Telcos’ competitive landscape accounts for land cable internet and space internet provided by geostationary satellites. The Space internet mostly used for distant and rural areas where cables cannot reach. And, above all, it comes at a cost. Satellites cost zillions and located 36000 km away from the surface of the Earth. As a result, distance creates latency of 0.7 seconds compared to 0.01 – 0.06 seconds of land-based internet. Unlike traditional land-based, the internet from space has a higher price for the customer and signal quality vary throughout the day. Therefore, it remains not attractive to a wider audience.
Access to internet
Mobile devices and internet are vital to access goods and services, education, healthcare and growth opportunities. The amount of unique mobile subscribers accounts for 5.1 billion (or 67% of the total population). At the same time mobile internet used by 3.6 billion (or 47% of the total population).
Seems like Telco players lack the ability to introduce innovation in the field of customer service, as well as to provide distant areas with internet access. Or, simply cannot?
At the same time, over the top (OTT) messaging applications like WhatsApp and Viber constantly grow in number of users. Slowly but steadily taking over the Telco-s revenue share. Will messaging apps fully replace mobile carrier services? How soon?
In fact, WhatsApp has 1 billion daily users. Whereas Viber spanned across the globe. It is being used in 193 countries (out of 195 World countries) and has over 1 billion users. Not to mention others like Skype and Snapchat with millions of daily users.
Catalyst for disruption
The Space race for broadband internet has begun years ago. Giants like SpaceX, Amazon, and Facebook are planning to provide massive coverage from above. Moreover, Google demonstrates support for SpaceX Starlink with 1 billion dollars.
Interestingly, there are 4987 satellites orbiting the Earth and only 1100 currently in operational status.
In contrast, it is planned to launch 4000 – 12000 smallsats in the frame of Starlink by SpaceX only. The Amazon’s Kuiper constellation will account for 3236 satellites. And OneWeb backed by Richard Branson will launch 900 or more. Not to mention other companies like Telesat, LeoSat Enterprises. No doubt, smallsat (under 500kg) mega-constellations is the name of the game today.
Above all, SpaceX under its sister company “SpaceX Services Inc.” seeks for approval to build 1 million ground stations.
It would take Starlink at least 360 satellites to achieve the minimum broadband coverage of the earth and 720 satellites for moderate coverage. Additional launches will follow this year and commercial operations begin until 2020 at the earliest.
How exactly private space companies are solving the high latency issue?
SpaceX Starlink will operate at an altitude of 550 km, which will bring latency down to a competitive level of 0.01 seconds. Therefore, distance from the surface of the Earth has a direct influence on latency. As a result, the Low Earth Orbit (LEO) up to 2000 km is aimed by all players.
Most importantly, the internet from space will bring affordable service not only to distant and rural areas. Hence becoming accessible everywhere to every person. Finally, it will raise the empowerment of an individual to a new level.
World Bank’s global challenge
Without inclusive financial systems, individuals and small enterprises need to rely on their personal wealth or internal resources. Therefore, they invest in their education, become entrepreneurs, or take advantage of promising growth opportunities on their own. At the same time, modern development theories increasingly emphasize the key role of Finance. Which serves as an essential part of the development process. Simply put: “How to earn if there is nothing to burn?”
According to the World Bank, an estimate of 1.7 billion adults (or 31%) lack access to financial services. Almost 3.39 billion (or 43.9%) have no access to internet. Distant and rural areas remain unbanked or underbanked. As a result, people are left face-to-face with daily issues of simple and important needs: water, electricity, housing, healthcare, and education.
The World Bank’s initiative UFA2020: Universal Financial Access by 2020 is aimed to provide financial inclusion to help people escape poverty. The ultimate goal to eradicate it by 2030.
The internet from space at any place, any time is part of NewSpace philosophy. Most importantly, it will serve as a foundation to provide access to services and financial as well. Furthermore, from distant unbanked or underbanked areas, it will be possible to send money to families or receive financial aid in poorly reachable destinations. P2P (peer-to-peer) payments will enable money transfers in no time directly to any person anywhere.