Why Telstra chose Starlink over nbn's Sky Muster

Earlier this week Telstra became the first telecommunications business in the world to ink a partnership with Elon Musk’s Starlink. Despite NBN Co. already offering its own Sky Muster satellite services, Telstra didn’t think it was good enough.

Telstra announced the Starlink news in a blog post on Monday, saying it will allow the telco to offer home phone services and Starlink broadband services as a bundle offer.

There will be two types of plans: one for individual customers and one for businesses, with the latter offering different speed and bandwidth options.

While Australians can already access Starlink directly, Telstra is differentiating itself by offering professional installation, tech support, and a single point of billing.

At the present time, we don’t know how much Telstra’s Starlink plans will be, but they’re set to be released towards the end of 2023.

Sky Muster hasn’t had the best track record

While this news is an exciting one in the telco world, it does leave one wondering why Telstra opted for Starlink — an international company led by Elon Musk — when there was an Australian option?

Back in 2015, NBN Co. launched Sky Muster — a satellite solution for Australians who can’t connect to fixed wireless nbn or 4G.

While the offerings afforded by Sky Muster have improved over the years, there have been consistent complaints from users. These include expensive pricing, slow speeds, and data caps.

And as we’ve heard from rural businesses such as SwarmFarm, installation could be a long process.

“You’d have the book, an appointment, they’d have a look at your farm… then book another appointment months later for someone to come and install it. It took like nine months to get the system installed because the roll out was so slow,” Andrew Bate, SwarmFarm CEO, said to SmartCompany earlier this year.

Bate also recalled being limited to 25GB per month before speeds were severely capped. So the business had to improvise.

“We put four NBNs across four different buildings, but never used three of them. Once we hit our data limit… we’d unscrew the box, off the wall, grab the next one out and hook it up. That’s the only way we could survive,” Bate said.

Of course, things have improved since then. Prices for Sky Muster have been reduced — you can find several providers offering plans under $50. And others even have unlimited data options under $100.

But while it is operated by a government enterprise, Sky Muster isn’t the fastest option available.

Despite costing roughly $2 billion, the Sky Muster satellites are dated. After launching they were given a remaining shelf life of roughly 15 years. And time is ticking on that.

At the present time, each satellite offers 80 gigabits per second of bandwidth, which means that things can get a little slow when all 92,853 users (a number that has been dropping) are online — particularly during peak periods.

Comparatively, according to recent Ookla data, Starlink is leading the satellite speed race in Australia.

Telstra chooses Starlink over nbn’s Sky Muster

With all of this in mind, perhaps it’s not entirely surprising that Telstra has opted for the Musk camp.

“From our perspective, we didn’t see Sky Muster as a suitable alternative for us. We just didn’t think it was a good enough service,” Nikos Katinakis, Group Executive, Global Networks and Technology at Telstra, said in a briefing on Tuesday.

“That’s why we looked at other partnerships. And we’re going to continue creating those partnerships to provide the best service that we can deliver.”

When asked whether Telstra had to consider the volatility of Elon Musk and the possibility that his decision-making could impact this partnership, the representatives answered in the affirmative.

“It’s something we’ve been pondering — how stable is Elon to provide stability for the service in the market,” Katinakis said.

“You never know how it’s gonna play out. And that’s why we’re ultimately aiming to have more than one partnership, not only to provide resiliency to our services but to make sure that we can always continue whatever service we will provide.

Despite Starlink pushing harder into Australian skies, NBN Co. isn’t backing down. Earlier this year it announced a three months trial of a new plan that would deliver unmetered speeds up to 100 mbps for 10,000 Australian customers. In June it made this a permanent offering as Sky Muster Plus Premium. NBN Sky Muster Plus.

The Australian government is also shelling out $480 million towards a nbn Fixed Wireless and Satellite Upgrade Program.

While we don’t know how all of this will shake out, Sky Muster and its government backing isn’t going away. But it’s also not going anywhere near the Telstra network.