discussed? That also is a major expense for any space based network.

Sent from my SM-G965F using Tapatalk

I don't recall that coming up during any of the presentation or Q&A. Remember, this was a Viasat presentation at a Raymond James Investment Conference for analysts. The CEO's job was to promote his company and his strategy. SpaceX Starlink came into the conversation because Ric Prentiss, the Raymond James analyst guiding the session, mentioned it is one of the biggest questions he gets about Viasat from clients, so Viasat's CEO of course needed to address Starlink directly. But otherwise, the CEO doesn't want to spend his time attacking every other competitor.

Mark Dankberg's goal was to provide updates on his three new upcoming satellites and how that will increase his nameplate capacity from 400 Gbps (today) to 3,400 Gbps (8.5x increase) by the end of 2022.

One of my questions was, with the increase in capacity by 8.5x, is that a straight linear line increase in revenue as they sell that capacity? Or is there some deflation in revenue $$$ per Gbps with the orgy of capacity coming from Viasat and competitors (aka Starlink). He admitted that there will likely be lowering of prices or increases in data caps / speeds or a combination of both. So he is not expecting an 8.5x linear increase in revenue. He is going to have to spend some of that new capacity on existing customers (speed and data caps) to keep them happy and protect Viasat from competition.

[abaddon]

Viasat's CEO told me yesterday, no hedging about it, that they switched to ULA Vulcan (from Atlas V) and Ariane 6 (from Ariane 5). And their Falcon Heavy launch will be their last one with SpaceX due to future Starlink competition.

That is...a rather impressive statement from the CEO. It also might tie in to the interest in SpaceX wanting to separate out the Starlink business from the launch business. If Starlink causes commsat customers to not want to use SpaceX launch services because of concern that the revenue is essentially funding the competition, then SpaceX is at least partly competing with itself by trying to run and launch Starlink.

Airbus is manufacturing Oneweb satellites and is a major investor in Oneweb, Ariane Group is a JV of Airbus and Safran, and yet he doesn't see to have a problem launching on Ariane rockets...

[sauerkraut]

Its a tunnel vision thing

[bstrong]

The not renting Falcons to spite SpaceX simply makes your launches later and more expensive, leaves your sat taking longer to get on station, and worst of all leaves more launch slots for Starlink.

Quite. Given that SPX appears to be making Starlink satellites faster than they can launch them, anything else using a F9 is slowing SpaceX down. You would have thought they would jump at the chance.

I'm sure there's some genuine frustration, but this all smells like a negotiating tactic to me. When it comes time to book another launch, you can bet they will be getting a bid from SpaceX. Otherwise they are not only avoiding the lowest cost provider, but they'll get higher prices from everyone else.

This business is too competitive to deliberately handicap yourself like that.

[RocketGoBoom]

Viasat's CEO told me yesterday, no hedging about it, that they switched to ULA Vulcan (from Atlas V) and Ariane 6 (from Ariane 5). And their Falcon Heavy launch will be their last one with SpaceX due to future Starlink competition.

That is...a rather impressive statement from the CEO. It also might tie in to the interest in SpaceX wanting to separate out the Starlink business from the launch business. If Starlink causes commsat customers to not want to use SpaceX launch services because of concern that the revenue is essentially funding the competition, then SpaceX is at least partly competing with itself by trying to run and launch Starlink.

Airbus is manufacturing Oneweb satellites and is a major investor in Oneweb, Ariane Group is a JV of Airbus and Safran, and yet he doesn't see to have a problem launching on Ariane rockets...

Mark Dankberg (Viasat CEO) said that SpaceX (not sure who) promised him that Starlink is not competing in the same markets as Viasat at the time he reserved the launch on Falcon Heavy. So maybe it was that perceived violation of trust which has him a bit anti-SpaceX right now for launch services.

In order to get a good price on ULA Vulcan, Viasat will have to be willing to use at least someone else in order to get a lower price from multiple bidders. So Viasat should probably just get over the Starlink hurt feelings and have SX, ULA and A6 all bidding against each other.

[Ludus]

Is there an efficient market niche for big GEO Sats after Starlink is mature, with laser inter-satellite links and 10k+ Sats? Streaming Video? Might SpaceX just move directly against GEO Sat companies building their own as well? They could be MUCH bigger. Starship could put up 100 ton GEO Sats. If they’re not customers anyway, SpaceX-Starlink has no reason not to directly compete with them.