SpaceX seeks tie-up with telecom carriers

US space firm SpaceX, which is set to launch its low-orbit satellite communication service in South Korea within the second quarter, is seeking to work with the major telecom operators here, sources told The Korea Herald Monday.

The Elon Musk-owned firm, approaching SK Telecom, KT Corp. and LG Uplus separately, had offered to sell its satellite internet network service, Starlink, to the telecoms firms, the sources said. The contract terms were not disclosed due to a nondisclosure agreement.

As the three telecom carriers have a nationwide business network on telephone and communication lines, as well as the Internet of Things, the space firm wooed each with specific conditions such as revenue sharing, the sources said.

The domestic mobile carriers’ reactions to the SpaceX proposal were mixed.

“It does not seem like SpaceX is trying to form an exclusive partnership with a local firm. However, we are not actively considering its proposal at this time,” a source at one of the three firms told The Korea Herald on condition of anonymity.

A separate source at another firm welcomed the request and said that the firm is “open to cooperation.” They would also consider offers from other satellite operators globally, the source added.

SpaceX on March 8 established Starlink Korea LLC in Seoul and Lauren Ashley Dreyer, SpaceX's senior director of Starlink business operations, has been appointed as its representative.

In January, the space firm applied for a business registration with the South Korean Ministry of Science and ICT to roll out satellite-powered internet service Starlink here.

Launched in 2020, Starlink uses a range of radio frequencies known as the 28 gigahertz frequency band to provide high-speed broadband to remote and rural areas. The service is available in over 50 countries around the globe based on more than 4,000 satellites. It aims to deploy more than 40,000 satellites by 2030.

There are some predictions that Starlink may even aim to enter the domestic market as a mobile carrier here. However, market watchers believe that the service will be limited to the business-to-business market as the nation's wired and wireless communication networks are already well established.

“It won’t be easy for Starlink to rise to the position of the three major telecommunications companies due to the characteristics of the facilities-based telecommunications business, such as the inevitable massive initial capital investment, long recovery period, economies of scale and many regulations on business operations,” Kim Hong-sik, an analyst at Hana Securities, noted.