The War for Satellite Dominance Over the World

The race for who will have more satellites

The sky is full of stars, dark matter, and… satellites! According to The Union of Concerned Scientists, there are currently around 2,200 of them in space, but any moment now Earth will be surrounded by a constellation of tens of thousands more. Jeff Bezos, Elon Musk and Mark Zuckerberg are racing for dominance in orbit. The result is that the internet is to become available across the entire globe, eliminating the problem of digital exclusion.

Jeff Bezos, Mark Zuckerberg and Elon Musk own some of the most expensive and most recognizable brands in the world. Their combined wealth is valued at more than $200 billion. Both Jeff Bezos (valuation as of January 2020: $115 billion), Mark Zuckerberg ($68 billion), and Elon Musk ($30 billion) are eccentric billionaires who enjoy rock-star fame and have easily achieved pop-culture icon status. Their path to the stars became possible because they involve themselves in the boldest projects. Until recently, only mad scientists from comic books had similar ambitions. Dominance in space is to secure them lasting hegemony in global markets.

Star Wars of the billionaires

Star Wars of the billionaires

According to The Union of Concerned Scientists, an organization founded more than half a century ago by students and professors at the famous American university MIT, there are more than two thousand satellites in Earth's orbit. Meanwhile, that number will soon cease to be current.

As recent reports indicate, Amazon plans to launch more than 3 thousand satellites into low Earth orbit, which will make it possible to deliver fast internet to regions that until now could only dream of it. This is to significantly contribute to eliminating the phenomenon of digital and information exclusion, opening new sales markets for Jeff Bezos's trading platform – says Sascha Stockem of Nethansa, a company specializing in support and automation of sales on Amazon.

Project Kuiper, as the initiative is called, gained publicity when GeekWire identified three sets of filings with the ITU, the international organization responsible for coordinating satellite orbits. The documents were signed by Kuiper Systems LLC. Only then did Amazon confirm its existence, stating that the project to deploy satellites in Earth orbit is underway. The American e-commerce giant has not yet decided whether it will build its own satellites or buy them from a third party. That is a tough nut to crack, because according to OneWeb, producing a single device costs about $1 million. Amazon has announced that it plans to launch more than 3 thousand of them into space. There is also no certainty as to how the e-commerce giant will put them into orbit. If Amazon's spokesperson is to be believed, the corporation will look at all possible options. However, it can be presumed that Jeff Bezos will use the services of the spaceflight company Blue Origin, which, incidentally, he also owns.

Meanwhile, Elon Musk's SpaceX plans to launch as many as 12 thousand satellites, each weighing little more than 400 kg (the lightest designs to date). In this way, the Starlink constellation is to hang over Earth. Some sources even cite the staggering figure of 40 thousand devices that the Tesla founder is to suspend in the sky in the near future.

OneWeb also plans to enrich the firmament with a sizable number of satellites. On the company's official website we read that there are to be as many as 900. On top of all that, Mark Zuckerberg plans to add his two cents by placing an as-yet-unknown number of devices in orbit.

Files from the sky

Files from the sky

According to data collected by the Statista portal, in 2019 nearly 4.5 billion people worldwide were active internet users, which covers 58% of the world population. This also means that more than 40% of humanity does not have access to the global network. There can be many reasons – geographic location, lack of appropriate infrastructure, political, economic or cultural issues. It is mainly with such regions in mind that Elon Musk and Jeff Bezos plan to launch space internet. There is no point in deluding ourselves that they are guided in these efforts solely by altruistic motives rather than by the ordinary desire for profit.

Stable, fast and ubiquitous internet access is a multidimensional investment. First, it is global publicity, but Jeff Bezos has already had enough of that. Having such infrastructure means access to a huge amount of data. It is also a step toward diversification. By becoming an internet provider, Amazon is entering a new, heavily entrenched market without restraint, gaining a separate source of income. Finally, what matters most to Jeff Bezos is his trading platform. Satellite internet available from anywhere on Earth will be like a steroid injection for the e-commerce market. Online commerce is facing a true boom – says Sascha Stockem, an expert in the field of Amazon. In his opinion, in the long term both Facebook and Amazon are securing their primary sources of income.

Cosmic prices

Elon Musk and Jeff Bezos fight for satellite dominance

Cosmic prices

Providers of stellar internet can count on considerable profits also from subscription sales. According to internal SpaceX documents, by 2025 the company hopes to generate as much as $22 billion in annual operating profit – mostly from sales of its satellite internet service. How much will such a service cost an ordinary Smith, Schmidt or Kowalski?

So far, none of the giants has commented on the subscription price, but SpaceX President Gwynne Shotwell mentioned in October 2019 that many consumers pay $80 for “poor-quality service.” We can therefore infer that such a sum did not come up without reason, but if the goal is to deliver internet to places that for various reasons are outside its reach, then an amount of over 300 zloty for access to the service is completely unrealistic. It is hard to imagine that residents of the Philippine islands or Madagascar could afford such an expense – points out Sascha Stockem.

In 2015 in Seattle, Musk suggested that tsuch a service could be offered free of charge, provided that a compatible device is purchased for between $100 and $300. So how much will one have to pay for access to satellite internet? This question still remains unanswered.

It is not out of the question, however, that the price for using satellite internet will be not dollars, but advertisements displayed to its users. At best, they may appear at login; in the worst case – pop up while surfing the internet. For both Amazon and Facebook, taking such a direction has a strong business justification. Both companies earn money from selling advertising space. Whether they decide on such an intervention will largely depend on whether they enter into cooperation with local telecoms. Implementing such a scenario poses many limitations for satellite internet providers. With independent distribution, the sky is the limit.

Out-of-this-world speed

Out-of-this-world speed

It should also be remembered that the success of these groundbreaking ventures will be determined not so much by the price of subscriptions as by the quality of the services provided and their competitiveness relative to the offer of telecommunications companies. According to Speedtest, considering only the performance of mobile networks that our smartphones can access under GSM technology, the average data download speed is 32 Mbps. How does satellite internet compare?

The filing that Elon Musk's company submitted to the American certification authority in 2016 described an internet service that would ensure data transfer at up to one gigabit per second and latency between 25 and 35 milliseconds. Since recently, SpaceX has also been working with the US Air Force, testing a pilot program for internet access via a satellite network. The tests began in early 2018, using only two satellites. This made it possible to achieve speeds of up to 610 megabits per second. Similar speeds have recently begun to be offered by operators using terrestrial data transmission technology, whose infrastructure is built on fiber optics.

And when will we finally see such a service? According to SpaceNews, the constellation of Starlink microsatellites belonging to SpaceX will begin offering its own satellite internet service this year. It is not known, however, when the other operators will present their offer to consumers. One thing is certain – if the plans described above for developing Earth's orbit come to fruition, then within just a decade a handful of companies will place more satellites there than all the great powers combined since the first satellite, Sputnik 1 in 1957.

Summary

Billionaires Jeff Bezos, Elon Musk and Mark Zuckerberg are conducting a space race for dominance in Earth orbit, planning to launch thousands of satellites that will provide global internet access. Project Kuiper (Amazon), Starlink (SpaceX) and the initiatives of OneWeb and Facebook are meant to eliminate digital exclusion, but above all to open new sales markets and sources of income. SpaceX expects $22 billion in annual operating profit by 2025, and tests with the US Air Force achieved a speed of 610 Mb/s. Experts such as Sascha Stockem of Nethansa point out, however, that a subscription cost of around $80 may be unattainable for residents of the regions that were supposed to be the main beneficiaries of this undertaking.