People are losing more and more interest in cable TV. With streaming services taking over the industry, cable providers have been facing a big problem for quite some time now. Statista.com’s latest statistics have shown a 27% rise from 2019 in the number of Americans that already cut the cord. The estimated number will continue to grow at a decelerating rate, as customers with cords to cut are becoming scarce.
More and more customers are preferring streaming services such as Netflix, Hulu, Planet Network, and Amazon Prime. Some cable providers that offer internet services may not get worried as their internet subscriptions would dramatically increase, but will it?
Starlink is the new satellite broadband project developed by SpaceX. This project is planning to offer its beta access in the United States this October 2021 and is starting to accept pre-orders from Canada. Starlink was also granted by the Federal Communications Commissions an $885 million subsidy and a whopping 642,925 new customers.
According to a survey conducted by Reviews.org, among 500 American internet subscribers aging 18 years old and above, an estimated 64% are willing to unsubscribe to their current internet providers to switch to SpaceX’s Starlink. Furthermore, Americans who are planning to immediately switch to Starlink as it becomes available is at 51%.
Every SpaceX Falcon 9 Starlink launches, the access to Starlink would expand as well. The most recent launch was made last February 4, 2021, which reached its 1000 Starlink satellites milestone. According to Starlink, they would be able to provide broadband access worldwide by the end of 2021.
If the surveys were accurate and the internet users will ditch their current providers, it can deal serious damage to both the cable and internet industry. However, it would be excellent for investors eyeing SpaceX’s Starlink. But before anything else, you should take note of some of these facts.
Let’s start with Reviews.org. Reviews.com reckon that there’s a sample error of ±4.5% because the size of the survey was small. Still, Reviews.org is 95% positive about their data results. Let’s say the organization overestimated the users’ preference of around 4-5%, it would still indicate that major internet service providers can lose up to 46% of their business.
Next, the price. According to Reviews.org’s report, 44% of their respondents are willing to pay $99 per month only if they are given payment options for the equipment fee of $499. This shows that the 51% of consumers that are interested in switching to Starlink comes with conditions.
Lastly, let’s talk about reliability and speed. These two factors are most important because it is what the consumers are paying for. During its beta state, Starlink subscribers are experiencing short periods of internet downtime, while getting as low as 50 Mbps for their $99 monthly fee. It may be good enough for people living in rural areas as it could be better than any terrestrial internet service providers. For people living in major cities, this can be a problem because some providers charge as low as $40-50 for 200 Mbps.
Considering the $499 upfront cost for the equipment, they might stick with their current ISPs. But, Starlink guarantees its potential consumers that the internet speed will increase as they complete their satellite constellation. SpaceX has high hopes that its satellite internet will be able to provide its consumers with 1-gigabit speed. By then, it would be a great competition with $70-80 offered by the current ISPs.
SpaceX’s Starlink may or may not be a huge threat to the current internet service providers, but it is how these major providers will respond to the competition SpaceX is putting up. If those surveys were accurate and were followed, Starlink would deal current internet providers significant damage.