NBN to Starlink: If You Can't Beat 'Em, Join 'Em?

Australia’s publicly-owned broadband infrastructure provider NBN Co has said it could be forced to ditch its GEO satellites for LEO constellations due to the poor performance of it network and the leakage of customers to rivals that use Starlink.

With sales of its ten-year-old Sky Muster service, powered by GEO satellites, losing out to local privately owned competitors that use Elon Musk’s Starlink, NBN’s GEO-based service is struggling in a market that lives and dies on connectivity speed and latency.

The issue, which was highlighted in a Senate committee inquiry in February, illustrates how public investment in NBN, which was originally a fiber-to-the-node and home service, is being challenged by wireless connectivity.

The Australian Government invested in fiber infrastructure as national building infrastructure when it appeared to be the best technology, but wireless networks are developing rapidly driven by LEO satellites.

“We’re a statutory infrastructure provider, so we need to be able to provide customers who are currently served today by GEO with an alternative and the logically next step is LEO,” NBN chief executive Ellie Sweeney said to the Australian newspaper in February.

AUD3 billion upgrade

The Australian government, which owns NBN, has said it will inject another AUD3 billion into the provider to upgrade homes on outdated copper networks so that Australians have access to “fast, reliable and affordable broadband.”

This was projected to deliver faster internet to more than 600,000 households, with more than 90% of users being directly connected to the fiber network rather than slower copper cables. It is claimed that this would deliver an additional AUSD10 billion to Australia’s economy in the ten years from 2030.

“We need to be able to provide customers who are currently served today by GEO with an alternative and the logically next step is LEO.”

The admission of a potential move to LEO satellites is another big question mark on the success and future of the NBN which was launched around 15 years ago when Kevin Rudd was Prime Minister.

Originally costed at under AUD30 billion, the NBN has blown out to around AUD50 billion by some estimates. The provider made a loss of AUD696 million last year, with revenues at AUD2.87 billion.

The Coalition parties, which are now in the Opposition, have previously said they would privatize NBN if they won Government at an election due by May this year, but have since reversed this pledge.

Around nine million Australian households and businesses can access the internet through the NBN, with private providers leasing capacity and reselling it in bundles. 

Delivering affordable broadband

The NBN has long been mired in controversy, originally due to the decision by the previous Coalition government to build a fiber-to-node network rather than fiber-to-the-home which was more expensive but more future-proof.

Any move by NBN to LEO satellites has been criticized by private providers, with one of the largest TPG saying the Government had no role in building more networks as the uptake of satellite and 5G services increased.

“The primary focus of NBN should be on delivering affordable broadband to Australians, with investment focused on areas not served by existing infrastructure,” the spokesman said.

“Part of NBN’s purpose was to launch a rural broadband service because no other commercial operator would. With commercial operators doing their own deals with LEO sat providers, this no longer holds true,” a TPG spokesman said.

“Unless NBN can deliver broadband services in rural areas at considerably lower prices than commercial operators, it makes little sense spending taxpayer funds creating middlemen wholesalers.”

NBN’s technology dilemma comes as Australian broadband providers are turning to Starlink, which has around 7000 satellites in orbit with plans to increase this to 40,000.

Major telcos Optus and Telstra are offering Starlink connectivity through satellite dishes, and both have recently announced deals for straight-to-mobile services when they become available.  

Image credit: iStockphoto/yucelyilmaz