- Starlink is getting most of its subscribers from new broadband users in rural areas
- But as it increases capacity, Starlink will impact legacy broadband operators more
- Those operators shouldn’t sit back on their heels in face of the competitive threat
Players in the broadband industry are increasingly concerned about the impact that SpaceX’s Starlink could have on their businesses.
Recently, New Street Research (NSR), working with Recon Analytics’ data, found that SpaceX’s Starlink continues to get close to half of its gross adds from small rural broadband providers and customers that are new to broadband.
“New customers” refers to subscribers who say they have not had broadband in the past.
“So, yes, Starlink is, in fact, apparently, helping close the digital divide,” wrote NSR analysts, led by David Barden.
But he added, “So far, we haven’t seen any major impact on the wired broadband operators in the U.S. mostly because Starlink has been focused on rural markets where customers have few alternatives. As Starlink increases its total capacity with V3 satellite launches, its ability to lower prices and target more incumbent broadband operator customers will grow.”
Just this week, SpaceX filed an application with the FCC, seeking to deploy its new Gen3 broadband constellation of up to 100,000 low-Earth-orbit (LEO) satellites.
In response to that application, BNP Paribas Equity Research Senior Analyst Sam McHugh wrote that if SpaceX’s application is approved, “It would give them massive headroom to boost network capacity for Starlink…. facilitating deeper penetration into suburban markets and creating significant disruption for wireline broadband operators.”
Barden said the broadband industry should monitor the situation closely and not be like cable, which poo-pooed the threat from fixed wireless access (FWA), until it started eating into their revenues.
The NSR analysts noted that prior to SpaceX’s IPO, Starlink instituted some price cuts, presumably to boost subscribers, “but more recently has been raising prices, we believe because of capacity limitations (at least in the U.S.,” said Barden.
According to the Recon Analytics data, Starlink’s share of gross adds that are new to the broadband industry has increased from 11% in 2023 to 17% in the first half of 2026. “As Starlink expands into more suburban and urban markets, we should see the share of ‘new to industry’ decline,” wrote NSR. “That hasn’t happened yet, implying that Starlink is still more of a rural phenomenon.”
Also interesting from the data is that Starlink’s share of wins from cable and FWA has increased over time. Starlink’s share of gross adds from cable has increased from 15% in 2023 to 20% in the first half of 2026. The share of gross adds from FWA has increased from 9% in 2023 to 15% in 1H26. “This supports our thesis that as Starlink’s capacity increases, more of its gross adds will come from FWA,” wrote NSR.
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