Proactive Investors - BT Group PLC (LON:BT) is in negotiations with Elon Musk’s Starlink to explore the possibility of offering satellite phone and broadband services in rural areas plagued by connectivity issues.
This potential collaboration, first reported by The Telegraph, is set to address the so-called 'rural not spots', a persistent challenge to BT’s universal service obligations.
BT intends to use Starlink’s robust network of approximately 5,000 satellites, positioned 350 miles above the earth, to beam down signals to remote areas, according to the report.
This technology is not only envisioned to bolster broadband services but also to significantly improve mobile signals in areas where traditional infrastructure falls short.
Starlink has successfully conducted tests for sending and receiving text messages with unmodified smartphones, a feat that aligns with BT’s objective of enhancing mobile connectivity in rural regions.
The talks cast doubt over BT’s relationship with London-based satellite firm OneWeb, which was entered into in 2021 to deliver high-speed, low-latency internet to remote areas.
OneWeb currently has around 630 first-generation Low Earth Orbit (LEO) platforms in space orbiting at an altitude of 1,200 kilometres above the Earth.
Though focused on broadband services, the two companies have trialled mobile connectivity via the satellites, and in May completed a live field trial transmission of 4G data using an LEO satellite link.
“The agreement with Starlink could mean more competition for OneWeb or could replace the agreement (given) the previous testing status,” said Robert Grindle, head of European TMT research at Deutsche Bank (ETR:DBKGn).
Despite Starlink’s interest in having BT resell its terminals, BT’s strategy is likely to lean towards integrating Starlink’s technology to fulfil its own service commitments, particularly its universal service obligation to cover rural homes.
Proactive has reached out to BT for a comment.