Starlink Maritime. Photo: SpaceX

Starlink have been making a ‘splash’ in the world of maritime and the industry has observed with keen interest the growth and deployment of the LEO service.

Connectivity is becoming more crucial and digitalization tools have become almost standard protocol. With IT management interactions in real-time, LEO services such as Starlink Maritime are becoming highly desirable to users.

However, the emerging player is not without its issues. To really understand the impact of Starlink Maritime, we must travel through the looking glass.

The Usual Suspects … Resellers

Starlink seemed to change its strategy from direct supply to the use of agents when Speedcast was announced as a Starlink reseller in September 2022. However, it is more likely that the LEO service provider has acknowledged the benefits of reseller agreements combined with a direct to market approach.

While their previous system was effective for consumer markets, such as its RV land-based services; Starlink has recognized that commercial and industrial users are not going to install satellite communications themselves.

Additionally, the LEO service provider also quickly saw that weaning the industry of its existing suppliers would be exceedingly difficult, therefore, the use of resellers has allowed it to “seed the market” quickly.

There are numerous financial benefits for resellers, who can sell Starlink at their chosen premiums, marking up the service to an extent that suits their needs.

Another major benefit of being a Starlink Maritime reseller is the capacity to cross-sell other service, hardware and/or value-added services. If you buy Starlink Maritime, an L-band backup such as Iridium Certus would make sense as an add-on. A new exchange box, as well as other services such as cybersecurity, and IT management suite may also be required.

Starlink resellers, such as Castor Marine, Marlink, NSSLGlobal, Speedcast or even Tampnet, are already known for their hybrid connectivity solution expertise. The benefits of Starlink are attractive to the industry but can be sold alongside other connectivity solutions within a hybrid network, which is beneficial for connectivity priorities.

But why do customers use service providers as resellers? One major motivation is that it is simply much easier to access Starlink through service providers.

We understand that Starlink’s direct customers (who purchase via its website) are only able to buy three systems through a single credit card. While this does work for some, particularly those in the fishing and leisure, this can be unmanageable for the rest of the maritime industry. Through a service provider, a customer can be billed to a single credit card which is particularly useful for larger fleets.

Starlink also offers limited technical support while resellers can offer more tailored support at every stage of the process. This ranges from the delivery of readily available hardware and the arrangements for installation to the inclusion of value-added services such as cybersecurity and IT management.

Compared to typical VSAT service level agreement deals, when customers purchase from either Starlink on from its resellers they are purchasing data capacity as opposed to speed of connectivity (committed information rates). With regards to the 5TB data plan a maximum speed of approximately 350 Mbps is priced at $5,000 per month with a cost of $10,000 for the initial hardware.

It must be noted that all given prices are directly from Starlink for resellers are able to add on their premiums at their discretion, or what the customer is willing to pay.

Once users reach their data cap, their service is throttled at 1/1 Mbps. However, users can opt back for a priority data service again, returning to 350/40Mbps (best effort) in 1GB increments.

In addition, Starlink is believed to have almost global coverage with a few notable restrictions in countries such as Russia, China, Taiwan.

The Drawbacks of the LEO Service

While overall the feedback from Starlink installations have been positive, there are some drawbacks to the system. Contracts with Starlink are renewed monthly, a contract type that is a rarity in the industry except for those used by KVH’s AgilePlans. Monthly contracts create the issue of price instability over prolonged periods, price increases could be a result of hikes by Starlink or the resellers themselves.

However, monthly contracts are well suited to some markets, such as leisure vessels. Such boats could be used in the summer or autumn months but are inactive for the rest of the year.

In addition, the overage system could be proven difficult for some users. As previously mentioned, when a user reaches their data cap the system throttles to 1/1 Mbps. Customers must ‘opt in’ to increase their data allowance, once done so they must opt-out to stop the price increase rolling over to the following months. This may prove difficult for some users, having to continually increase and decrease data plans depending on monthly usage.

Starlink also does not offer a CIR (committed information rate) and unlike VSAT services is not required to offer a minimum speed. While Starlink currently offers a high-speed service, the lack of CIR means there is little security provided to customers in the case of a speed decrease.

What does the Future Hold?

But will hardware shortages affect the rollout of the service? The worldwide shortage of microchips does affect both the user terminal and dish production. However, Starlink does have fewer issues than its competitors, its vast number of orders makes the LEO operator a priority for supplies.

Some industry peers state due to its coverage and capacity issues, Starlink is unlikely to see significant profits over the next five years. The LEO provider is also struggling with signal blockages of other systems, interference with detailed ground-based astronomical observations, potential space debris, environmental effects, and radio/electromagnetic interference.

However, with SpaceX covering the shortfall, Starlink has both the time and the backing to continue over this hurdle.

Starlink has yet to hit critical mass in the maritime market and is a work in progress. It will be interesting to see how it adjusts to the launch of competing LEO services, such as OneWeb and Amazon’s Project Kuiper, only then will we see its full potential.

Alishia Sims is a Market Research Analyst for Valour Consultancy focused on maritime connectivity, digitalization, and cyber security