Here’s an interesting comment I heard from an MWC attendee: “It’s interesting that the most buzz from the show came from a topic, Starlink Mobile, that represents telco Disintermediation 2.0”. I think it’s an interesting point.
Telcos have complained for decades that others have exploited their connectivity assets, demanding low prices for Internet, then building high-margin services on top. This was the original meaning of “disintermediation”, and it’s interesting that the term is now being applied to a satellite service set that doesn’t even ride on telco connectivity, but rather augments it. But in a more philosophical sense, it may be valid. Could satellite players offer emergency connectivity to telcos just to demonstrate to users that satellite is almost always available, and then expand that “emergency-only” role to eat persistent service dominance?
The “Featured Story” from LightReading for the show over the weekend was “At MWC, SpaceX execs tout Starlink V2 – and a key carrier partner for it.” SpaceX, speaking at a keynote, talked about the value of universal connectivity, not only broadband in areas where terrestrial infrastructure can’t serve, but also for “life-saving connectivity”, meaning emergency communications in those same areas. I think that’s a valid story, but it’s also one with implications.
How do you use mobile communications? Most of the people who tell me about their personal use (roughly 80%) of mobile combines “Internet” applications that in most cases are (or could be) connected via WiFi, with spontaneous personal calls/messaging that very often has to connect via cellular service. That mirrors my own usage; I don’t need mobile broadband most of the time because all I do when “mobile” is answer calls or texts.
OK, suppose that SpaceX or somebody else (like Amazon or Google, for example) offers nothing except mobile call and text? I get a phone number that always works, everywhere. I drop my normal mobile service completely, and simply connect via WiFi in fixed places where I really use other connected applications. Where does this leave telcos?
That telcos need to cut deals to offer customers for universal emergency connectivity shows that mobile services can’t fulfill all connectivity. Satellite services can, particularly if we limit their target to calls and texts only. If we assume that a satellite service was a part of a kind of VPN that would automatically (via the smartphone or device) connect via WiFi when there was such a service available, we’d have a model that would use relatively little satellite bandwidth, and one that for many could replace traditional mobile services.
Who might want this? Think almost any MVNO, but in particular some player like a cable MSO, some of whom already have WiFi extension to mobile service options. Or Google, whose Fi service uses T-Mobile cellular, who offers satellite emergency connectivity on some recent Pixel models, and who offers international connectivity. Anyone launching Internet satellite service, of course. Who doesn’t, or shouldn’t? Telcos.
Many of the younger people I know wouldn’t like this because they rely more on social media than on calls and texts, but could social-media providers offer some feature limitations in order to encourage satellite providers to integrate them into their call-text VPN? Why not?
Mobile services are used in different ways by different people. When public WiFi was limited, there was a lot of value to full-scale mobile broadband. Today, less true, particularly for those who don’t use social media as a substitute for continuous physical presence.
So isn’t this a justification for the 6G integration of satellite service and perhaps even WiFi with mobile services? Not unless the telcos want to accelerate disintermediation of their mobile services. The smart play for satellite players would be to encourage this sort of integration, in order to take advantage of WiFi or even mobile service to offload higher-bandwidth applications or service in areas where there are a lot of users who could load up satellite channels.
We could, nay probably are, headed to a time when instead of satellite being a small-scale emergency add-on to mobile service, mobile could be a specialty off-ramp for satellite, something to use if WiFi isn’t available to serve the mission. I think that telcos could have had significant influence in this area, but it’s too late now. The old adage that telcos fear competition more than they value opportunity has reared up and bitten them, and hard.
Satellite voice services came along in the early 1980s in response to high long-distance rates, which telcos kept in place to protect their profits. The telcos eventually abandoned those rates, because voice traffic had a minimal impact on network capacity in the Internet age. But their institutional memory kept pinning satellite providers as the competing enemy, and so they shunned making deals with them to extend coverage to places where even mobile infrastructure couldn’t profitably serve.
Similarly, telcos could have recognized that social media created an alternative to many calls and texts. If they had, might they have launched social-media-linked services that integrated call/text services into the social media site, rather than have the sites build a parallel service? Sure, but wary of “disintermediation” by OTTs who they saw as predatory competitors, telcos hunkered down on the old, and by doing so fostered the new in addition to losing the opportunity for new services.
Telcos, friends, are too slow, too cautious, too protective of the remnants of the past. Their own trade shows are becoming a showcase for others who are faster, more risk-tolerant, less rooted in current thinking and fearful of change. They’re increasingly controlling the agenda, and the last of the opportunities for telcos to seize any high ground is passing away.
If the satellite impact is real, it would destabilize the telco mobile services business, which is their most profitable, so it would destabilize the telcos themselves. We would almost surely have a major profit and infrastructure investment problem. Thus, there’s a public policy point to consider here. What happens if the current trend continues? Telcos would eventually have to become public utilities in the old regulated sense, with a regulator-set pricing and profit level. Or even be a government monopoly. Sound like pre-1980s, pre-privatization, thinking? It is. I think that what we’re seeing is that we went about those reforms wrong, just as we’ve done in many areas in “deregulating” other utilities like electricity, water, and gas, and perhaps even things like mail services. Is there a real, and unappreciated, risk in deregulating essential services? We should be asking that now, before it’s too late.
