Starlink with Service Level Agreements

First off, let me tell you straight up, the notion of Starlink introducing Service Level Agreements (SLAs) is a real game-changer, and I’m not just saying that. This could really shake things up in the satellite communication world, especially when you stack it up against OneWeb. Let’s break it down:

SLAs, usually in the form of CIR (Committed Information Rates – minimum guaranteed bandwidth) are typically associated with a commitment to reliability and quality of service.

If Starlink were to offer SLAs, it would enhance its reputation as a reliable service provider. This could increase customer trust and potentially draw customers who are waiting for OneWeb or considering other providers.

Business customers, in particular, look for guaranteed service levels, as downtime can have significant financial implications. You don’t want your production vessel to start stuttering on your weekly conference call, do you?

It immediately gives a whole new meaning to a-hole-in-your-wallet. Offering SLAs could make Starlink more attractive to this segment, potentially giving it an edge over OneWeb, which is still in the process of setting up its network.

The introduction of SLAs often comes with different pricing structures. Starlink might introduce tiered service levels with varying pricing, which could attract a wider range of customers.

However, this could also lead to higher prices for guaranteed service levels, affecting the affordability that has been one of Starlink’s advantages but may very well still position it below other offers. CIR does not necessarily mean super high top speed bandwidth, but it does mean that it will be there when you need it.

To offer SLAs, Starlink would need to ensure its network’s performance can consistently meet the promised standards. This might require additional investment in technology and infrastructure, potentially impacting its operational costs.

But if you look at their current capacity, reserving a (small) portion of it that will NOT be consumed by Netflix should not be all too complicated, QoS and some routing can do miracles. (yup, I oversimplify)

Positive may very well be that If Starlink starts offering SLAs, OneWeb and other competitors might accellerate their commercial plans or revise their service offerings to remain competitive. This could lead to a more rapidly evolving market with various providers trying to outdo each other in service quality and reliability. Or maybe just make them shift to a higher gear forward.

Offering SLAs might also help Starlink in dealing with regulatory requirements in different countries, thereby aiding its global expansion efforts. It could also position Starlink favorably in markets where reliable communication is crucial, such as in remote education, healthcare, and disaster management.

The pressure to maintain SLA standards is one that has been juggled for decades in the ‘classic’ VSAT world and there must be sufficient expertise to replicate this in a larger size constellation. Maybe National network operators managing thousands of nodes on land could assist Starlink to innovate and continuously improve its service.

This would benefit not just their customers but could set a higher standard in the satellite internet industry. Starlink offering SLAs would likely intensify competition in the satellite internet market, compelling all players, including OneWeb, to elevate their service offerings. It could lead to improved services for customers but might also come with higher costs and necessitate significant investment in network infrastructure and technology.

A look at the numbers:

With over 5000 satellites @ 20Gbps each, over 150 Groundstations and about 2,000,000 best effort subscribers I think they have sufficient capacity to do some CIR magic … What do you think Elon, 5% of current capacity?