4 ms·

Did any EU regulation or competiton get announced recently? Because it seems limited to that region, ironically.

by thinkingkong 4y ago

happyopossum 4y ago
Commenters here from Brazil and Mexico would be surprised to hear of their recent additions the EU.
gambiting 4y ago
People in this thread are reporting the same in Mexico and Brazil, so I don't think you're right.
mrtksn 4y ago
Probably that's not the case, it looks like they introduced localised pricing similar to the one in the App Store(or Netflix, Amazon Prime etc.). If you think about it, their costs are fixed and they should optimize for revenue and the sweet spot for the num subscribers and price is different at every market.
- JumpCrisscross 4y ago
  > their costs are fixed Their costs are in dollars. Ceteris paribus, this is coming out of Starlink's margin. (They may also be anticipating a compensating bump in volumes. Or they found some cost savings.)
  - mrtksn 4y ago
    It doesn't matter in what currency their costs are, there is a curve of num_subscribers v.s. payment_per_subscriber and they need to be at the curve's maxima and that maxima would be different for each market depending on the purchasing power of the customers. I.e. you are better off if you to have 150 customers who pay 75GBP instead of having 100 who pay 89GBP. You already sent the satellites and you already employ the people who upkeep the infrastructure, so it doesn't matter what currency you use, you always want to have the greatest revenue.
    - JumpCrisscross 4y ago
      > doesn't matter in what currency their costs are, there is a curve of num_subscribers v.s. payment_per_subscriber and they need to be at the curve's maxima and that maxima would be different for each market depending on the purchasing power of the customers You're describing a monopolist pricing model's revenue curve [1]. Let's complete the model. On the same graph imagine the marginal cost of providing the service (e.g. billing, customer support, peak bandwidth rationing et cetera). Subtract it from the revenue curve. You now have a profit curve. For SpaceX, if we dollar denominate then a rising dollar means the revenue curve moves down; if we local-currency denominate, a rising dollar means the cost curve moves up. Either way, symmetry. (Note: this works even if you assume zero cost elasticity, i.e. a horizontal cost curve.) Thus, whether SpaceX is buying growth by losing money, hopefully in the short term; buying growth by making less money; or, as you suggest, increasing the quantity demanded on a unit-economically positive game is dependent on the exchange rate. > already sent the satellites and you already employ the people who upkeep the infrastructure These systems have marginal costs. Also, last I checked, Starlink has a pre-order backlog. (My guess: churn is expensive for Starlink. Moreso than most telecoms. Buying goodwill and loyalty amidst rising costs of living is a smart move, despite it likely eating into margin. That or they're about to announce a massive deployment ramp-up.) [1] https://blog.cambridgecoaching.com/how-to-determine-the-optimal-price-of-a-product-as-a-monopolist https://blog.cambridgecoaching.com/how-to-determine-the-opti...
      - mrtksn 4y ago
        Sure the strength of the USD is a factor that moves the local price when you bill in dollars but I believe Starlink has a "tech company" financials, by that I mean the cost of servicing the costumer is minimal and most of the money spent is on building the product. Why? Because these are low touch businesses, they don't need to scale their workforce linearly with the demand. It's bit like selling software, you spend money developing it then you spend very little on delivery and support. AFAIK Starlink's bandwidth bottleneck is on customer per area given, which means they are saturated in some hotsopts like SV or maybe London but not saturated in less dense areas. Besides, they are building infrastructure all the time and even if there's a backlog today they might have seen some softness in the demand that can lead to losing out on competitors down the road. It's very unlikely that the price change is altruistic.
  - iam-TJ 4y ago
    Are all Starlink costs in dollars? Capital maybe, but operating costs? In each legal domain (country ~ territory) Starlink operates in it has to install and operate one or more ground stations and back-haul into exchanges. I realise there is a deal with Google for some of that - most likely it varies with the country, data-center locations, and exchange facilities. But there are presumably ongoing costs to employ and support engineers to watch over the ground station physical assets and ensure back-up systems are always available?

Did any EU regulation or competiton get announced recently? Because it seems limited to that region, ironically.

happyopossum 4y ago

Commenters here from Brazil and Mexico would be surprised to hear of their recent additions the EU.

gambiting 4y ago

People in this thread are reporting the same in Mexico and Brazil, so I don't think you're right.

mrtksn 4y ago

Probably that's not the case, it looks like they introduced localised pricing similar to the one in the App Store(or Netflix, Amazon Prime etc.). If you think about it, their costs are fixed and they should optimize for revenue and the sweet spot for the num subscribers and price is different at every market.

JumpCrisscross 4y ago
> their costs are fixed Their costs are in dollars. Ceteris paribus, this is coming out of Starlink's margin. (They may also be anticipating a compensating bump in volumes. Or they found some cost savings.)
- mrtksn 4y ago
  It doesn't matter in what currency their costs are, there is a curve of num_subscribers v.s. payment_per_subscriber and they need to be at the curve's maxima and that maxima would be different for each market depending on the purchasing power of the customers. I.e. you are better off if you to have 150 customers who pay 75GBP instead of having 100 who pay 89GBP. You already sent the satellites and you already employ the people who upkeep the infrastructure, so it doesn't matter what currency you use, you always want to have the greatest revenue.
  - JumpCrisscross 4y ago
    > doesn't matter in what currency their costs are, there is a curve of num_subscribers v.s. payment_per_subscriber and they need to be at the curve's maxima and that maxima would be different for each market depending on the purchasing power of the customers You're describing a monopolist pricing model's revenue curve [1]. Let's complete the model. On the same graph imagine the marginal cost of providing the service (e.g. billing, customer support, peak bandwidth rationing et cetera). Subtract it from the revenue curve. You now have a profit curve. For SpaceX, if we dollar denominate then a rising dollar means the revenue curve moves down; if we local-currency denominate, a rising dollar means the cost curve moves up. Either way, symmetry. (Note: this works even if you assume zero cost elasticity, i.e. a horizontal cost curve.) Thus, whether SpaceX is buying growth by losing money, hopefully in the short term; buying growth by making less money; or, as you suggest, increasing the quantity demanded on a unit-economically positive game is dependent on the exchange rate. > already sent the satellites and you already employ the people who upkeep the infrastructure These systems have marginal costs. Also, last I checked, Starlink has a pre-order backlog. (My guess: churn is expensive for Starlink. Moreso than most telecoms. Buying goodwill and loyalty amidst rising costs of living is a smart move, despite it likely eating into margin. That or they're about to announce a massive deployment ramp-up.) [1] https://blog.cambridgecoaching.com/how-to-determine-the-optimal-price-of-a-product-as-a-monopolist https://blog.cambridgecoaching.com/how-to-determine-the-opti...
    - mrtksn 4y ago
      Sure the strength of the USD is a factor that moves the local price when you bill in dollars but I believe Starlink has a "tech company" financials, by that I mean the cost of servicing the costumer is minimal and most of the money spent is on building the product. Why? Because these are low touch businesses, they don't need to scale their workforce linearly with the demand. It's bit like selling software, you spend money developing it then you spend very little on delivery and support. AFAIK Starlink's bandwidth bottleneck is on customer per area given, which means they are saturated in some hotsopts like SV or maybe London but not saturated in less dense areas. Besides, they are building infrastructure all the time and even if there's a backlog today they might have seen some softness in the demand that can lead to losing out on competitors down the road. It's very unlikely that the price change is altruistic.
- iam-TJ 4y ago
  Are all Starlink costs in dollars? Capital maybe, but operating costs? In each legal domain (country ~ territory) Starlink operates in it has to install and operate one or more ground stations and back-haul into exchanges. I realise there is a deal with Google for some of that - most likely it varies with the country, data-center locations, and exchange facilities. But there are presumably ongoing costs to employ and support engineers to watch over the ground station physical assets and ensure back-up systems are always available?