- Starlink rolled out its “Residential Lite” service in 15 U.S. states, but it’s not expected to upend the rural broadband market
- The plan is slower than Starlink’s standard residential offering due to network capacity constraints
- Competition from fiber and fixed wireless access (FWA) providers isn’t likely to change
SpaceX’s Starlink is dipping its toes into the affordable broadband market, with the launch of its “Residential Lite” service in 15 U.S. states. While it’s cheaper than Starlink’s standard residential plan, the move is hardly a gamechanger for rural broadband connectivity, analysts told us.
First things first, it’s not quite a new offering, as Starlink first rolled out the plan across some markets in Europe, Latin America, Africa and Oceania. But only now is Residential Lite entering the U.S. scene. Residential Lite costs $80 per month (compared to the $120/month residential plan), with speeds ranging from 50 Mbps to 100 Mbps. So, it’s not as fast as the standard plan which offers 150-250 Mbps speeds.
Notably, Starlink said Residential Lite service will be “deprioritized” during peak hours. This means customers on the lower-cost plan may experience slower service compared to Residential subscribers when the Starlink network has a lot of users online.
Considering Starlink’s capacity constraints (as it has an ever-expanding waitlist), that’s not surprising to hear.
Though Residential Lite is marketed as a more affordable Starlink option, “no matter how you look at it $80 is still a high price,” said Recon Analytics principal Roger Entner.
“You almost always get more customers when you lower price, but I would not call it a game changer,” he told Fierce.
The $80 monthly price tag is certainly a far cry from the $30/month subsidy from the defunct Affordable Connectivity Program as well as some of the other low-cost internet options in the market. For instance, Comcast charges $14.95/month for its Xfinity Internet Essentials plan while Spectrum’s Internet Assist costs $25/month.
Nevertheless, Starlink’s Residential Lite is still a viable option for rural residents with few alternatives, said Arun Menon, lead analyst at MTN Consulting. The service’s speed allotment offers “sufficient bandwidth for general browsing and streaming.”
“However, competition from fiber and fixed wireless access is intensifying,” Menon said.
Federal broadband programs like Broadband Equity, Access and Deployment (BEAD) and the Rural Digital Opportunity Fund (RDOF) are pushing fiber expansion in rural areas, while the major FWA providers (like Verizon and T-Mobile) are “rapidly scaling their FWA offerings with speeds exceeding 100-300 Mbps at lower price points,” he explained.
But Starlink customers have reported fewer service outages compared to cable and DSL subscribers, according to a study from Recon Analytics.
Among the states where Residential Lite is available, Maine and New Mexico have particularly doubled down on satellite broadband connectivity. Maine is partnering with Starlink on a subsidy program to connect around 9,000 remote locations to satellite. New Mexico aims to do something similar by working with Starlink as well as Amazon’s Project Kuiper once the latter’s satellites are operational.