Starlink’s Victory Lap, Amazon’s Sprint, and GEOs Crashing

Full Transcript

Don Kellogg 0m10s

Hello, and welcome to the two hundred and seventy third episode of the week with Roger, conversation between analysts about all things things telecom, media, and technology by Recon Analytics. I'm Don Kellogg, and with me as always is Roger Entner. How are doing, Roger?

Roger Entner 0m22s

Hey. I'm good. How are you?

Don Kellogg 0m23s

I'm hanging in. Let's talk about a report you just wrote on satellite in The US and how Starlink is gonna lord over everybody.

Roger Entner 0m33s

Well, I wrote my first long report in, like, twenty years about the situation in the satellite business and how it interacts with wireless carriers, speed and everything. And I also wrote shorter note, is up on our webpage, and it should be up with light reading as well, called Politics of Survival. So what I'm talking about here is like when you realistically look at it, right, Starlink won. Starlink has 8,000 satellites in the sky, provides global service, does it everybody here in rural markets. And then we have AST, and we have now Amazon LEO launched.

Roger Entner 1m22s

And realistically speaking, they're coming late, and they may never catch up. So why do these guys live? And the answer is basically that both carriers and the government make the decisions. They don't wanna live in a world where Elon Musk rules the sky. Right?

Roger Entner 1m43s

AT&T and Verizon bet on on AST Mobile. AT&T a lot more with a with an exclusive contract until 2030, and Verizon then doubled down with a 100 another $100,000,000 investment so that there is an alternative, that there is a a competition for direct to sell, d to c, or other people call it d to d, direct to device communications. Right? Because you don't wanna be dependent on Elon Musk, who is a genius, who is a modern day Thomas Edison, if not more so, but who is mercurial. You know, you saw it in the hot and heavy love affair that he had with Donald Trump, and then that went off the rails, and they didn't call each other nice names.

Roger Entner 2m32s

And the FCC gave Starlink a lot of breaks that it may not have given otherwise. And now the Department of Defense has been given the instruction we need to dual source, or at least dual source, right, with the Golden Dome project. So not only the carriers are trying to multi source or to at least dual source, but also also the government does. And it's also good policy. But when you look at Amazon LEO, they have right now 153 satellites in space.

Roger Entner 3m7s

By the end of the year, it will be 180. According to the agreement that they have with the FCC, they need to have more than 1,600 satellites up mid next year. There's no way this can be physically done. And so they need a waiver from the FCC. At the same time, Amazon now has won the most locations for BEAT funding.

Roger Entner 3m31s

And the second most locations is Starlink, right? And by the way, Leo aggressively undercut Starlink on BEAT locations by a factor of three. And so there's a lot of interplay going on where, both corporate and government decisions, we have a market with probably three players. I don't see how everybody else can live in this, but we seem to have, like, three player market. And so that's what I'm largely talking about in that note, and I'm going a lot deeper and expand a lot.

Roger Entner 4m6s

It's like 60 page paper. My apologies. But it's 60 good pages that I wrote on that longer paper. And so we have three player market, and it's personality driven.

Don Kellogg 4m18s

If you look at another portion of this that you wrote, right, the Amazon Leo actually won more locations on Bead than Starlink did. Right? I mean, it's roughly the same amount, but, like, slightly more. So for a provider that, you know, isn't really at production scale yet, that's a pretty powerful backstop. Right?

Roger Entner 4m37s

Yeah. And they let them bid. Right? Right. They let them bid on the promise that this will be up.

Roger Entner 4m43s

And the question is, how are they gonna get them all up?

Don Kellogg 4m47s

Well, the history of some of these development programs is that this isn't the first time that somebody that doesn't have capability has been allowed to bid, and it doesn't always work out. Right? So, I mean, there's still a chance that if they're not quite where they need to be in time, right, what happens there?

Roger Entner 5m1s

Well, then then they get a waiver, basically. And and here, the government becomes a a partner. Right? Because at the same time, you can't let the program fail because the Republicans eviscerated the Biden BEAT program, redid it in how they wanted it, and now they own it. And we have to remember, in the markets where either Starlink or Amazon has all these things, those are overwhelmingly Republican locations.

Roger Entner 5m37s

And so if this fails, it fails for their own voters. And that is a strong incentive, especially and you always have to remember, there's also government oversight and congressional oversight, and the congressional oversight comes especially from the Senate, and every senate is a rural senator, and where Leo and where Starling Guan is in rural America. And it's a great technology for that, and it should be done there.

Don Kellogg 6m6s

Assuming you don't live around too many trees. But yeah.

Roger Entner 6m8s

Well, then

Don Kellogg 6m9s

It's better than the alternatives. Right?

Roger Entner 6m11s

Then cut down your trees. You know? We have to all make sacrifices. You want Internet or you want trees? In this country, right now, Internet wins against trees any day of the week, at least if it's on private property.

Don Kellogg 6m24s

Yeah. I think for most folks, it's a fair statement. So what else should we know about this situation?

Roger Entner 6m29s

Well, it's gonna be very interesting because the b to c exclusivity with T Mobile is only for one year after launch. So then they're fair game. Also, if you remember, last week, we talked about, you know, the persistent rumors that Starlink wants to become its own mobile service, and I'm glad that some of the more enterprising people have found the trademark for Starlink Mobile that has been filed. Congratulations that you found it too, for mobile and satellite service, and there's also for quite some time an MCC, like an international calling code or network code, that's also associated with Starlink Mobile, that also allows or makes provisions for mobile and satellite service. So as I said last week, that's like the interest that I talked about.

Roger Entner 7m27s

But getting an MCC and getting a trademark is not very expensive. Bidding for spectrum, buying spectrum is where things get expensive. And so what's a very important benchmark is will Starlink or SpaceX bid for the upper c band? We still have some people said like, oh, but how about low band spectrum? Do you need low band spectrum?

Roger Entner 7m51s

Well, if you remember the 800 megahertz, I think the 800 megahertz band is still going around somewhere. I wouldn't be surprised if he picks that up. And what else? Yeah. Five g NTN, like, terrestrial network, that is coming in 2027.

Roger Entner 8m9s

The dirty little secret about satellite, about D2C satellites right now, this is all four g. Five g is coming in 2027. You know, since we are think we said we would stop talking about Charlie Hogan. I think if that keeps on giving, he's now has now been renamed to Elon Musk, and what is he gonna do with satellite?

Don Kellogg 8m30s

Well, I think the ghost of Charlie may be alive with Amazon too. If they can't hit their build out targets and they need a waiver, that's a very kinda Charlie sort of thing to do too.

Roger Entner 8m40s

Yeah. But Charlie owns a couple percent of Starlink. So I don't think he wants to help Amazon unless he falls out with Elon. Who knows? Yep.

Roger Entner 8m49s

Just when you think we're running out of popcorn, you know, there comes another truckload.

Don Kellogg 8m54s

Yep. Alright. Well, I'm sure it'll, uh, continue to be the gift that keeps on giving. So we'll, uh, we'll keep an eye on it moving forward.

Roger Entner 9m0s

Alright. Thanks, Roger. Thank you.

Don Kellogg 9m2s

Talk to next week.

Roger Entner 9m3s

Bye bye.