5 ms·

Starlink Requires $30B Investment

41 points by 11thEarlOfMar 5y ago

Jabbles 5y ago
How much would HFT firms pay for lower latency between world stock exchanges? I think that could be a significant source of income.
- gccs 5y ago
  They lay their own fiber lines. They don't want space internet.
  - wmf 5y ago
    Starlink may be faster than fiber from NY to London.
    - mkr-hn 5y ago
      People's whole model of satellite internet is anchored to the limitations of what came before with satellites tens of thousands of miles up. They need to recalibrate their thinking for satellites that might be closer than the nearest fiber repeater on their wired ISP's backbone provider.
  - bryanlarsen 5y ago
    The speed of light in a vacuum is 50% faster than the speed of light in optical fiber.
rblatz 5y ago
I wonder if this is a signal that Musk is ready to spin off Starlink and IPO to raise the needed capital.
- lapp0 5y ago
  It's some form of typical Musk charlatanism, that's for sure.
  - deleted 5y ago
    [deleted]
  - lapp0 5y ago
    Oh, no, is this a Musk-worshipping ecosystem? RIP my karma points
    - jamestimmins 5y ago
      The downvoting is because it's a low effort comment that is more about being snarky than attempting to provide an insightful comment. Elon Musk has legitimate reasons for criticism; sarcastically dismissing him as a charlatan isn't a productive way of doing so.
      - lapp0 5y ago
        In my defense, dismissing him as a charlatan and not engaging with his latest news is the most effective way to combat Musk-ism. People have taken him seriously long enough and in enough numbers to give him some air of legitimacy when none is deserved. It's the same strategy with internet trolls; you either ignore them completely, or call them out on trolling and engage no further. Musk is, in some sense, the internet's largest troll. And droves of people have taken the bait.
        Tepix 5y ago
        I suggest you talk to the thousands of happy starlink customers on the r/starlink subreddit.
        lapp0 5y ago
        Capitalist scumbag leverages capital to create a useful service that some people find useful. Wow! By that metric, <Walmart ; McDonalds ; Nestle ; Activision ; Eli Lilly ; choose your favorite corporation> are a great boon to humanity and we would be so lost without them!
mciancia 5y ago
> Starlink would need a few million subscribers paying about $99 a month each to recoup a $5 billion investment in a year’s time That doesn't seem like a lot, considering it is a global ISP. Also, good that Elon's net worth is still pretty high (looks like 165B now) so he can possibly fund it himself for the most part
- deleted 5y ago
  [deleted]
- dragontamer 5y ago
  It seems like a lot, when each Satellite seems to only support 20Gbps or 40Gbps. So to support 100Mbit customers, you need to launch a Satellite once for every 40 customers. Each customer needs a $1000 to $3000 dish to connect to the Satellite (currently $500, so you need almost a year of $99 subscription before you make back the money from the dish alone, and then another few years to recoup the costs of the Satellite launches). This at a time when 5G is beginning to be deployed in mass quantities... and Gbps fiber is available in cities. So cityfolk won't really use Starlink, and 5G will cover many rural areas. Finally: ~~directional WiFi~~ (Woops: got my terms mixedup. Apparently its "Fixed Wireless") works surprisingly well out in rural areas for 50-mile ranges. So if you can get a line-of-sight radio out there, a small town ISP can still deploy over a relatively rural area. EDIT: Directional Wifi is like 1 mile. I got my technologies confused. Only the most rural of areas (over 50-miles away from the nearest potential directional WiFi spots, with no access to 5G or Fiber Optics) would use Starlink, which is... not where people live by definition. Can Musk find millions of rural folk and build an internet service with them?
  - wmf 5y ago
    The math is more complicated than that. Oversubscription reduces the number of satellites needed while oceans increase it.
    - dragontamer 5y ago
      While that's true, my Physics teacher always said that a crappy calculation that's within-an-order of magnitude is always better than gut-feeling. If we're talking about feasibility and/or if something is a good idea, then once all the math is added up, then we need to see that the final costs are "really really good". EDIT: As long as we're clear on each other's math / assumptions, we can make "napkin level" estimates to guess at the feasibility of this project.
mdorazio 5y ago
Ok, I think a few points of clarification are needed since this article's choice of quotes and framing is strange. 1) The title implies outside funding is needed, but this isn't true. SpaceX estimates it will require $5-10B of internal funding to reach its targets. This should surprise no one considering the scope of what they are building. 2) "Starlink would need a few million subscribers paying about $99 a month each to recoup a $5 billion investment in a year’s time, said analyst Tim Farrar, president of TMF Associates." Except that there's no explanation of why they need to recoup investment costs in a single year. You don't build a factory and then expect the capital expenditure to be recouped in the first year of ops, so why would a satellite network be different... 3) “It is not implausible to get this number (a few million) to make the system not to go bankrupt. But this is not enough to justify the valuation of SpaceX,” except that SpaceX isn't a satellite internet company, it's a space launch company that is also building a satellite internet network. Its valuation is based on being far and away the launch leader on every metric that matters.
- jlmorton 5y ago
  Yeah, I don't see any issue with Starlink getting subscribers. HughesNet has 1.3 million subscribers in the US and Canada alone. ViaSat has 600,000. There are 10x that on slow rural DSL. And that's just North America. Demand is not going to be the problem for Starlink. If they can roll-out a service just a bit more reliable than their current beta, and they can increase their network capacity fast enough, they will have tens of millions of subscribers in a few years.
  - xkjkls 5y ago
    HughesNet only has a billion in revenue though. With a $30 billion + investment in the network, Starlink needs to have far far more subscribes than that to be able to recoup the costs.
    - wmf 5y ago
      Fortunately Starlink is global so the addressable market is more like 100M customers.
rootusrootus 5y ago
I've got it on order. But I may ultimately decide to stick with wired Internet anyway. What I really want is for Starlink to open up for mobile use. When that happens, I may reverse my camping style and instead of going out on the weekends and coming home during the week, I may come visit home on the weekends and stay in the wilderness to work remotely :)
- Syonyk 5y ago
  What's wrong with your wired internet that you're considering Starlink? It's better than rural WISPs by far... most of the time... but even compared to DSL it loses out on things like consistent latency and packet loss. Yes, you do see the 300+Mbit spikes, but it's realistically closer to 50Mbit average - which, again, for rural areas, is really quite good. I have it, I mostly like it, but it's still my backup/bulk transfer connection, and I keep a rural WISP for my primary work connection because it's less prone to the random glitches and hiccups that Starlink suffers, and because I have a public IP instead of CGNAT, my VPN devices and SSH connections all seem to recover a lot more reasonably from packet loss on that link than on Starlink. For mobile use (RVs and such), absolutely, it makes a lot of sense (if you can handle the power use). But I didn't think cell roaming was enabled yet - maybe I missed something.
  - topspin 5y ago
    > What's wrong with your wired internet that you're considering Starlink? One problem is that wired service relies on commercial power. When you have 100+ miles of unmanaged tree growth between you and your power company you lose power a lot. 'Lot' is several times a year for anything from a few minutes to a few days. Everyone that lives as I do has some degree of backup power. Internet service that can run on such backup power is rather appealing.
  - rootusrootus 5y ago
    > What's wrong with your wired internet that you're considering Starlink? We had a one week Internet outage earlier this year and there was not a single peep from Comcast. They couldn't say whether they were even working on it, or give any ETA on having it up again. I understand outages, especially related to weather, but the utter lack of any kind of communication infuriates me. I rely on Internet to get my work done, so I wanted an alternative. Ideally I'd keep both. But that would be a moderately expensive luxury to avoid an occasional outage. I'm definitely more interested in the mobile possibilities, the farther I get from the outage earlier this year and my anger recedes :)
TrainedMonkey 5y ago
> investment costs before Starlink achieves fully positive cash flow would be $5-$10 billion. This does not seem too bad, considering that majority of that cash will be raised once most technical risks are addressed.
chiph 5y ago
Cringely speculates that Starlink is getting funding from the FCC's rural broadband fund - which currently has $16bn available. Starlink is bidding on broadband auctions that the traditional ISPs won't because it'd be unprofitable for them to run cable/fiber to the residences. Which isn't a problem for a satellite operator like Starlink. https://www.cringely.com/2021/04/20/starlink-is-a-global-isp-built-at-zero-cost-to-spacex-enabling-nasas-artemis-launch/ https://www.cringely.com/2021/04/20/starlink-is-a-global-isp...
- pavon 5y ago
  I think other telcos subcontracting their bids to SpaceX is highly unlikely. Especially since their aren't really any penalties for not completing all the build-out they bid on. So the non-speculative part is that SpaceX was awarded $885M, which is a good chunk of money, but a small fraction of the $30B they will need.
deleted 5y ago
[deleted]

41 points by 11thEarlOfMar 5y ago

How much would HFT firms pay for lower latency between world stock exchanges? I think that could be a significant source of income.

gccs 5y ago
They lay their own fiber lines. They don't want space internet.
- wmf 5y ago
  Starlink may be faster than fiber from NY to London.
  - mkr-hn 5y ago
    People's whole model of satellite internet is anchored to the limitations of what came before with satellites tens of thousands of miles up. They need to recalibrate their thinking for satellites that might be closer than the nearest fiber repeater on their wired ISP's backbone provider.
- bryanlarsen 5y ago
  The speed of light in a vacuum is 50% faster than the speed of light in optical fiber.

rblatz 5y ago

I wonder if this is a signal that Musk is ready to spin off Starlink and IPO to raise the needed capital.

lapp0 5y ago
It's some form of typical Musk charlatanism, that's for sure.
- deleted 5y ago
  [deleted]
- lapp0 5y ago
  Oh, no, is this a Musk-worshipping ecosystem? RIP my karma points
  - jamestimmins 5y ago
    The downvoting is because it's a low effort comment that is more about being snarky than attempting to provide an insightful comment. Elon Musk has legitimate reasons for criticism; sarcastically dismissing him as a charlatan isn't a productive way of doing so.
    - lapp0 5y ago
      In my defense, dismissing him as a charlatan and not engaging with his latest news is the most effective way to combat Musk-ism. People have taken him seriously long enough and in enough numbers to give him some air of legitimacy when none is deserved. It's the same strategy with internet trolls; you either ignore them completely, or call them out on trolling and engage no further. Musk is, in some sense, the internet's largest troll. And droves of people have taken the bait.
      - Tepix 5y ago
        I suggest you talk to the thousands of happy starlink customers on the r/starlink subreddit.
        lapp0 5y ago
        Capitalist scumbag leverages capital to create a useful service that some people find useful. Wow! By that metric, <Walmart ; McDonalds ; Nestle ; Activision ; Eli Lilly ; choose your favorite corporation> are a great boon to humanity and we would be so lost without them!

mciancia 5y ago

> Starlink would need a few million subscribers paying about $99 a month each to recoup a $5 billion investment in a year’s time That doesn't seem like a lot, considering it is a global ISP. Also, good that Elon's net worth is still pretty high (looks like 165B now) so he can possibly fund it himself for the most part

deleted 5y ago
[deleted]
dragontamer 5y ago
It seems like a lot, when each Satellite seems to only support 20Gbps or 40Gbps. So to support 100Mbit customers, you need to launch a Satellite once for every 40 customers. Each customer needs a $1000 to $3000 dish to connect to the Satellite (currently $500, so you need almost a year of $99 subscription before you make back the money from the dish alone, and then another few years to recoup the costs of the Satellite launches). This at a time when 5G is beginning to be deployed in mass quantities... and Gbps fiber is available in cities. So cityfolk won't really use Starlink, and 5G will cover many rural areas. Finally: ~~directional WiFi~~ (Woops: got my terms mixedup. Apparently its "Fixed Wireless") works surprisingly well out in rural areas for 50-mile ranges. So if you can get a line-of-sight radio out there, a small town ISP can still deploy over a relatively rural area. EDIT: Directional Wifi is like 1 mile. I got my technologies confused. Only the most rural of areas (over 50-miles away from the nearest potential directional WiFi spots, with no access to 5G or Fiber Optics) would use Starlink, which is... not where people live by definition. Can Musk find millions of rural folk and build an internet service with them?
- wmf 5y ago
  The math is more complicated than that. Oversubscription reduces the number of satellites needed while oceans increase it.
  - dragontamer 5y ago
    While that's true, my Physics teacher always said that a crappy calculation that's within-an-order of magnitude is always better than gut-feeling. If we're talking about feasibility and/or if something is a good idea, then once all the math is added up, then we need to see that the final costs are "really really good". EDIT: As long as we're clear on each other's math / assumptions, we can make "napkin level" estimates to guess at the feasibility of this project.

mdorazio 5y ago

Ok, I think a few points of clarification are needed since this article's choice of quotes and framing is strange. 1) The title implies outside funding is needed, but this isn't true. SpaceX estimates it will require $5-10B of internal funding to reach its targets. This should surprise no one considering the scope of what they are building. 2) "Starlink would need a few million subscribers paying about $99 a month each to recoup a $5 billion investment in a year’s time, said analyst Tim Farrar, president of TMF Associates." Except that there's no explanation of why they need to recoup investment costs in a single year. You don't build a factory and then expect the capital expenditure to be recouped in the first year of ops, so why would a satellite network be different... 3) “It is not implausible to get this number (a few million) to make the system not to go bankrupt. But this is not enough to justify the valuation of SpaceX,” except that SpaceX isn't a satellite internet company, it's a space launch company that is also building a satellite internet network. Its valuation is based on being far and away the launch leader on every metric that matters.

jlmorton 5y ago
Yeah, I don't see any issue with Starlink getting subscribers. HughesNet has 1.3 million subscribers in the US and Canada alone. ViaSat has 600,000. There are 10x that on slow rural DSL. And that's just North America. Demand is not going to be the problem for Starlink. If they can roll-out a service just a bit more reliable than their current beta, and they can increase their network capacity fast enough, they will have tens of millions of subscribers in a few years.
- xkjkls 5y ago
  HughesNet only has a billion in revenue though. With a $30 billion + investment in the network, Starlink needs to have far far more subscribes than that to be able to recoup the costs.
  - wmf 5y ago
    Fortunately Starlink is global so the addressable market is more like 100M customers.

rootusrootus 5y ago

I've got it on order. But I may ultimately decide to stick with wired Internet anyway. What I really want is for Starlink to open up for mobile use. When that happens, I may reverse my camping style and instead of going out on the weekends and coming home during the week, I may come visit home on the weekends and stay in the wilderness to work remotely :)

Syonyk 5y ago
What's wrong with your wired internet that you're considering Starlink? It's better than rural WISPs by far... most of the time... but even compared to DSL it loses out on things like consistent latency and packet loss. Yes, you do see the 300+Mbit spikes, but it's realistically closer to 50Mbit average - which, again, for rural areas, is really quite good. I have it, I mostly like it, but it's still my backup/bulk transfer connection, and I keep a rural WISP for my primary work connection because it's less prone to the random glitches and hiccups that Starlink suffers, and because I have a public IP instead of CGNAT, my VPN devices and SSH connections all seem to recover a lot more reasonably from packet loss on that link than on Starlink. For mobile use (RVs and such), absolutely, it makes a lot of sense (if you can handle the power use). But I didn't think cell roaming was enabled yet - maybe I missed something.
- topspin 5y ago
  > What's wrong with your wired internet that you're considering Starlink? One problem is that wired service relies on commercial power. When you have 100+ miles of unmanaged tree growth between you and your power company you lose power a lot. 'Lot' is several times a year for anything from a few minutes to a few days. Everyone that lives as I do has some degree of backup power. Internet service that can run on such backup power is rather appealing.
- rootusrootus 5y ago
  > What's wrong with your wired internet that you're considering Starlink? We had a one week Internet outage earlier this year and there was not a single peep from Comcast. They couldn't say whether they were even working on it, or give any ETA on having it up again. I understand outages, especially related to weather, but the utter lack of any kind of communication infuriates me. I rely on Internet to get my work done, so I wanted an alternative. Ideally I'd keep both. But that would be a moderately expensive luxury to avoid an occasional outage. I'm definitely more interested in the mobile possibilities, the farther I get from the outage earlier this year and my anger recedes :)

TrainedMonkey 5y ago

> investment costs before Starlink achieves fully positive cash flow would be $5-$10 billion. This does not seem too bad, considering that majority of that cash will be raised once most technical risks are addressed.

chiph 5y ago

Cringely speculates that Starlink is getting funding from the FCC's rural broadband fund - which currently has $16bn available. Starlink is bidding on broadband auctions that the traditional ISPs won't because it'd be unprofitable for them to run cable/fiber to the residences. Which isn't a problem for a satellite operator like Starlink. https://www.cringely.com/2021/04/20/starlink-is-a-global-isp-built-at-zero-cost-to-spacex-enabling-nasas-artemis-launch/ https://www.cringely.com/2021/04/20/starlink-is-a-global-isp...

pavon 5y ago
I think other telcos subcontracting their bids to SpaceX is highly unlikely. Especially since their aren't really any penalties for not completing all the build-out they bid on. So the non-speculative part is that SpaceX was awarded $885M, which is a good chunk of money, but a small fraction of the $30B they will need.

deleted 5y ago

[deleted]