5 ms·

But what's the size of the market? TAM may be huge, but what's a realistic SOM? In other words, how many people with hard wired fiber/coax will change to Starl

by yumraj 4y ago

But what's the size of the market? TAM may be huge, but what's a realistic SOM? In other words, how many people with hard wired fiber/coax will change to Starlink or will be be useful only for the rural/remote segment. Yes, there's some international, marine, flight etc. market, but, again, how big is that. Serious question - is there any real data?

dboreham 4y ago
Starlink will never be competitive with wired connectivity. Source: Claude Shannon.
- yumraj 4y ago
  Exactly my point. So, it will always be limited in market size and hence it may be a gamechanger for a subset of the use-cases, such as the ones I mentioned, but not from an financial standpoint.
- Dylan16807 4y ago
  Don't go too far with that. Fiber beats starlink by orders of magnitude. With coax it depends on how it's set up. Plenty of existing lines have worse upload speed than starlink because of frequency allocations that are expensive to change. Phone wires are very bad at carrying data and are usually much slower than starlink.
kjksf 4y ago
"42 million Americans don't have high-speed internet" That's just in U.S. Starlink is world-wide. Back of envelope calcs: $100/month == $1k a year. 1 million * $1k = $1 billion 10 million = $10 billion. Estimated cost to replace all Starlink satellites every 5 years: $10 billion. That's $2 billion a year. Cost: $2 billion/year. Revenue: $10 billion/year. Profit: $8 billion/year. Assuming only 25% of Americans currently without high-speed internet will opt for Starlink, not counting world-wide users, not counting commercial applications (boats, planes, gas stations), not counting using Starlink as internet backbone (i.e. alternative to under sea fiber). Most likely Starlink will be a cash cow (and finance Mars colonization). https://www.npr.org/2022/05/11/1098368187/42-million-americans-dont-have-high-speed-internet-local-providers-may-be-the-ke https://www.npr.org/2022/05/11/1098368187/42-million-america...
- yumraj 4y ago
  Quick comments: 42M Americans = ~10M households (assuming 4 per household). Starlink is $110/month and upfront $599, which puts it outside many/most of these remote folks. 10M household is the TAM, so SOM would be just 5-10% of that, about 500K-1M households, or even less. Regarding the cost of replacement of satellites and their operational costs, I have no clue.
  - deleted 4y ago
    [deleted]
  - Dylan16807 4y ago
    2.5 people per household. So 7.5% of 42 million people would be 1.3M households. The current price is $1.3k a year, so that's $1.7B of service revenue just from the US. And there are more households that are interested even if they have "high speed" service already. So even with those numbers it looks pretty good.

by yumraj 4y ago

dboreham 4y ago

Starlink will never be competitive with wired connectivity. Source: Claude Shannon.

yumraj 4y ago
Exactly my point. So, it will always be limited in market size and hence it may be a gamechanger for a subset of the use-cases, such as the ones I mentioned, but not from an financial standpoint.
Dylan16807 4y ago
Don't go too far with that. Fiber beats starlink by orders of magnitude. With coax it depends on how it's set up. Plenty of existing lines have worse upload speed than starlink because of frequency allocations that are expensive to change. Phone wires are very bad at carrying data and are usually much slower than starlink.

kjksf 4y ago

"42 million Americans don't have high-speed internet" That's just in U.S. Starlink is world-wide. Back of envelope calcs: $100/month == $1k a year. 1 million * $1k = $1 billion 10 million = $10 billion. Estimated cost to replace all Starlink satellites every 5 years: $10 billion. That's $2 billion a year. Cost: $2 billion/year. Revenue: $10 billion/year. Profit: $8 billion/year. Assuming only 25% of Americans currently without high-speed internet will opt for Starlink, not counting world-wide users, not counting commercial applications (boats, planes, gas stations), not counting using Starlink as internet backbone (i.e. alternative to under sea fiber). Most likely Starlink will be a cash cow (and finance Mars colonization). https://www.npr.org/2022/05/11/1098368187/42-million-americans-dont-have-high-speed-internet-local-providers-may-be-the-ke https://www.npr.org/2022/05/11/1098368187/42-million-america...

yumraj 4y ago
Quick comments: 42M Americans = ~10M households (assuming 4 per household). Starlink is $110/month and upfront $599, which puts it outside many/most of these remote folks. 10M household is the TAM, so SOM would be just 5-10% of that, about 500K-1M households, or even less. Regarding the cost of replacement of satellites and their operational costs, I have no clue.
- deleted 4y ago
  [deleted]
- Dylan16807 4y ago
  2.5 people per household. So 7.5% of 42 million people would be 1.3M households. The current price is $1.3k a year, so that's $1.7B of service revenue just from the US. And there are more households that are interested even if they have "high speed" service already. So even with those numbers it looks pretty good.