7 ms·

You would have thought that Iridium would have been a cautionary tale. The first company went bk in 1999, losing $6 billion, and it could only make money when t

You would have thought that Iridium would have been a cautionary tale. The first company went bk in 1999, losing $6 billion, and it could only make money when the buyer bought it for $35 million and didn't have to pay for the capital assets. https://en.wikipedia.org/wiki/Iridium_Communications https://en.wikipedia.org/wiki/Iridium_Communications

jessriedel 7y ago
Except Iridium recently launched an entire new generation of satellites to replace their old one, and it is expected to be profitable. Likewise, lots of people expect SpaceX to make a killing on Starlink. There were good reasons to be skeptical of OneWeb, but "consumer satellite communication companies have gone bankrupt before" is not one of them.
- redis_mlc 7y ago
  Nonsense, fanboi. The only reason SpaceX is going into the satellite business is because they have 5,000 employees sitting around doing nothing. The "launch business for paying clients" just isn't big enough.
  - aquadrop 7y ago
    And? If they can simultaneously create demand for the launches and create global internet service business, what's the problem?
- RivieraKid 7y ago
  > lots of people expect SpaceX to make a killing on Starlink What lots of people expect is kind of irrelevant... OneWeb going bankrupt suggests that profit margins will be low at best, negative at worst. Cheaper launch cost is not enough to change the business from to non-viable to hugely profitable. Who will be the customers of Starlink? Internet is a commodity for the average person, you can't make money in that market. This leaves special cases such as abandoned areas, airlines, ships, but that market is much smaller and it's unclear whether it can feed the massive capital costs of Starlink: launches, satellites, ground stations. Edit: Providing service to ships in the ocean could be a problem, because of the lack of ground stations.
  - shantara 7y ago
    >OneWeb going bankrupt suggests that profit margins will be low at best, negative at worst It's too early to speculate about profit margins before the company has finished launching its constellation and started providing a commercial service.
    - gpm 7y ago
      It's the exact right time time to speculate about profit margins, if you don't have some idea of what their expected profit margins are you don't have any idea about whether or not you should invest in this endeavor.
  - lukevp 7y ago
    I grew up in a rural area. We had dial-up for years until we got point to point wireless, which capped out at 1.5 mbps. 3 of my team members live in a rural area and have similar internet. They’re all waiting to throw money at spacex as soon as it goes live. There’s millions of people in the US like them that would sign up. My wife and I are planning to move further from the city, but one of our concerns is getting decent internet (we have symmetric gigabit fiber now). Also I don’t think you truly grasp the cost efficiencies spacex has and will achieve. Elon originally said that they could lower launch costs under $1m if the only cost was propellant and minor refurbs, compared to hundreds of millions. Even today their confirmed cost is 6x less than average [1]. This is not a 20% reduction or something. It is incredibly significant. one web was launching on other companies’ rockets, so that’s an additional disadvantage since spacex is only incurring the cost of the launch and no margin since there will be recovered from the internet service. [1]: https://www.google.com/amp/s/theconversation.com/amp/how-spacex-lowered-costs-and-reduced-barriers-to-space-112586 https://www.google.com/amp/s/theconversation.com/amp/how-spa...
    - FpUser 7y ago
      "My wife and I are planning to move further from the city, but one of our concerns is getting decent internet (we have symmetric gigabit fiber now)." Exactly my situation. I have symmetric gigabit and due to a nature of my business requiring symmetric fat pipe I have to live in a city. The minute I could get that gigabit in a wilderness I am out.
bryanlarsen 7y ago
Not only Iridium, but Globalstar and Orbcomm also went through bankruptcy before becoming successful businesses.

jessriedel 7y ago

Except Iridium recently launched an entire new generation of satellites to replace their old one, and it is expected to be profitable. Likewise, lots of people expect SpaceX to make a killing on Starlink. There were good reasons to be skeptical of OneWeb, but "consumer satellite communication companies have gone bankrupt before" is not one of them.

redis_mlc 7y ago
Nonsense, fanboi. The only reason SpaceX is going into the satellite business is because they have 5,000 employees sitting around doing nothing. The "launch business for paying clients" just isn't big enough.
- aquadrop 7y ago
  And? If they can simultaneously create demand for the launches and create global internet service business, what's the problem?
RivieraKid 7y ago
> lots of people expect SpaceX to make a killing on Starlink What lots of people expect is kind of irrelevant... OneWeb going bankrupt suggests that profit margins will be low at best, negative at worst. Cheaper launch cost is not enough to change the business from to non-viable to hugely profitable. Who will be the customers of Starlink? Internet is a commodity for the average person, you can't make money in that market. This leaves special cases such as abandoned areas, airlines, ships, but that market is much smaller and it's unclear whether it can feed the massive capital costs of Starlink: launches, satellites, ground stations. Edit: Providing service to ships in the ocean could be a problem, because of the lack of ground stations.
- shantara 7y ago
  >OneWeb going bankrupt suggests that profit margins will be low at best, negative at worst It's too early to speculate about profit margins before the company has finished launching its constellation and started providing a commercial service.
  - gpm 7y ago
    It's the exact right time time to speculate about profit margins, if you don't have some idea of what their expected profit margins are you don't have any idea about whether or not you should invest in this endeavor.
- lukevp 7y ago
  I grew up in a rural area. We had dial-up for years until we got point to point wireless, which capped out at 1.5 mbps. 3 of my team members live in a rural area and have similar internet. They’re all waiting to throw money at spacex as soon as it goes live. There’s millions of people in the US like them that would sign up. My wife and I are planning to move further from the city, but one of our concerns is getting decent internet (we have symmetric gigabit fiber now). Also I don’t think you truly grasp the cost efficiencies spacex has and will achieve. Elon originally said that they could lower launch costs under $1m if the only cost was propellant and minor refurbs, compared to hundreds of millions. Even today their confirmed cost is 6x less than average [1]. This is not a 20% reduction or something. It is incredibly significant. one web was launching on other companies’ rockets, so that’s an additional disadvantage since spacex is only incurring the cost of the launch and no margin since there will be recovered from the internet service. [1]: https://www.google.com/amp/s/theconversation.com/amp/how-spacex-lowered-costs-and-reduced-barriers-to-space-112586 https://www.google.com/amp/s/theconversation.com/amp/how-spa...
  - FpUser 7y ago
    "My wife and I are planning to move further from the city, but one of our concerns is getting decent internet (we have symmetric gigabit fiber now)." Exactly my situation. I have symmetric gigabit and due to a nature of my business requiring symmetric fat pipe I have to live in a city. The minute I could get that gigabit in a wilderness I am out.

bryanlarsen 7y ago

Not only Iridium, but Globalstar and Orbcomm also went through bankruptcy before becoming successful businesses.