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For a ~$10 billion constellation with an individual satellite lifespan of 5 years, the system would need to average ~$170 million per month for something resemb
by tomatotomato37 8y ago
For a ~$10 billion constellation with an individual satellite lifespan of 5 years, the system would need to average ~$170 million per month for something resembling break-even. Current US satellite internet adoption is at 6.7% percent; push that up to 10% so I have some number to work with when accounting for market penetration and the rest of the world, and you’re looking at 32.5 million users, which sets an absolute price floor of $5.25 a month. Give it margins that actually make this remotely profitable and $20 a month for service wouldn't be unrealistic; the upfront costs of the uplink would probably still kill you though.
Edit: Did some more research on competitors. It seems ViaSat currently has 1.1 billion invested in its 2 active GEOs, plus whatever’s currently going in their next generation constellation. Their bargain bin plan goes for $70 a month (fun fact, they too pull the 3 month deal BS landline ISPs do) up to $200 a month. Since it only has a single real competitor it probably services 3% of the US population, so with their midplan of $150 a month over 9.75 million users into a satellite constellation with a lifespan of 8 years they are charging in the neighborhood of %12,700 over their satellite breakeven (1.46 billion month revenue over 11.46 million per month payback).
Bringing that over to a $10 billion constellation with much more premium internet, yikes.
- ryanmarsh 8y agoCurrent US satellite internet adoption is at 6.7% percent Current US satellite adoption doesn't matter in this case because the new product would not suck. Satellite internet is not a viable competitor today for the various reasons others have stated here. Starlink however would compete directly with my DSL service and since I (and pretty much everyone else) hate our telco, the sky is the limit as they say.
- shaklee3 8y agoThat's completely wrong. It's 100% not going to compete with DSL. It will be used by enterprise, or people who pay $100+/more to offset equipment costs. The reason satellite internet costs so much is equipment cost.
- kartickv 8y agoI agree with you but on second thoughts, maybe that's okay if it pays for itself over time? I pay my ISP ₹3K a month. I wouldn't mind buying SpaceX's router for say ₹30K if my bill drops to ₹1K a month.
- shaklee3 8y agoI don't think they'll be able to sell in India. ISRO and the government are typically not friendly to other countries providing services like this.
- kartickv 8y agoI'm sure something can be worked out with an Indian partner company letting the government block sites it doesn't want and spying on us, like existing ISPs do.
- shaklee3 8y agoIt didn't work out for Facebook, so I'm not sure it will. SpaceX isn't trying to connect people below they poverty line, so unless they convince India that the rich need it, I can't see it happening. https://www.theguardian.com/technology/2016/may/12/facebook-free-basics-india-zuckerberg https://www.theguardian.com/technology/2016/may/12/facebook-...
- kartickv 8y agoStarlink wouldn't be in violation of net neutrality, so the comparison with Free Basics isn't the right one. It will take off if it's better bang for the buck at any market segment. That can be Rs. 100 a month or Rs.2000 a month. If it's better than the alternatives people can get at that price, they'll use it.
- shaklee3 8y agoMore context: https://www.televisionpost.com/dosisro-initiating-efforts-to-migrate-dth-ops-from-foreign-to-indian-satellites-rathore/ https://www.televisionpost.com/dosisro-initiating-efforts-to... FB was net neutrality, but they want to keep as much as possible, including all communications, with their own technology.
- shaklee3 8y agoYou completely forgot the ground cpe equipment cost. That will be a substantial adder.
- kartickv 8y agoI was also wondering about this — will it be significantly costlier than a commodity fiber / cable/ VDSL router? If it's going to cost say $500, far fewer people around the world will be able to afford one.
- shaklee3 8y agoThe lowest estimate I've seen for the cpe cost is around $1000. I think it will be closer to $2-3K.
- kartickv 8y agoOuch. That's viable for consumers only if it's shared, like by providing an open Wifi access point to everyone around it, or via Ethernet in an apartment or a small village.