Musk's "Starlink" is "taking over" the internet in emerging markets.

```

With technological breakthroughs, a large user base, and disruptive cost advantages, Musk's Starlink business is rapidly becoming an emerging disruptive force in new markets.

According to Zhui Feng Trading Desk, a report released by JPMorgan on September 10 pointed out that the number of global Starlink users has grown from 5 million in April 2025 to more than 6 million, covering 134 countries. More importantly, its parent company SpaceX has reportedly acquired wireless and mobile satellite service spectrum, paving the way for its Direct to Cell (DTC) service, which aims to "eliminate global mobile network dead zones."

This series of combinations is directly impacting the current market structure. JPMorgan warns that for emerging market telecom companies that rely on high tariffs, hold traditional regional infrastructure, have satellite businesses, or high leverage, their revenues are facing real risks.

The report emphasizes that as low-orbit satellite internet providers like Starlink continue to iterate technologically, network capacity may increase a hundredfold in the future, while reusable rocket technology could drive marginal bandwidth costs down by up to 90%. Cost reductions and service innovation are turning satellite internet from an expensive supplementary option into an increasingly competitive mainstream choice.

Accelerated expansion: new services and spectrum acquisition go hand in hand

Starlink’s pace of expansion has not slowed down.

The continuous expansion of its user base is only part of the story; more disruptive change comes from the extension of its service capabilities. The report shows that Starlink has acquired 50MHz of wireless and mobile satellite service spectrum, and SpaceX says this will "further the mission to eliminate mobile communication blind spots worldwide."

A key catalyst is the “Direct to Cell” (DTC) technology. This emerging technology allows standard smartphones to directly connect to satellites, providing text, voice, and data services. Since 2024, Starlink has offered DTC SMS services, and reportedly, SpaceX’s recent spectrum acquisitions will enable it to develop the next generation of DTC satellites, greatly enhancing coverage and performance.

Currently, Starlink has deployed about 8,400 low-orbit satellites and plans to expand the constellation to about 42,000. It has also reached cooperation agreements with several telecom operators globally to jointly promote DTC services. Partners include T-Mobile in the US, Optus in Australia, Rogers in Canada, KDDI in Japan, and Kyivstar in Ukraine.

For example, T-Mobile has launched a "$10 T-Satellite" monthly subscription service, while Japan's KDDI offers compatible SMS services to its users for free. These partnerships not only open up new revenue streams for Starlink but also greatly promote the popularity of its services.

Technological progress drives dramatic cost reductions

The core driving Starlink's disruptive potential is its reshaping of cost and capacity.

JPMorgan’s analysis shows that the satellite internet industry is on the verge of a technological revolution that may achieve a hundredfold increase in capacity and a 90% reduction in costs.

In terms of capacity, in addition to Starlink’s massive constellation plan, Amazon’s Kuiper project (planning to launch over 3,200 satellites) and other national satellite projects are collectively driving explosive growth in the number of low-orbit satellites worldwide.

Meanwhile, the capacity of a new generation of satellites (such as Starlink’s V2 Mini satellites) is already four times that of the previous generation, further amplifying the total network capacity.

On cost, JPMorgan estimates that with the maturation of fully reusable rockets such as Starship, the cost per launch could drop from the current roughly $62 million for Falcon 9 to under $10 million.

Combined with the higher bandwidth capabilities of next-generation satellites, the report estimates that in ideal conditions, the marginal cost per unit of bandwidth can be reduced by as much as 90% or even 97%.

Emerging market telecom companies face severe challenges

Currently, pricing remains the main obstacle to Starlink’s popularity in emerging markets. For example, in the Philippines, Starlink’s residential package costs about $67 per month, much higher than PLDT’s comparable local fiber broadband (FBB) service at about $28. Users must also pay for pricey terminal hardware.

The rise of Starlink constitutes a structural challenge to traditional telecom operators in emerging markets.

In many Southeast Asian countries, such as the Philippines and Indonesia, the home penetration rate of fixed broadband is only 25% and 16% respectively, far below developed markets. Since the cost of laying fiber networks in low-density suburban and rural areas is extremely high, traditional telecom operators face barriers to expansion, leaving a massive market gap for satellite service providers like Starlink.

The report shows that Starlink has now launched more affordable “residential lite” packages in markets such as Malaysia and Indonesia, with speeds slightly lower than the standard version but at much reduced prices; in Malaysia, the price of this package is already comparable to local fiber broadband.

At the same time, Starlink has rolled out the smaller, less expensive Starlink Mini antenna hardware. In some regions, Starlink also attracts users by waiving hardware fees for those signing a 12-month contract.

JPMorgan believes that as bandwidth costs continue to decline, Starlink will be able to pass the savings on to consumers. The report estimates that if the monthly fee in the Philippines is reduced by 60%, the pricing will be on par with local operators.

~~~~~~~~~~~~~~~~~~~~~~~~

The above highlights are from Zhui Feng Trading Desk.

For more detailed interpretations, including real-time commentary and frontline research, please join [Zhui Feng Trading Desk▪Annual Membership]

Risk warning and disclaimerThe market has risks, investment needs caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article suit their particular situation. If you invest accordingly, you are responsible for the consequences. ```