Telstra has partnered with a Starlink-like satellite internet service, opening the way for direct competition with Elon Musk's company.
At a conference in Barcelona, Telstra chief executive officer Andrew Penn announced a memorandum of understanding with UK-based OneWeb to bring a low-Earth orbit (LEO) satellite internet service to Australia.
It's the first time one of the established telcos has opted for LEOs, and could lead to faster internet at lower prices for rural and regional areas that cannot access the fixed-line network.
LEO satellites are closer to the ground than geostationary ones, which means signals have a shorter distance to travel, resulting in less of a lag (also known as latency) in communications.
Starlink, which is owned by Elon Musk's SpaceX company, launched an LEO service in Australia last year and has been stealing customers from NBN's Sky Muster, which uses geostationary satellites.
So can Telstra compete with Starlink? And what does this mean for the future of Sky Muster?
Starlink shaking up regional internet market
For years, those in areas without access to the fibre-and-copper network had to rely on fixed wireless (beamed through mobile phone towers) or satellite NBN, provided by two Sky Muster satellites.
The service could be patchy, but there were no other options.
Then, in April 2021, Starlink turned on coverage in parts of NSW and Victoria, and later expanded to areas of Western Australia, South Australia, Tasmania and Queensland.
On Facebook groups normally reserved for commiserating over bad internet connections, users celebrate the arrival of a pre-ordered Starlink dish after months of waiting, gleefully post images of binned Sky Muster equipment, and share screenshots of download speeds.
Starlink download speeds range between 100Mbps and 200Mbps, while the standard and premium Sky Muster services have maximum download speeds of 25mpbs and 50mbps respectively, as well as a much higher latency, or signal lag.
Data technician Tony Margaritis recently installed Starlink on a friend's houseboat at Lake Eildon in Victoria's Central Highlands, where the 4G network is overloaded with every influx of holidaymakers.
"I had a mate waking at 3am to download emails in the middle of the night," Mr Margaritis said.
Fast LEO satellite internet, he says, "brings the city to the farm in terms of communications."
"Sky Muster has no use at all. It's useless."
However, Sky Muster is a lot cheaper, with Starlink customers paying $848 for the hardware, plus ongoing fees of $139 a month.
Sky Muster has no hardware fee and is advertised online at $34.95 a month for the most basic package, or twice that for the premium one.
Sky Muster customers have their data capped, whereas Starlink includes unlimited data, including for Netflix and other streaming platforms.
Sky Muster losing customers since September 2021
From September 2021 to February 2022, Sky Muster has lost just under 2,000 customers, or about 1.7 per cent of the total number.
That's not much, but, given the context of increased competition, could mark the beginning of a long decline.
Anecdotally, some of those Sky Muster customers have gone to Starlink, while others may have chosen fixed wireless, which is becoming more common as the mobile network expands.
Starlink declined to share details about the number of customers in Australia.
Submissions to a recent independent national review included plenty of criticism of Sky Muster's lagging connections, tight data limits, and problems with streaming, videoconferencing and voice calling.
But Gavin Williams, chief development officer for regional and remote areas at NBN Co, has defended the product.
"I think Sky Muster has really proven its stripes in delivering fast and reliable broadband to the most remote parts of our incredibly large landmass," he said.
He added that some regional Australians are using internet services that do not suit their needs – and there are better options out there.
"The regional telecommunications report makes it pretty clear that misinformation ... is endemic when it comes to bush broadband," he said.
He said the independent regional tech hub has advice on the internet service best suited for different areas and NBN Co was investing $200 million a year in fixed wireless and satellite upgrades and improving Sky Muster, including with the development of Sky Muster Plus.
"We'll continue to really eke out every bit of capability," he said.
Sky Muster not good enough: Telstra
But Telstra says Sky Muster is so bad that it won't refer customers to the service.
"We have not been referring customers to the NBN Sky Muster service," Telstra general counsel Lyndall Stoyles told the ABC.
Last week's announcement of a partnership with OneWeb suggests Telstra is looking to LEOs for the future of satellite internet — not Sky Muster.
OneWeb, which is part-owned by the UK government, is years behind Starlink in building a global LEO satellite internet service.
It's launched two thirds of a planned constellation of 648 satellites, and plans to sell internet services around the world later this year.
Starlink has launched more than 2,000 satellites and turned on its service in the US about 18 months ago.
Jeff Bezos is also getting into the space internet game, with Amazon-owned Kuiper planning to launch its first LEO satellites later this year.
Mr Penn didn't say when OneWeb might be available in Australia.
"We see lots of opportunities for our consumer, small business and enterprise customers using LEO satellite connectivity ... from the [internet of things] to supporting emergency services, from home broadband to supporting agritech," he said.
What's the future for Sky Muster?
NBN Co "know they have a problem," says Paul Budde, an independent telecommunications analyst.
"So far it's clear that Starlink is superior to Sky Muster," Mr Budde said.
The Sky Muster satellites, which cost about $500 million each, are about a third of the way through their estimated 15-year life span.
They could be obsolete well before they're due to be retired, he said.
"If Musk is proving to be able to do LEO satellite internet, then the future for Sky Muster looks very shaky to me.
The government will reportedly set aside millions in the upcoming budget to upgrade the NBN network to fight off Starlink.
Mr Williams said NBN Co would look at "developing and emerging technologies" over the next 10 years, prior to the satellites' scheduled retirement, and did not rule out an NBN LEO internet service.
"We'll make decisions based on what is available at that time to do the best job for people in the most remote parts of our country."
