Elon Musk is Disrupting Telcos

The biggest satellite network in existence

It wasn’t great news for telecommunications companies when Elon Musk started talking about launching 4,425 satellites into space. It was even worse when his company SpaceX actually started to do it. The satellites, which are the size of a car, are designed to enable fast, low-latency Internet for the masses. In September 2016, the plan suffered a serious setback when a Falcon 9 rocket burst into flames on a launch pad. Undeterred, SpaceX began launching rockets again that same month.

Providing super-fast, accessible Internet for everybody has long been on Musk’s agenda, and by setting up the biggest satellite network in existence, this dream could become a reality. Characteristically, the serial entrepreneur has taken it one step further. In April 2016, SpaceX successfully recovered its first reusable Falcon 9 rocket. As of this month, the company has recovered their seventh rocket – and it’s about more than hardcore recycling.

Why are reusable rockets so important?
Reusable rockets drastically reduce the cost of getting satellites into space because there’s no need to fork out for new equipment over and over again. By reducing overheads, SpaceX will assemble their satellite fleet in less time and at lower expense than originally thought. Through this, the company has created a scalable way to facilitate high-speed, low latency internet. The low orbit of the satellites directly addresses the current problem of high latency – in other words, slow data transfer due to the distance between Earth and satellites. Musk claims that speeds could reach one gigabit per second (Gb/s), massively exceeding the current global average of less than six megabits per second (Mb/s). It’s not hard to see why the venture has been dismissed as ‘too optimistic’. But the exciting thing about the project, ambitious as it may be, is that it could really work. This is partly due to recent developments in wi-fi technology, which will play an important role. Last week, engineers at Tufts University revealed a high-speed terahertz modulator that could help to deliver powerful connectivity up to 100 Gb/s. A hertz (Hz) is a unit of frequency equal to one cycle per second. A terahertz (THz), on the other hand, is equal to a trillion cycles per second. It goes without saying that the Tufts modulator enables impressive data speeds. Team this with advanced chip technology, and the potential of THz frequencies is huge. However, SpaceX isn’t the only company with their eye on mass internet provision. Musk is already facing competition from OneWeb, a venture backed by Virgin, Qualcomm and Airbus. Boeing is also developing its own broadband network.

How disruptive is ubiquitous Internet?
Once assembled, the 4,425-strong SpaceX fleet will make Internet access faster, cheaper and available to almost everyone. In colloquial terms, that’s a slap in the face for established telecommunications companies. If Musk’s venture succeeds, broadband providers that currently use fibre and other cabling solutions simply won’t be able to compete. In short, ubiquitous Internet won’t just disrupt telcos, it will kill them off completely. Musk isn’t the only innovator that they’ll have to deal with, either – OneWeb, for example, aims to provide low latency broadband by 2019. By 2027, they want to fully bridge the digital divide. This refers to the gap between tech-savvy societies that have access to information technology, and tech-deprived societies that don’t. The Internet is undeniably one of the biggest disruptions of all time, and the disruption caused by mass connectivity would be unprecedented. The quality of education in less developed areas would rocket, and have a knock-on effect on quality of life. On top of that, widespread connectivity is a massive enabler for the ever-growing Internet of Things. Every trend brought about by technology would be accelerated as new consumers and corporates enter the digital sphere. The global economy would be transformed, alongside society itself.

Today, less than half of the world has access to the internet. SpaceX’s giant satellite fleet is primed to change this, offering connectivity to over seven billion people. By reusing rockets, the company has made this far more achievable in terms of cost and plausibility. At the moment, this is the killer advantage that SpaceX has over competitors. Instead of racing against each other, perhaps companies should work together to create even bigger connected satellite fleets. Their ultimate goal is the same – to replace legacy telcos and implement Internet for everybody. Mass Internet provision (let alone super-fast, low latency Internet) will propel us even further into a digitalised world. It’s good news for essentially everybody except for traditional telcos and information-restricting governments. If anything, the race to provide ubiquitous, quality connectivity is a firm reminder that data really is power. If SpaceX can pull it off, then they’ll shake the structure of global society to its core.

How will telcos respond to the threat posed by SpaceX’s satellite fleet? Are Musk’s plans ‘too optimistic’? Will ubiquitous internet access bridge the digital divide? Comment below with your thoughts and opinions.

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