Tim Courtney: They’re not commercial yet, but they’re going to be a formidable competitor in this space, I believe. If you go on their landing page, their webpage, they’re saying all the right things, their commitment to quality, the people worldwide, the speed, cost, everything as a consumer you’d want to hear, it’s definitely a good sales pitch that they’re presenting to the public right now.
Jeff Johnston: That was Tim Courtney, vice president sales and strategy at Further Enterprise Solutions, talking about Project Kuiper, Amazon’s upcoming satellite internet service.
Hi, I’m Jeff Johnston and welcome to the All Day Digital podcast where we talk to industry executives and thought leaders to get their perspective on a wide range of factors shaping the digital infrastructure market. This podcast is brought to you by CoBank’s knowledge exchange group.
SpaceX’s Starlink internet service has over 4 million subscribers since its launch in 2020, and in 2025, Amazon plans to enter the satellite internet market with its Project Kuiper service. We believe most Starlink customers are located in unserved areas. But over time could these tech giants who are behind these satellite networks become a bigger threat to fixed-line broadband operators?
I invited Tim onto the podcast to get his perspective on how satellite internet could evolve. Tim has extensive experience building wireless networks and developing strategies for a wide range of companies in the wireless ecosystem. He’s my go-to guy for this kind of stuff. Please note that all of Tim’s comments are just his personal opinions.
So, without any further ado, pitter patter, let’s hear what Tim has to say
Tim Courtney, it’s great to have you back on the podcast again. How’ve you been doing?
Courtney: I’m doing well, Jeff. Good to be back. Looking forward to talking some tech with you today. Thanks for having me back.
Johnston: What I wanted to spend time today talking about is the satellite industry. To start us off, Tim, maybe you can just give us an overview for those who may not be that aware of the industry and who the key players are, as it relates to satellite home internet connectivity.
Courtney: Yes, as it relates to residential satellite connectivity, you got HughesNet, who’s been there for a long time now. They’re one of the pioneers, one of the leaders in the industry there. Obviously, the one that gets a lot of the news right now is Starlink and Viasat is also in that picture, but Starlink is probably getting the bulk of the press right now with all their launches, with all their satellites going up in the air right now. Those are probably the three key names for North America, I would say, or the U.S. as it relates to commercial residential service.
Johnston: Then, what about Amazon? They’ve got this thing called Project Kuiper if I’m saying it correctly, making a lot of noise about offering internet service
Courtney: They’re not commercial yet, but they’re going to be a formidable competitor in this space, I believe. If you go on their landing page, their webpage, they’re saying all the right things, their commitment to quality, the people worldwide, the speed, cost, everything as a consumer you’d want to hear. It’s definitely a good sales pitch that they’re presenting to the public right now.
Johnston: So if I think back, Tim, just over the years, there’s been a lot of bankruptcies, haven’t there, in the satellite industry?. Then again we’re seeing some companies be very successful. If you look at Starlink, their growth has been pretty impressive. They launched in 2020, in October, and now they’ve got 4 million subscribers as of September of this year. They seem to be doing well, but why, if you look back to the bankruptcies of years ago to today, why do you think that it looks like this industry has matured and it looks a legitimate industry and a legitimate service?
Courtney: Well, I think most of those bankruptcies stem from more the voice and maybe the low-speed data aspect of the initial satellite rollouts. With GlobalStar, that was spent through bankruptcy as well. So all the companies that were trying to compete with the cellular networks, I think, came up with a big headwind there, so to speak.
I think there’s going to be a lot of investment in fixed broadband as relates to satellite. There’s the derivatives. There’s the boating market that’s not really fixed versus the RV, more nomadic but from a fixed landline-type connection to your home, I think we’re at the early innings on that.
Johnston: Let’s spend a little bit of time, Tim, talking about some of the specific satellite operators and really more from a value proposition perspective. As I mentioned before, Starlink’s having a lot of success growing their subscriber base by just simply providing internet service where there is none. For Starlink, what can they do to build on this bundling value proposition? Do you see Amazon with Project Kuiper bundling in Amazon Prime? Can we expect to see those types of services bundled in with satellite internet service? I’m not sure what Starlink would be able to do. I guess they could bundle stuff in if you own a Tesla, I don’t know. How do you think about that?
Courtney: I think so. Amazon’s got a lot to bundle with, the Amazon Prime, their whole purchasing, shopping mall, so to speak. They’ve got their TV product, they’ve got their security product. They’ve got a lot of different products they could bundle in with their satellite offering when they do launch.
A pure satellite provider could do a partnership with a mobile phone operator just as AT&T has reached out to the rural communities that provide internet service.
They can offer a wholesale or a bundle, let’s say, of a mobile phone subscription. As we talk, Amazon has so many pieces on the table that they could mix and match. As you said a Starlink, maybe a Tesla tie in so to speak, there maybe their “mobile phone partners” that they’re testing with could be part of that equation.
I think medium-term, long-term that’s going to be a necessary part of the value equation to keep customers sticky. Right now, you’ve got a couple of satellite providers in these rural areas. It could be again, Amazon service. You might have three or four out there, let alone fix wireless. It started rural, went suburban, and now might be going more rural. There’s going to be a lot of tools in the toolbox to serve these customers.
Johnston: When we think about wireless networks versus fixed line networks, we’ve got fixed line whether it’s HFC or fiber. These networks have a lot of what I would call operating leverage. There’s a lot of headroom in those networks to grow. but then when you look at fixed wireless, there’s a limited amount of headroom unless you add additional capacity in the network to grow that subscriber base.
I would think that’s probably the same thing with satellite networks. Don’t they have a limited amount of headroom to add additional customers? I guess what I’m ultimately getting to is, how much upside does a Starlink or a Project Kuiper have in terms of growing their subscriber base and therefore becoming a bigger threat to rural broadband fixed line operators? Does that make sense?
Courtney: It does, but Jeff, as you know you and I, we’ve been doing this since 1G before it was called 1G on the mobile phone side of things. We’re up to 5G already. We’re talking about 6G. All these satellite providers, they’re taking advantage of the best and brightest engineers and technology right now. The same scenario where we do cell splitting on the mobile network to add more capacity, we basically can do the same thing in the sky with satellite. Now, does it take longer to get satellites up in there? Absolutely. Does it cost more money? Potentially.
But if you amortize that over the number of subscribers, they probably think it’s a good business decision. As you’ve seen, when you launch a brand-new satellite network with no subscribers, the speed test is phenomenal. As more people get on it, it slows down. No different than those 3G and 4G networks. Jeff, you and I were keeping an eye on-- the 4G was flying speed-wise and it’s going to slow down, did slow down as more people got on it. I don’t think that technology or the capital is going to slow things down here. I don’t think Amazon would be chasing this business if they thought there wasn’t a good return to be made there.
Johnston: Do we get to a point where in a town near you, you could see a competitively priced service from Starlink, comparable to what you’re paying to your local fiber provider, let’s just say, and maybe that’s bundled with an AT&T smartphone and maybe that’s smartphone got lots of satellite technology in it as well, and they could come to these markets with these bundles and disrupt these fixed line providers.
Courtney: You could, but if satellite was so successful in an area, in a neighborhood, in a city, then you’d see the local ISP would have to make decision. Do I bring in fiber, which is the ultimate technology solution and/or does one of the major wireless carriers market heavily their fixed wireless offering? No different than what T-Mobile is doing with their fiber partnerships I would say. T-Mobile was 100% wireless, now they’re wireless and some fiber. I would say just as the mobile started in urban and slowly crept out to rural, the satellite is rural trying to encroach on to suburbia. You’re going to have those rings around the major city where I think you’re going to have the deepest competition between all the technologies, be it satellite, fixed wireless, and you probably don’t have a cable, a physical cable there because if you did and the carrier wasn’t greedy, they’d probably already be a subscriber on copper, coax, fiber, whatever the technology of that neighborhood is.
Johnston: Just to be clear, from a technology perspective, you could see a scenario as-- I’ll just go back to Starlink for example, as that network continues to add subscribers, as they enjoy better economics as a result of that, as they invest more money into satellite internet technologies, antenna technologies, et cetera, , the cost to them will go down and then could it get to a point, again, looking back at what we’ve seen on the wireless side, could it be a fixed wireless like type disruptor, I guess ultimately to fixed line broadband operators from a technology perspective? Is there a path to that, I guess?
Courtney: There would be a path, but if I was the incumbent ISP and I knew someone was charging $120 a month, I might come in at $100 or $110. If it was just data pipe to data pipe, the least path of resistance would just be lower the price.
Johnston: No, it makes total sense. Well, Tim, look, this has been great as always providing a ton of insight. Certainly appreciate your time today. Hey, look, before we wrap it up, if you’ve got any final thoughts, comments, anything that you want to touch on here to close this out that we didn’t talk about, the stage is yours.
Courtney: No, just we’ve got some big names coming into the satellite internet space. It’s exciting times for rural areas across the globe to get on to the internet super highway here. There’s going to be creative solutions to use that network for fixed internet connectivity, some are going to use it for mobile as a derivative offering as well so there’s definitely exciting times in this mobile satellite convergence we’re living through right now. I appreciate your time, Jeff.
Johnston: Listen, great having you on, Tim. Thanks for your time. Take care.
Courtney: You got it.
Johnston: A special thanks goes out to Tim for being on the podcast today. Low earth orbiting satellite internet service from SpaceX is a great solution for the unserved – it’s much faster and reliable than GEO satellite service. But its cost structure and network performance are no match for fiber networks. And unless Amazon gets very creative with a bundle and uses Project Kuiper as a loss leader to drive its Prime and AWS businesses, it’s hard to see satellite internet being a disruptive technology.
Hey thanks for joining me today and a special thanks goes out to my CoBank associates Christina Pope and Tyler Herron because without them there wouldn’t be an All Day Digital podcast. Watch out for our next episode.
