“Unlimited” satellite broadband is good news for rural Australia

TLDR version: This week nbn launched its Sky Muster Plus Premium plan, bringing unlimited data to its satellite users and changing the competitive dynamic versus Starlink. The latter has enjoyed a period of strong growth since launch, and we think it has the potential to be more agile than nbn with its pricing. With policy makers on both sides of the Tasman optimistic about the contribution of LEO Satellite in addressing rural and remote broadband needs, there may be opportunities for both Australia and New Zealand to collaborate in this space.

“Unlimited” Sky Muster data is a positive development for remote Australia

The launch of nbn’s Sky Muster Plus Premium plan is a positive outcome for remote Australians reliant on the nbn for their digital connectivity. The new ‘Premium’ plan offers unlimited data usage, subject to a fair use policy, along with capability for download speeds to burst up to 100 Mbps.

With indicative RSP pricing around the $100pm mark, Sky Muster Plus Premium is arguably not a metro equivalent offering. But unlimited data is something enjoyed by around 90% of nbn’s fixed line customers , so extending that option to the Sky Muster customer base is a step towards closing the disparity between nbn’s most remote customers and the rest of Australia.

It also has the potential to change the competitive dynamic between nbn and Starlink. Since its Australian launch in 2021, one of Starlink’s competitive advantages over Sky Muster has been its ability to offer unlimited data.  Sky Muster Plus plans saw certain traffic unmetered, but until now Starlink hasn’t had to compete against an nbn satellite plan marketed as ‘unlimited’ data. In that environment, Starlink has been able to achieve impressive growth and connected close to 95,000 services by February this year.

Can Starlink sustain these growth rates in the residential market now its pool of enthusiastic early adopters has likely been exhausted? Does it make any changes in light of nbn’s unlimited plan?

Globally, Starlink has demonstrated it’s prepared to be flexible with pricing. In the US, it discounted monthly fees in areas where it had excess capacity, while raising prices in areas where capacity was limited. In Australia, its currently offering different prices on hardware for select rural areas. If it chooses to respond to nbn’s move, it has demonstrated the capacity to do so in a nuanced way if it chooses.

LEO satellites in the spotlight on both sides of the Tasman

The role of LEO satellites in serving rural and remote citizens was also in the policy spotlight in both Australia and New Zealand this week.

In an interview with Comms Day (30/5/23), Australia’s Federal Communications Minister, Michelle Rowland, acknowledged the role of LEO satellites in bringing innovation and competition to regional and rural telecoms. There was also a recognition LEO satellites may play a role in future delivery of Universal Service Obligations as well as offering nbn optionality at the end of life for Sky Muster.

Rural connectivity is also back in the spotlight in New Zealand, with the Commerce Commission announcing the terms of reference for its Rural Connectivity Study. The Commission notes:

“the purpose of the study is to build a comprehensive picture of the connectivity options for rural end-users of telecommunication services, including the alternatives to copper in rural areas such as wireless broadband services, low earth orbiting (LEO) satellite services and mobile services.”[1] (emphasis added)

Insights from the Rural Connectivity Study will inform the Commerce Commission’s review of regulated copper services, which is expected to commence later this year and be completed by the end of December 2025.

Why does this matter?

Starlink’s entry into the ANZ region was disruptive. It appears to have enjoyed strong growth in the region due its combination of unlimited data and relatively high speeds, albeit at a premium price. The introduction of an “unlimited” Sky Muster plan is another positive development for improving rural connectivity.

With LEO satellites of interest to policy makers on both sides of the Tasman, we believe this represents an opportunity for knowledge sharing as both countries are likely to be dealing with the same operators and challenges. Looking further into the future, and with the growing interest in sovereign satellite capabilities for defence as well as servicing remote communities, perhaps this collaboration might someday extend to an ANZ or even Oceania LEOsat constellation similar to that proposed for Europe.

[1] . Commerce Commission, ‘Telecommunications Rural Connectivity Study: Terms of Reference’, 31/5/23

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