Thursday, February 22, 2018

Constellation satellite broadband: the first shoe drops

I’ve never been convinced about the business model for satellite constellation broadband. However, much smarter (and much, much richer) people than me have invested billions in these businesses. How could one tell if there's going to be a there over there?

SpaceX’s behavior will be a useful leading indicator for this sector, since I think Elon Musk sees broadband as a cash cow to fund his Mars mission. If SpaceX deployment lags or slows, it’ll be a good sign that NGSO broadband isn’t a good business.

A story in today’s WSJ is an early sign of bad news: “SpaceX Throttles Back Broadband Hopes --- Fast global internet likely to take longer than anticipated”. Some highlights:

“Acknowledging there are no final cost estimates or engineering designs yet for its proposed broadband constellation, spokesman John Taylor revealed substantial delays from initial project timelines. [The] company signaled that development of its high-profile satellite network has been significantly slower -- and seemingly more complex -- than many inside and outside SpaceX originally anticipated.”

“SpaceX said in Tuesday night's statement, "we still have considerable technical work ahead of us to design and deploy" some 4,400 similar satellites. The tentative goal of starting limited service by 2020 now appears unrealistic based on that language, but the company didn't provide an alternate schedule.”

“SpaceX engineers are still considering the most appropriate and cost-effective space and ground technologies to embrace, without firming up subcontractors or completing production plans.”

“… technical and financial details of anticipated ground equipment for subscribers -- considered critical elements in any such project -- are still undetermined.”
 This doesn't fill me with confidence...

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