Satellite broadband: how it works, its costs and potential benefits

A growing number of UK households are already using satellite broadband, most in rural areas, new research shows.

Satellite broadband can provide a more reliable service for people in locations poorly served by traditional connections and who are unlikely to have access to full fiber internet.

Despite the appeal of the new type of connection, the installation cost of around £500 prevents two-thirds of potential consumers from trying the technology, according to data from Uswitch.

This is Money takes a look at what satellite broadband is, whether it can be beneficial for you and how expensive it really is.

Some customers are said to put off satellite broadband because of the installation cost

How does satellite broadband work?

Like satellite TV, broadband is beamed from space via satellite to a satellite dish installed on the property. It then connects to a Wi-Fi router like normal broadband.

Since it does not rely on a network of cables going to every home, it is expected to become a favorable option for people living in rural areas in the coming years.

The new satellite internet technology currently being introduced is expected to completely replace the older, slower system that currently exists.

Companies such as Tesla billionaire Elon Musk’s SpaceX and OneWeb are revolutionizing technology with satellites that can now provide internet speeds of up to 300Mbps.

This is much faster than the UK’s average speed, which is currently 64 Mbps.

To put this into perspective, you could use satellite broadband to download a two-hour HD movie in about four and a half minutes, but it would take about 18 minutes at 64Mbps.

Is it expensive?

Customers who want to take advantage of satellite broadband will have to pay to have a satellite installed next to their home, along with a transmitter.

This costs around £500 but can be even more expensive which could put many off.

However, users of the technology say they pay an average of £29.70 per month for the service, compared to an average £33.60 for all broadband customers.

Sticking with satellite broadband, while the initial cost is high, can mean you save in the long run.

Elon Musk's Starlink is one of two companies in the UK to offer consumers satellite broadband

Elon Musk’s Starlink is one of two companies in the UK to offer consumers satellite broadband

Who benefits from satellite broadband?

Nearly 200,000 UK homes are currently struggling with speeds below 10Mbps – the level Ofcom considers a decent service.

This means that for rural households, satellite broadband can be a lifeline due to their unreliable or slow existing connections.

Satellite broadband coverage is expected to become universal as Elon Musk begins a UK trial of his Starlink satellite broadband system in January.

It is hoped that within a year it will reach 500,000 users worldwide, while BT has joined forces with operator OneWeb to provide connections to people in remote areas.

Other existing UK satellite broadband providers include Broadband Everywhere, Freedomsat, KONNECT and Satellite Internet.

While there is the option of full fiber broadband, which in some cases can offer speeds comparable to satellite internet, it is unlikely that people in rural areas will see infrastructure built in their area for several years due to the difficulty and cost of the operation.

Holly Cox, head of digital at Compare the Market, said: “If you live in a remote rural area, broadband via satellite can be a good option for getting online.

“The main advantage of broadband via satellite is that it is available all over the UK and goes where cables can’t. All you need is an exterior wall to install a satellite dish that has an unobstructed view of the sky to the south.

“That makes it ideal for areas where fixed broadband is painfully slow or even non-existent.”

According to Ofcom, which received data from providers and estimates for providers who have not submitted data to the watchdog, there were about 27,000 fixed satellite broadband connections at the end of 2020.

Satellite broadband could be a 'lifeline' for rural customers struggling to get decent internet

Satellite broadband could be a ‘lifeline’ for rural customers struggling to get decent internet

What are the disadvantages?

Apart from the high installation cost of around £500, extreme weather can also affect a satellite broadband connection with heavy rain and wind which can reduce speed or even cause outage.

Another issue is latency, the delay or delay between requesting information online and receiving it, according to Compare the Market.

Satellite broadband has a high latency due to the time it takes for a broadband signal to travel to Earth from geostationary orbit, 22,200 miles higher in space.

This means it can be problematic if you’re live streaming, gaming, or making video calls over VoIP services like Skype.

However, there are plans to launch Low Earth Orbit satellites in the coming years that will orbit closer to Earth and help solve the latency problem for satellite broadband users.

Cox added: ‘There are some significant drawbacks to using broadband via satellite. The biggest problem for most households is the installation cost, which can be around £600.

Also, unlike the range of fiber optic packages that offer unlimited data, most satellite broadband packages have a monthly data usage limit or may only give you a certain amount of data at top speed.

“This means you need to calculate how much you’re likely to download each month before signing a contract. For context, it takes about 1 GB of data to stream Netflix in standard definition for an hour.

‘Some satellite broadband providers do offer contracts with an unlimited off-peak period, which can be used for larger downloads.

‘Prices range from around £20 per month to around £87, the cost can be higher depending on how much data is needed.’

Satellites can now offer internet speeds of up to 300Mbps - comparable to full fiber options

Satellites can now offer internet speeds of up to 300Mbps – comparable to full fiber options

Are there many good deals?

While there are several companies that offer the older, slower version of satellite broadband, only two companies offer customers the new, faster alternative.

Starlink and OneWeb are the two companies offering the service in the UK, but not everyone can join.

Only customers in certain rural locations can access Starlink services, with OneWeb not yet available to households.

Consumers won’t have to wait long, though, as the expansion is moving quickly with hopes of OneWeb launching in October 2021, with global operation to be available in June 2022.

Similarly, Starlink is expanding its offering to more customers as time goes by.

Ernest Doku, broadband expert at Uswitch, said: “Satellite broadband is getting better and better, and as big players like Starlink enter the UK market, connections will only get faster and more reliable.

“Satellite broadband offers hope to residents of rural areas struggling to get a decent connection from traditional providers, and we’ll see how BT’s partner with OneWeb grows in the coming years.

“While it is tempting to think that one technology can solve the problem of the digital divide, there is no single solution for broadband in rural areas.

‘Many households still have an ADSL connection and experience unnecessarily slow speeds, not knowing that in many cases they can upgrade to fiber broadband and still save money.

“Anyone who still struggles with slow broadband should do a speed test to find out how reliable the connection really is.

“If you’re not happy with the results, compare online and see if you can get both a better deal and faster service.”

Cox added: ‘Before installing satellite broadband, it’s a good idea to check for alternatives, even if you can’t access fixed broadband.

“If your area is covered by a 4G mobile network, mobile broadband can be a cheaper and faster way to connect.

“It works with the same data networks you connect to on your smartphone, and you can take your internet connection with you wherever you go.”

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