Australia’s largest telecommunications company says uncertainty surrounding Elon Musk’s business decisions was taken into consideration before signing an agreement with his low-earth orbit satellite company, Starlink, this week.
Telstra has become the first telecommunications company in the world to sign a mobile service agreement with Starlink, with a plan to offer customers in regional and remote Australia voice or voice and broadband services.
The products will be available by the end of the year and is one of three agreements Telstra has announced with satellite operators in recent months as it attempts to fill gaps in its mobile network coverage across Australia’s vast landscape.
The agreement comes at a time where Musk has been running three businesses including Tesla, Starlink and now Twitter. His unpredictable decisions at the latter include sacking most of the workforce and making moderation or business changes which have caused many advertisers to pause or withdraw their spending on the platform.
Telstra said the uncertainty around Musk’s business decisions was something the company had considered in signing the agreement.
“It’s something we’ve been pondering,” Telstra’s group executive of global networks and technologies, Nikos Katinakis, told a media briefing on Wednesday.
“You never know how it’s going to play out, to be honest. And that’s why we’re ultimately aiming to have more than one partnership not only to provide resiliency on our services, but to make sure that we can always continue whatever service we provide.”
Katinakis said the satellite broadband service industry is young, and there would probably be an era of consolidation and bankruptcies before companies emerge on the other side.
“But we are going to have quite a few partnerships to make sure that we cover up for whatever Elon does … If say Starlink pulls out of the market because Elon says ‘We hate you Australians’, we are going to go through a period of changes.”
A Telstra spokesperson later said the company is “incredibly proud” of its agreement with Starlink.
“We have been working closely with the Starlink team throughout the process of creating our agreement and are focused on delivering this product to our customers,” the spokesperson said.
“Like any commercial agreement, we have negotiated commercial terms and measures to give us the best opportunity to ensure our customers are looked after if things change. Telstra will always be there to support our customers and we have trust in our partners to deliver on our agreements.”
Guardian Australia has sought comment from Starlink.
Mobile companies are increasingly looking at how to integrate satellite services into their mobile networks. The iPhone 14 will now allow users to send SOS text messages using satellite in areas where they don’t have coverage – but it will still be at least two years before “direct to handset” broadband via satellite will be on the market, Telstra’s technology, development and innovation executive, Channa Seneviratne, said.
Seneviratne said tech companies had to agree on standards for the technology and handsets would need to figure out how to account for the Doppler effect, where the phone needs to adjust communicating with the satellite as a person is moving around at the same time as a satellite is moving.
“If you’re mobile as well, the algorithms in the mobile have to go solve for that fact that the everyone’s moving as opposed to a base station which is stationary.”
