Elon Musk’s SpaceX is among the many companies competing to provide satellite-based internet service in Southeast Asia, seeing it as the answer to the slow, unreliable communications the region’s vast number of netizens have been putting up with.
“Starlink approved by The Philippines,” Musk tweeted as soon as the country’s telecommunications regulator approved SpaceX’s Starlink satellite internet service on May 27. Starlink is expected to make its Southeast Asian debut within a few months.
Opportunities are growing in other parts of Southeast Asia, and SpaceX is poised to move in. The US company plans to launch service in Indonesia, Malaysia, Vietnam, and Myanmar around 2023.
Satellite-based internet offers clear advantages in a region with numerous islands. The Philippines is comprised of over 7,100 islands, while Indonesia has over 16,000. Many remote islands and areas outside big cities lack sufficient internet access, and satellites offer an easier way to connect these areas compared with laying undersea cables.
In January, a volcanic eruption cut communications between the remote Pacific island nation of Tonga and the rest of the world. Satellite internet service might have kept the country connected.
Satellites also could improve the internet experience. Starlink offers download speeds of 100 to 200 megabits per second, according to the country’s regulator, much faster than typical internet service in the region. The speed owes to the low altitude of Starlink satellites: 500 km to 2,000 km, compared with nearly 36,000 km for those in geostationary orbit.
Southeast Asians spend lots of time online. Average daily internet use is over ten hours in the Philippines and eight and a half hours in Indonesia, topping the worldwide average of about seven hours, UK research company We Are Social said.
In terms of download speeds via mobile devices as of April, Indonesia ranked 100th at 17.96 Mbps and the Philippines stood 95th at 19.45 Mbps out of 142 countries and regions, according to the Speedtest Global Index.
The Philippines has been aggressively courting satellite-based internet providers, taking such steps as revising laws to make it easier for foreign companies to enter the market.
“Their system will augment as well as complement existing broadband capacities,” Ramon Lopez, the Philippine trade and industry secretary, said of the launch of Starlink in the country. “This will further capacitate micro, small, and medium enterprises, facilitate online learning, e-commerce, and fintech.”
Other companies are not sitting idle. Philippine telecom giant PLDT said it successfully conducted the country’s first on-orbit testing of high-speed broadband connectivity in February using a satellite of Canada’s Telesat. This satellite orbits at a low altitude, like Starlink’s.
Local rival Globe Telecom signed a memorandum of understanding with US satellite operator AST SpaceMobile on providing service in the Philippines.
Japan’s Sky Perfect JSAT group has begun providing satellite-based internet service in the Philippines, with the service being used for remote monitoring of wind turbines in the northern part of the country. Singapore-based startup Kacific struck a deal with the Asian Development Bank on a USD 50 million loan for a communications satellite project.
One of the hurdles is cost. Starlink offers plans priced at USD 110 or USD 500 a month, but some mobile internet plans in the Philippines cost PHP 300 (USD 5.67) or less for 24 gigabytes of data over 30 days.
As such, satellite internet is expected to be used initially by companies in remote locations as well as government agencies, the military, and the media as an emergency backup. Such services likely will spread among ordinary users once more players enter the market and create price competition.
Southeast Asia’s geopolitics are also raising interest in communications satellites. The Philippines and Vietnam are locked in a dispute with China over the sovereignty of the Spratly Islands in the South China Sea. Satellites could provide internet access in case land-based lines are severed.
Starlink made headlines earlier this year by offering access in Ukraine while it was under attack from Russia. Ukrainian Vice Prime Minister Mykhailo Fedorov on February 26 made a plea on Twitter for the launch of Starlink service, and communications terminals arrived in Ukraine just two days later. The ability to start service quickly is a major advantage in emergencies.
China is wary of Starlink. The South China Morning Post reported that Chinese researchers are calling for Starlink satellites to be disabled or destroyed if they pose a threat to national security.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.