SpaceX’s Starlink Could Lower Internet Prices by Up to 40%

From the beginning, SpaceX has had a goal of bringing high speed internet service to underserved locations, creating competition in areas that currently have limited options or, in many cases, monopolies causing higher prices.

With its constellation of low orbit satellites, Starlink will be able to shake up the broadband industry by offering a new category of broadband. Without the need to place expensive infrastructure like underground or pole-based wiring required for current broadband options, SpaceX could more easily reach rural areas and begin to close the digital divide.

A study from Broadband Now shows that, in addition to working toward closing that gap, introducing a new internet provider could reduce the price of internet service by up to 40%. The chart below shows how adding additional providers in an area significantly reduces the average monthly cost of internet service.

“An entirely new broadband option would likely drive down the lowest cost plan in a given zip code by an average of $2.41 per month,” Broadband Now notes. “When scaled out to the national stage, consumer household savings could be as high as $300 million a month, or nearly $3.7 billion per year.”

The advantages of bringing Starlink service to the US certainly go beyond lowering prices. Early speed tests show promising results and many broadband customers in rural areas are making the point that any high speed internet option would be an improvement on the current options available.

Introducing a new competitor would likely help to improve quality and speed of internet options in many areas as well. he chart below shows that with more competition, speeds tend to increase.

“If Starlink becomes a viable competitor in markets with only one or two options at current, the service could have the knock-on effect of spurring incumbent providers to improve their offerings to keep their advantage,” says Broadband Now. “This would be a positive move for consumers everywhere.”