Musk’s Starlink to Be Called Upon to Pay Telco Levy in New Zealand: Commerce Commission

Antennas are seen at the booth of Elon Musk's "Starlink" during the opening of the 100th edition of the IFA ("Internationale Funkausstellung", "Innovation for All"), the international trade show for consumer electronics and home appliances in Berlin, Germany on Sept. 6, 2024. Tobias Schwarz/AFP via Getty Images

Elon Musk’s Starlink now has over 37,000 customers in New Zealand for its satellite broadband service, which delivers internet to remote locations, including homes, bachs (small holiday homes), boats and even Air New Zealand planes.

That’s brought its local revenue to over $10 million (US$6.01 million)—which triggers an obligation for it to contribute toward the annual $12 million Telecommunications Development Levy.

The money, which is collected from all large telcos in New Zealand, contributes to the cost of services such as emergency calls, as well as rural broadband initiatives—which are direct competition to Starlink in a way they are not to other telcos, who derive most of their revenues from areas of higher population density.

The Commerce Commission says SpaceX made $73.8 million in revenue from Starlink in NZ between July 2023 and June 2024. That means its share of the levy works out to $182,000.

Also captured for the first time is Sky TV, which recently launched a broadband service that now serves 36,000 subscribers. The Commission says Sky derived $52.4 million in revenue from that, meaning its contribution will be $129,000.

In comparison, market leader Spark has to pay $3.4 million on revenues of $1.3 billion, while second-placed One New Zealand (formerly Vodafone) is up for $2.7 million on earnings of just over $1 billion.

Those figures could change, however, as in the past, some telcos have disputed their total (including several that have taken it all the way to the High Court).

“Starlink has engaged positively with the process and voluntarily provided information to us,” a Commerce Commission spokesperson said.

New Zealand customer numbers for the service—which costs between $79 and $150 for unlimited data—have risen from 12,000 the previous year to 37,000, according to the Commission’s annual Telecommunications Monitoring Report. Around 34,000 of those connections are in rural areas.

Starlink has been marketed directly to consumers through its website, though the company has bought a lot of traditional marketing, such as newspaper ads and billboards and dropped leaflets in letterboxes.

Spark, One NZ, and fourth-ranked player, 2degrees, have signed on as resellers of Starlink’s more expensive business-grade version, which involves a larger, higher-gain satellite dish.

Separately, One NZ has also become a partner of Starlink’s direct-to-cell service, which it will use to eliminate mobile blackspots through satellites acting as “cell towers in the sky.”

It has been heavily promoting this service across all media but had to change its claim of “100 percent mobile coverage” after the Commerce Commission stepped in last year.

The annual levy was previously $50 million but was reduced to $12 million as large broadband infrastructure projects wound down.

Chorus—which provides and maintains the optic fibre on which all fixed broadband services run—has called for it to be returned to $50 million to fund a $2.5 billion expansion of Ultrafast Broadband (UFB) into rural areas. To date, the government has not been receptive to the idea.