BT confirmed it is in talks with Starlink over the possibility of using the SpaceX-owned satellite operator’s low-earth orbit (LEO) constellation to improve broadband and mobile connectivity, although indications are that no deal has been agreed.
The U.K.-based operator is currently testing Starlink equipment at its Adastral Park research center and noted that using LEO satellites to help plug coverage gaps is a definite area of interest.
U.K. broadsheet the Telegraph reported that the talks are focused on a satellite phone and broadband service that could help tackle so-called rural not spots, where coverage is patchy at best. Starlink currently operates a network of more than 5,000 satellites, which orbit 350 miles above the earth.
As things stand, it appears that BT’s initial interest is to improve connectivity for enterprise customers, although there are also obvious benefits of the technology for consumers living in more far-flung or remote areas of the country where 5G and fiber networks are more difficult to install.
According to the report, BT is not interested in becoming a reseller of Starlink terminals, which are already available to customers in the U.K. Instead, it would rather use the satellite technology to improve its own service.
It’s also not clear whether or not Starlink’s direct-to-cell service is or has been part of the discussions. SpaceX recently launched the first set of six Starlink satellites to support the service and is working closely with T-Mobile US on the endeavor.
Last year, T-Mobile and SpaceX issued an open invitation to wireless providers around the world to expand globally with reciprocal roaming. So far, six wireless providers answered that call, with Japan’s KDDI, Australia’s Optus, One NZ in New Zealand, Entel in Chile and Peru, Rogers in Canada and Salt of Switzerland now onboard to launch direct-to-cell technology.
It has been noted that BT may need to secure a special license from regulator Ofcom if it wished to launch direct-to-cell services in the U.K.
Starlink recently conducted what it hailed as successful tests for sending and receiving text messages using standard LTE smartphones and T-Mobile spectrum.
What about OneWeb?
Meanwhile, the fact that BT is conducting tests with Starlink has raised questions about the operator’s existing relationship with U.K.-based LEO satellite operator OneWeb, which currently has 634 satellites in space.
BT signed a global partnership with OneWeb in November 2021 and has been testing how LEO satellite technology integrates with its existing terrestrial capabilities to meet the communications needs of customers.
In July last year, the two partners announced they are delivering internet connectivity to Lundy Island, which sits about 19 kilometers off the coast of North Devon in the U.K.
At the time, this was described as the first “real-world example of how BT and OneWeb’s strategic partnership can deliver game-changing benefits to remote locations both in the UK and beyond.”
OneWeb has a somewhat checkered history since it was founded in 2012. In 2020, it filed for bankruptcy after it failed to secure new funding from investors including its largest backer SoftBank. The U.K. government then pledged to invest $500 million (£400 million) in OneWeb, also in the hope of fostering the U.K.’s own satellite business.
However, in September 2023 French rival Eutelsat completed a merger that combines its geostationary satellite business with OneWeb’s LEO constellation. The U.K. government has nevertheless retained voting rights following the merger.
Robert Grindle, head of European TMT research at Deutsche Bank, told Proactive Investor that an agreement with Starlink “could mean more competition for OneWeb or could replace the agreement (given) the previous testing status.”
As for BT’s rivals, Virgin Media O2 has carried out Starlink trials at a remote rural location in Wales, but does not appear to have a formal relationship with the company. Vodafone is trialing satellite services with direct-to-cell specialist AST Space Mobile and formed a partnership with Amazon’s Project Kuiper.
A report from MTN Consulting in May 2023 noted that intense competition and a harsh funding climate mean satellite operators are moving deeper into the telecom space for new market opportunities such as broadband internet, direct to cell (or device) and IoT market segments to find new revenue streams.