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Think economics, geopolitics before signing up with Starlink

STARLINK is a division within SpaceX — the company headed by the richest man in the world, Elon Musk.

It designs, manufactures and launches advanced rockets and spacecraft — providing satellite Internet connectivity around the world using thousands of small satellites in space.

As Starlink's representatives were reportedly in Malaysia in the week of May 23 for further discussions, we hope the government takes into account various factors before making any deals.

To the question whether Malaysia should care about Starlink's potential offerings, the short answer is a "cautious yes".

Quoted by a local portal, former chief executive officer of Jaring Communications, Dr Mohamed Awang Lah, said the biggest challenge for Malaysia's broadband connectivity in rural areas is the high cost of backhaul infrastructure.

This refers to the connectivity from a point-of-presence (POP) of a service provider to the fibre "backbone" of the Internet core network, which could be a long distance.

The distance is especially significant in rural areas, resulting in non-cost effective service delivery. Foregoing the need for long-distance ground infrastructure, satellite Internet such as Starlink has the potential to provide the backhaul services in rural areas, filling this economic and technical gap.

Thus, Starlink could be said to complement ground fibre and 5G, especially in remote areas.

Still, there are complex economic, geographical, meteorological, technical, business and even geopolitical variables for the government to consider.

The government needs to conduct an in-depth cost-benefit analysis to compare propositions by local telecommunication companies (telco) or local agencies in bringing Internet connectivity to rural areas in terms of timeline, coverage, speed, reliability, costs and price.

At present, Starlink services require ground stations, or gateways, linked to a ground fibre-optic infrastructure.

A Starlink user's home dish links up to a Starlink satellite, which would then connect to the nearest gateway, thus connecting the subscriber to the Internet.

Depending on the location, there could still be a need for local players to set up fibre-optic infrastructure to interface with Starlink's gateway system.

The said gateways require a clear 360-degree view of the sky, giving them access to minimum elevation angles of satellites, which could be challenging with the undulating, mountainous, plantation or vegetation-filled terrains that are common in Malaysia, particularly in Sabah and Sarawak, where rural connectivity is in a dire situation.

The current Starlink technology and potential business model may require local partners to deploy the necessary fibre-optic infrastructure to position Starlink's gateways, and perhaps local partners to sell, distribute, install, and maintain the user terminals.

The economics must still make sense for local telcos to provide such infrastructure.

The government must open up a transparent tender for any local contracts related to Starlink's deployment. Only credible and worthy companies must get to deal with SpaceX and win Starlink-related contracts.

Subject to what SpaceX has to offer Malaysia, it's best not to rush the deal, and it is not advisable for the government to start at a large scale and commit itself to one satellite Internet provider. Instead, Malaysia should proceed with testbeds, just as it did when it started a 5G pilot deployment in Kuala Lumpur and Putrajaya.

There are other key issues, such as safety, security and Internet sovereignty; the government must consider fair and reasonable regulatory and policy requirements to protect national interest.

Just as Swedish firm Ericsson was selected via a tender in the nationwide 5G rollout, Malaysia should keep in mind competitors to Starlink that are on the horizon, such as Amazon's Project Kuiper, SpaceMobile (joint-venture between Vodafone Group and Rakuten), and similar initiatives from China, Russia, and the European Union.

This is not only to ensure that Malaysia gets the best deal, but also to manage geopolitical sensitivities and risks through diversification.

The reaction of major powers and corporations to Starlink's proposition is testament to its game-changing potential, but it also reveals the complex geopolitics that need to be navigated.

The government should consider packaging deals with the setting up of rocket launch sites given Malaysia's proximity to the equator. This is to compete with Indonesia's spaceport proposition. Subject to environmental impact assessments and local acceptance, Sabah and Sarawak may provide such competitive sites.

The writer is the head of Science & Technology at EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research

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