Who’s afraid of Elon Musk? Not the local telco tycoons

MANILA, Philippines — Are telco tycoons Manuel V. Pangilinan, the Ayalas, Dennis Anthony Uy and Dennis Uy worried that the entry of Internet from space Starlink, owned by the richest man on earth Elon Musk, will cost them subscribers?

Not a sweat, their executives said, who noted that Starlink may be able to provide uninterrupted connectivity anywhere in the Philippines, but subscription to it will depend not much on reliability but on the cost of service.

In July SpaceX senior manager for government affairs Rebecca Hunter announced that Filipinos can start experiencing the Starlink service within the year, most probably December.

SpaceX operates Starlink, which banks on its constellation of low earth orbit (LEO) satellites to beam Internet to the surface. Starlink dishes can be mounted on top of roofs to connect to these LEOs, making the service accessible and available even to unserved areas.

However, the cost of making, deploying and operating these LEO satellites demand the treasure chest of someone as filthy rich as Musk. Starlink had to sell its equipment at $599 per unit, while the service goes for $99 a month.

Globe president and CEO Ernest Cu said operating an LEO satellite costs too much that the US government denied SpaceX’s latest request for subsidies.

In August, the US Federal Communications Commission turned down the application of SpaceX for $885.5 million in subsidies to strengthen its 100/20 Mbps service in 35 states.

However, the US government rejected the request on two grounds: first, Starlink’s upload speed has fallen below the committed 20 Mbps and second, it requires $600 for a subscriber to own a dish.

“We are exploring but the pricing is still too high for that kind of technology. If we just take a look at recent releases in the US, Starlink lost its subsidies because it was not viable for US to cover it,” Cu told the STAR.

Whereas Ayala-led Globe has yet to hop on the LEO bandwagon, Pangilinan-owned PLDT Inc. has used satellites for years to provide connectivity in remote areas, where it is most difficult to put up land infrastructure. With Starlink in the mix, PLDT vowed to explore the use of LEO units in delivering Internet in underserved areas.

PLDT vice president and head of network design studio Arvin Siena said PLDT has maximized the use of geostationary (GEO) satellites to service far-flung locations.

The next step for PLDT, Siena explained, is to jump on the LEO train to stay ahead of the competition.

“Currently, our GEO satellites are being used for remote connectivity that are about 36 thousand kilometers from the earth which in effect has higher latency,” Siena told The STAR.

“With the growing interests on LEO satellites—which is 35 times closer to earth than GEOs—we see this as opportunity to offer latency sensitive services like e-gaming, video conferencing and real-time enterprise applications in remote areas,” Siena added.

Last February, PLDT and Ottawa-based Telesat tested the first LEO satellite in the Philippines that registered a download speed of 100.46 Mbps and upload speed of 95.62 Mbps.

As a next step, Siena said the telco giant would assess the cost of delivering LEO-based connectivity.

Dennis Anthony Uy, CEO and co-founder of Converge ICT Solutions Inc., said a firm planning to invest on LEO units has to spend as much as P400 million just to deploy one into space.

Given the price tag, Uy asked the government to consider providing subsidies to investors who want to transition to this innovation that could benefit Filipinos in underserved areas.

“In countries like the US, Australia and Singapore, the common infrastructure is spent on by the government. That’s part of not duplicating the high cost of investment [and the governments just allow] the operators to ride on them. End of the day, if the operator is doing low investment, it is benefitting the consumer because the return of investments is faster,” Uy told the STAR.

On the other hand, Dito Telecommunity Corp. chief technology officer Rodolfo Santiago said the telco newcomer is negotiating with satellite operators who they can partner with in adapting the use of LEO units.

“We have been in talks with satellite providers because we anticipate that to cover areas which are beyond our commitments will entail using satellite technology,” Santiago told the STAR.