5 ms·

Starlink may now have global revenue of $44M monthly

44 points by walrus01 4y ago

400,000 live CPE terminals at minimum $110 USD per month per live terminal https://www.cnbc.com/2022/05/25/spacexs-starlink-surpasses-400000-subscribers-globally.html Obviously they are not sharing what it costs them to build a batch of 53 satellites and a new second stage, and refurbish a falcon 9 first stage for each new launch. There have been four starlink launches all with successful first stage landing just in the month of May. https://en.wikipedia.org/wiki/List_of_Starlink_launches

deleted 4y ago
[deleted]
aetherson 4y ago
Is the revenue $110/month internationally, or is that just the US rate?
- walrus01 4y ago
  the terminals in AU, NZ, CA are all billed in local currency at a higher price but the currency conversion works out to approx. $110 USD/mo same as the US domestic terminals.
  - cdot2 4y ago
    Why wouldn't it? The cost to SpaceX shouldn't be significantly different per location. Maybe competition would drive different prices in different areas?
    - notahacker 4y ago
      Some markets are more likely to pay a $110 rate than others (and most of the cost is up front, not per user)
    - bryanlarsen 4y ago
      I expect service to Africa will eventually be considerably cheaper than $110 per month. If the satellites are completely unused while flying over Africa, that's wasted potential. But before they can offer better prices they need to get the cost of the terminals down below the price they're selling them at. Alternatively they might offer kits to wire an entire village with a single terminal. That way the per terminal cost is still high but per user costs are low.
Xeoncross 4y ago
Are their any other large batch "donation" terminals besides those sent to Ukraine?
- dashundchen 4y ago
  Just to be clear, a substantial amount of that "donation" was actually funded by the federal government's USAID. Full details of the agreement aren't public as of yet AFAIK but USAID covered shipping and paid Starlink millions for terminals and potentially service.
  - walrus01 4y ago
    I think the number I saw was either 3000 purchased by USAID and 2000 donated, or vice versa.
pclmulqdq 4y ago
To put some numbers on their costs, one Soyuz launch is about $40-50 million. A falcon 9 is probably a bit more expensive - Soyuz rockets are extremely cheap despite not being reusable. If the launches are dedicated solely to Starlink and not sharing significant payload space, that is about $200 million in expenses for the year. Assuming a 5 year working life before the satellites de-orbit, the satellites launched this year have $40 million of depreciation. Other satellites have likely been launched as well and are depreciating in orbit. That suggests that Starlink needs about 2-4x the paying customer base as today (depending on working life of satellites and launch costs, etc.) to break even. That's a lot better than I was expecting. Edit - someone pointed out that the $44M figure was monthly, not annual. In that case, it might be profitable. Also, I am aware of all of the "reusable" arguments, but a SpaceX launch still retails for $67M, while a Soyuz launch is still a lot cheaper at retail. This includes the cost factors of re-usability. Most of the cost of a rocket launch is fuel, not the metal tube.
- onlyrealcuzzo 4y ago
  Wait. If the satellites cost $200M to launch, and they make $44M per month - why do they need 4x more customers to break even? Unless I'm missing something the 5-year unit economics look outstanding already.
  - walrus01 4y ago
    their calculation may be based on the need to continually replace the satellites because their low orbits and relatively limited ion thruster fuel supply means each satellite has an expected 4-5 year service life.
    - onlyrealcuzzo 4y ago
      $44M * 12 * 4 = $2112M (revenue). The supposed cost to launch these was only $200M according to GP. So I'm wondering - why do they need to make 4x as much money ($8B) to make a profit in a $200M investment? Obviously R&D. But is it that much?!
candiddevmike 4y ago
IMO, I'm unsure starlink can stick the landing. I think they'll end up facing challenging oversubscription issues, which is why they're slowing the roll out. 5G could easily expand to fill in the service gaps and deliver better, more reliable service. I think the key differentiator that everyone assumed was going to be included ASAP was a global mesh network, with the ground based repeater setup it's not that novel of a solution.
- junon 4y ago
  Perhaps a dumb question but what does oversubscription entail here?
  - Sebguer 4y ago
    Too many people, not enough bandwidth.
  - candiddevmike 4y ago
    Latency, timeouts, general slowness. There are a lot of layers that starlink needs to optimize/scale, they're effectively trying to operate as a global cell provider.
  - whatshisface 4y ago
    Starlink announces that they will make service available at a certain quality for $X/month, but more people want that than they can sell it to. Basic economic theory says they should raise the price to find equilibrium, but consumers hate that kind of thing, tying (in some cases) the company's hands. I don't really think that Starlink's hands are tied with respect to price increases, though. I doubt over-subscription is all that possible, unless they overestimated their own capacity when signing existing contracts.
    - out_of_protocol 4y ago
      Also, they can sell a set of one dish plus some wifi/wimax repeaters for the whole village or something. Could be really nice solution for both sides
axg11 4y ago
Starlink is such a brilliant move by SpaceX, both financially and how it has demonstrated excellence in areas that are nothing to do with rocket development. How many other similar companies could successfully spin up a direct to consumer side business? Granted, building the Starlink satellites themselves is well within their wheelhouse, but scaling production of the terminals is also impressive.
- justapassenger 4y ago
  > How many other similar companies could successfully spin up a direct to consumer side business? They have span up direct to consumer business. It’s waaaay to early to tell if it’s successful. It’s burning tons of money as of today, and without it their main business (falcon 9) launches would be in decline.
  - tuatoru 4y ago
    * "have spun" (past perfect/completed action). But kudos for not making "spin" a weak verb: "have spinned". The only complaints I have heard about Starlink are "it's taking too long! I put money down months/years ago and I haven't got a terminal yet!" User reports are uniformly of good to excellent service -- especially compared to the alternatives available in its intended service areas. My impressions are that if SpaceX were not supply constrained for its terminals, that $44M per month could be $220M per month at this point, and that there is room for another five-fold increase at least. Starlink has no direct competitors and a high barrier to entry into its niche. Projected steady state revenue seems to be well above steady-state cost, so I don't see why SpaceX can't continue to obtain funds for Starlink if it needs them.
    - justapassenger 4y ago
      You should hang out on r/starlink. There’re very happy people, but also lots of upset people, with horrible quality of service, and non existent customer support. Same with my friends - I have few happy ones, and one person who’s screwed and can only scream into void. Comcast support is world class compared to starlink. Let’s ignore that starlink has tons of competitors (hint, hint - other ISPs). There’re of course areas where they provide much better service than their local competitors, but it’s very questionable if remote areas have enough of wealthy people to pay for starlink, where no other competition will fight them. But even ignoring all of that - none of what you said means they’re successful business. It means they’re business, and as of today, they’re like Uber rides for $5 across whole San Francisco in 2015. They’re selling 1 dollar for 90 cents.
allears 4y ago
Just the launch costs, including refurbishing and a 2nd stage, are in the tens of millions. That's a lot cheaper than any other comparable launch vehicle, but when you consider how many launches and how many satellites it's taking to build their network, $44M a month doesn't sound like it's beginning to make them a profit yet.
elif 4y ago
Skepticism of the bottom line will be short-lived. Consider the economics of starship + starlink 2.0: No more second stage cost, cheap propellant, an order of magnitude more connectivity per satellite, way fewer ground links required. When the laser line of sight distances surpass those of terrain-constrained cables, it might start making sense to host latency-dependent servers in orbit. At that point, starlink begins to resemble internet 2.0
- justapassenger 4y ago
  Economic of starship are wishy washy aspirations of a guy who’s known to pull numbers out of his ass, without any research. Very successful in creating business, but never based on original numbers.
- tengbretson 4y ago
  It sounds crazy, but I think edge computing in space is really going to be a killer advantage.
  - candiddevmike 4y ago
    Edge computing at the cell tower is more of an advantage, at least until starlink or whoever figures out mesh networking in space.
  - more_corn 4y ago
    You are right. That does sound crazy.
  - bryanlarsen 4y ago
    Heat dissipation is hard in space and probably makes this infeasible.
  - tsimionescu 4y ago
    How exactly do you imagine running software somewhere heat can't be dissipated, expensive shielded electronics are required, and software needs to be redesigned so that it handles the constant random bit flips is a "killer advantage"?
vanattab 4y ago
I just recently saw the release of RV service and am interested but I don't want to play $1000 and be on a 12 month wait list. Anyone know what the current wait time is after ordering service?
- candiddevmike 4y ago
  Do you really take your RV to places without cell service enough to justify the cost? I see so many RV folks jumping on this but I don't see how you could justify it unless you spend the majority of the year in the middle of nowhere.
  - bombcar 4y ago
    The cost is to never have to think about it again. That can be worth more than the service itself.
  - samstave 4y ago
    WElp, If anyone wants to join me, we could easily map out every single RV park in the US - and create an ISP where we install an uplink at every one and then feed all the RV locations in the US with wifi with starlink uplink accounts, and this list is just the camping/public ones... Most residential RV parks are being bought up by hedge funds. Go after a list of the hedgefunds and offer the service to them as an ammenity they can charge the park residents for... [0] https://www.campgroundviews.com/map-based-search/ https://www.campgroundviews.com/map-based-search/
  - vanattab 4y ago
    I work remote and am planing to live full time in my van/rv for a year. I might have SOME 4g coverage in most places but it's definitely spotty and if I am remote desktop into a client's machine it need a stable connection.
- walrus01 4y ago
  The RV service ships immediately if you order it but is lower in traffic priority for speeds when you use it in a fully populated sold out cell.
nimos 4y ago
Seems like there is a lot of higher margin opportunity than residential available in business/gov. I see they have a business at 500/mo. Wonder what the breakdown is. Judging from their land coverage they are still a bit off doing container/oil/bulk/cruise/yatchs. With better coverage it seems like yachts/boating could run pretty high margin given the current options. It will be interesting to see the induced demand starlink has. With remote work it makes stuff like rural housing and long term cruising a viable living option for a lot more people. The way pricing is going on solar/batteries off grid is becoming pretty reasonable if you are willing to not mcmansion.
metadat 4y ago
What about the long term cost of all the space trash from starlink satellites and the stuff they run into, and the telescope light imaging they pollute and interfere with? Are these externalities priced in?
- bryanlarsen 4y ago
  Starlink is in a very low orbit. Any satellite that low deorbits quickly if not under active control. It's not a space junk concern. SpaceX would be the biggest loser if space junk ever became an issue.
dang 4y ago
For a submission like this, please submit the main URL (in this case I suppose that would be https://www.cnbc.com/2022/05/25/spacexs-starlink-surpasses-400000-subscribers-globally.html https://www.cnbc.com/2022/05/25/spacexs-starlink-surpasses-4...) and then add your take via a comment in the thread. That way your take is on a level playing field with everyone else's. This is in the FAQ (https://news.ycombinator.com/newsfaq.html https://news.ycombinator.com/newsfaq.html).

44 points by walrus01 4y ago

deleted 4y ago

[deleted]

aetherson 4y ago

Is the revenue $110/month internationally, or is that just the US rate?

walrus01 4y ago
the terminals in AU, NZ, CA are all billed in local currency at a higher price but the currency conversion works out to approx. $110 USD/mo same as the US domestic terminals.
- cdot2 4y ago
  Why wouldn't it? The cost to SpaceX shouldn't be significantly different per location. Maybe competition would drive different prices in different areas?
  - notahacker 4y ago
    Some markets are more likely to pay a $110 rate than others (and most of the cost is up front, not per user)
  - bryanlarsen 4y ago
    I expect service to Africa will eventually be considerably cheaper than $110 per month. If the satellites are completely unused while flying over Africa, that's wasted potential. But before they can offer better prices they need to get the cost of the terminals down below the price they're selling them at. Alternatively they might offer kits to wire an entire village with a single terminal. That way the per terminal cost is still high but per user costs are low.

Xeoncross 4y ago

Are their any other large batch "donation" terminals besides those sent to Ukraine?

dashundchen 4y ago
Just to be clear, a substantial amount of that "donation" was actually funded by the federal government's USAID. Full details of the agreement aren't public as of yet AFAIK but USAID covered shipping and paid Starlink millions for terminals and potentially service.
- walrus01 4y ago
  I think the number I saw was either 3000 purchased by USAID and 2000 donated, or vice versa.

pclmulqdq 4y ago

To put some numbers on their costs, one Soyuz launch is about $40-50 million. A falcon 9 is probably a bit more expensive - Soyuz rockets are extremely cheap despite not being reusable. If the launches are dedicated solely to Starlink and not sharing significant payload space, that is about $200 million in expenses for the year. Assuming a 5 year working life before the satellites de-orbit, the satellites launched this year have $40 million of depreciation. Other satellites have likely been launched as well and are depreciating in orbit. That suggests that Starlink needs about 2-4x the paying customer base as today (depending on working life of satellites and launch costs, etc.) to break even. That's a lot better than I was expecting. Edit - someone pointed out that the $44M figure was monthly, not annual. In that case, it might be profitable. Also, I am aware of all of the "reusable" arguments, but a SpaceX launch still retails for $67M, while a Soyuz launch is still a lot cheaper at retail. This includes the cost factors of re-usability. Most of the cost of a rocket launch is fuel, not the metal tube.

onlyrealcuzzo 4y ago
Wait. If the satellites cost $200M to launch, and they make $44M per month - why do they need 4x more customers to break even? Unless I'm missing something the 5-year unit economics look outstanding already.
- walrus01 4y ago
  their calculation may be based on the need to continually replace the satellites because their low orbits and relatively limited ion thruster fuel supply means each satellite has an expected 4-5 year service life.
  - onlyrealcuzzo 4y ago
    $44M * 12 * 4 = $2112M (revenue). The supposed cost to launch these was only $200M according to GP. So I'm wondering - why do they need to make 4x as much money ($8B) to make a profit in a $200M investment? Obviously R&D. But is it that much?!

candiddevmike 4y ago

IMO, I'm unsure starlink can stick the landing. I think they'll end up facing challenging oversubscription issues, which is why they're slowing the roll out. 5G could easily expand to fill in the service gaps and deliver better, more reliable service. I think the key differentiator that everyone assumed was going to be included ASAP was a global mesh network, with the ground based repeater setup it's not that novel of a solution.

junon 4y ago
Perhaps a dumb question but what does oversubscription entail here?
- Sebguer 4y ago
  Too many people, not enough bandwidth.
- candiddevmike 4y ago
  Latency, timeouts, general slowness. There are a lot of layers that starlink needs to optimize/scale, they're effectively trying to operate as a global cell provider.
- whatshisface 4y ago
  Starlink announces that they will make service available at a certain quality for $X/month, but more people want that than they can sell it to. Basic economic theory says they should raise the price to find equilibrium, but consumers hate that kind of thing, tying (in some cases) the company's hands. I don't really think that Starlink's hands are tied with respect to price increases, though. I doubt over-subscription is all that possible, unless they overestimated their own capacity when signing existing contracts.
  - out_of_protocol 4y ago
    Also, they can sell a set of one dish plus some wifi/wimax repeaters for the whole village or something. Could be really nice solution for both sides

axg11 4y ago

Starlink is such a brilliant move by SpaceX, both financially and how it has demonstrated excellence in areas that are nothing to do with rocket development. How many other similar companies could successfully spin up a direct to consumer side business? Granted, building the Starlink satellites themselves is well within their wheelhouse, but scaling production of the terminals is also impressive.

justapassenger 4y ago
> How many other similar companies could successfully spin up a direct to consumer side business? They have span up direct to consumer business. It’s waaaay to early to tell if it’s successful. It’s burning tons of money as of today, and without it their main business (falcon 9) launches would be in decline.
- tuatoru 4y ago
  * "have spun" (past perfect/completed action). But kudos for not making "spin" a weak verb: "have spinned". The only complaints I have heard about Starlink are "it's taking too long! I put money down months/years ago and I haven't got a terminal yet!" User reports are uniformly of good to excellent service -- especially compared to the alternatives available in its intended service areas. My impressions are that if SpaceX were not supply constrained for its terminals, that $44M per month could be $220M per month at this point, and that there is room for another five-fold increase at least. Starlink has no direct competitors and a high barrier to entry into its niche. Projected steady state revenue seems to be well above steady-state cost, so I don't see why SpaceX can't continue to obtain funds for Starlink if it needs them.
  - justapassenger 4y ago
    You should hang out on r/starlink. There’re very happy people, but also lots of upset people, with horrible quality of service, and non existent customer support. Same with my friends - I have few happy ones, and one person who’s screwed and can only scream into void. Comcast support is world class compared to starlink. Let’s ignore that starlink has tons of competitors (hint, hint - other ISPs). There’re of course areas where they provide much better service than their local competitors, but it’s very questionable if remote areas have enough of wealthy people to pay for starlink, where no other competition will fight them. But even ignoring all of that - none of what you said means they’re successful business. It means they’re business, and as of today, they’re like Uber rides for $5 across whole San Francisco in 2015. They’re selling 1 dollar for 90 cents.

allears 4y ago

Just the launch costs, including refurbishing and a 2nd stage, are in the tens of millions. That's a lot cheaper than any other comparable launch vehicle, but when you consider how many launches and how many satellites it's taking to build their network, $44M a month doesn't sound like it's beginning to make them a profit yet.

elif 4y ago

Skepticism of the bottom line will be short-lived. Consider the economics of starship + starlink 2.0: No more second stage cost, cheap propellant, an order of magnitude more connectivity per satellite, way fewer ground links required. When the laser line of sight distances surpass those of terrain-constrained cables, it might start making sense to host latency-dependent servers in orbit. At that point, starlink begins to resemble internet 2.0

justapassenger 4y ago
Economic of starship are wishy washy aspirations of a guy who’s known to pull numbers out of his ass, without any research. Very successful in creating business, but never based on original numbers.
tengbretson 4y ago
It sounds crazy, but I think edge computing in space is really going to be a killer advantage.
- candiddevmike 4y ago
  Edge computing at the cell tower is more of an advantage, at least until starlink or whoever figures out mesh networking in space.
- more_corn 4y ago
  You are right. That does sound crazy.
- bryanlarsen 4y ago
  Heat dissipation is hard in space and probably makes this infeasible.
- tsimionescu 4y ago
  How exactly do you imagine running software somewhere heat can't be dissipated, expensive shielded electronics are required, and software needs to be redesigned so that it handles the constant random bit flips is a "killer advantage"?

vanattab 4y ago

I just recently saw the release of RV service and am interested but I don't want to play $1000 and be on a 12 month wait list. Anyone know what the current wait time is after ordering service?

candiddevmike 4y ago
Do you really take your RV to places without cell service enough to justify the cost? I see so many RV folks jumping on this but I don't see how you could justify it unless you spend the majority of the year in the middle of nowhere.
- bombcar 4y ago
  The cost is to never have to think about it again. That can be worth more than the service itself.
- samstave 4y ago
  WElp, If anyone wants to join me, we could easily map out every single RV park in the US - and create an ISP where we install an uplink at every one and then feed all the RV locations in the US with wifi with starlink uplink accounts, and this list is just the camping/public ones... Most residential RV parks are being bought up by hedge funds. Go after a list of the hedgefunds and offer the service to them as an ammenity they can charge the park residents for... [0] https://www.campgroundviews.com/map-based-search/ https://www.campgroundviews.com/map-based-search/
- vanattab 4y ago
  I work remote and am planing to live full time in my van/rv for a year. I might have SOME 4g coverage in most places but it's definitely spotty and if I am remote desktop into a client's machine it need a stable connection.
walrus01 4y ago
The RV service ships immediately if you order it but is lower in traffic priority for speeds when you use it in a fully populated sold out cell.

nimos 4y ago

Seems like there is a lot of higher margin opportunity than residential available in business/gov. I see they have a business at 500/mo. Wonder what the breakdown is. Judging from their land coverage they are still a bit off doing container/oil/bulk/cruise/yatchs. With better coverage it seems like yachts/boating could run pretty high margin given the current options. It will be interesting to see the induced demand starlink has. With remote work it makes stuff like rural housing and long term cruising a viable living option for a lot more people. The way pricing is going on solar/batteries off grid is becoming pretty reasonable if you are willing to not mcmansion.

metadat 4y ago

What about the long term cost of all the space trash from starlink satellites and the stuff they run into, and the telescope light imaging they pollute and interfere with? Are these externalities priced in?

bryanlarsen 4y ago
Starlink is in a very low orbit. Any satellite that low deorbits quickly if not under active control. It's not a space junk concern. SpaceX would be the biggest loser if space junk ever became an issue.

dang 4y ago

For a submission like this, please submit the main URL (in this case I suppose that would be https://www.cnbc.com/2022/05/25/spacexs-starlink-surpasses-400000-subscribers-globally.html https://www.cnbc.com/2022/05/25/spacexs-starlink-surpasses-4...) and then add your take via a comment in the thread. That way your take is on a level playing field with everyone else's. This is in the FAQ (https://news.ycombinator.com/newsfaq.html https://news.ycombinator.com/newsfaq.html).