Starlink doubles prices

The generic name for vacuum cleaners really should be Spanglers. James Spangler, an asthmatic janitor in Ohio, invented and patented the “Electric Suction Sweeper” in 1907 to save himself from dust. Spangler sold the patent to some guy called William Hoover.
For almost a century, the first vacuum cleaner company most people could name was Hoover. This was despite the efforts of competitors pitching rival Goblins, Bissels and Nilfisks.
A similar thing has happened with business aviation connectivity. “A couple of years ago, a little-known fellow by the name of Elon Musk started talking to the world about Starlink and how it was coming to airplanes,” says Justin Vena, senior installations sales representative, Duncan Aviation. “He wasn’t just talking to us. More importantly, he was talking to aircraft owners, a lot of whom saw him as a peer. So the quote requests started to change from: ‘We need better internet’ to ‘Give me a quote for Starlink.’”
But last week Starlink may have risked this reputation. The company has announced that from August 7th the cost of its business jet connectivity packages will double.
The SpaceX company has replaced its $10,000 a month “Unlimited Plan” with a $20,000 “Aviation Global Unlimited Plan.” This offers download speeds of up to 1Gbps with a Starlink performance antenna or 500Mbps with earlier generation antennae. This is impressive, even though only gamers and high-frequency traders will ever never need 1Gbps. There are also regional or continental plans.
“They have come out and raised prices way too early,” says one connectivity specialist. “They have definitely had a big bite of the pie, but it won’t last long now.”
To be fair, $20,000 per month is still good value. It is also in line with most of its competitors. This is thanks to Starlink as the introduction of it’s low Earth orbit offering forced many existing connectivity companies to cut prices to compete. Three years ago, you could easily have ended up paying $120,000 per month for a similar amount of data.
The thing that has worried Starlink customers is that there is nothing to stop the company from doing it again. “It is insane. It is everything that its competitors have been warning of,” says one connectivity reseller. “Once they have locked customers in, they could just keep raising prices every year.”
The problem for customers is that switching between satellite providers is not like switching a mobile phone contract. Installing connectivity is not like renting a holiday villa, it is more like buying a piece of land and going through the hassle of building one.
SpaceX has also increased the price of its Starlink Aviation equipment to $200,000 per business aircraft, up from $145,000 last year. This price rise is less significant as the total cost of installing a new system typically costs about $500,000. The bigger issue for people wanting to install a Starlink system is the waiting time of about 20 weeks or more.
Starlink is a very good product. But no single provider is perfect for everyone. Starlink calls it a global product but countries such as China, India and South Africa have not granted Starlink licences. Some foreign owners, including head-of-state aircraft, have also been concerned about relying on a company run by a controversial figure like Musk. Although this is far less of a problem in the world’s biggest business aviation market. Starlink has also been very successful at signing up airlines which may compete for bandwidth with business jets, but it keeps launching satellites to prevent this.
The price rise for business aviation follows on from the SpaceX IPO (which has hopefully created new business aviation customers). The company also lowered an announced price rise for general aviation aircraft.
Starlink’s move comes as the aviation connectivity market is becoming even more competitive. Gogo’s Galileo system, which uses the Eutelsat OneWeb low Earth orbit network, is gaining market share (the company also has a three-year price guarantee) and is being rolled out on more aircraft types. Honeywell is hoping to launch its JetWaveX product in the next few months. This can connect with different types of satellites which could reassure owners who do not want to be locked into a single provider. Viasat is also working on adding low Earth orbit capability with Telesat.
And then there is Amazon’s new low Earth orbit constellation. Musk may now be significantly richer than Jeff Bezos, but Amazon already has relationships with many of the world’s biggest companies and entrepreneurs through its Amazon Web Services (AWS) business. Delta Air Lines (a big AWS customer) will start installing Amazon Leo in 2023. Amazon has the potential to be a big competitor, particularly if it can offer next day delivery for antennae.
Markets are changing faster. Many see the introduction of Inmarsat’s (now Viasat) Jet ConneX in 2016 as changing the standard. Starlink then changed the market again just three years ago.
“If you look at where we’re going to be five years from now, the market leader might be someone that’s not even in the space today,” says one Starlink and Gogo installer. “One thing I can say with conviction is there is more capital coming into the connectivity space and that is good for aircraft owners over the long term.”
After Spangler, it took 86 years (and 5,127 protypes) for James Dyson to transform the vacuum cleaner market. Spangler’s Electric Suction Sweeper also followed on from Britain’s 1901 Puffing Billy. The big difference was that Puffing Billy was so big that it needed horses to drag it around London.
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