[Starlink] Starlink profit growing rapidly as it faces a moment of promise and peril (Ars Technica)

Thu Feb 6 03:47:26 EST 2025

Now the interesting thing here is that with 5 million subscribers paying 
about US$1200 a year, you'd get about 6 billion from bog standard dishy 
end users alone. So that $8.2b is credible.

Note this is revenue, not profit. To get there, pointing at the other 
posts today, Starlink had to build a constellation of about 7,000 
satellites. Even if we looked just at these 7,000 and assumed 
incorrectly that they all got to enjoy a full service life of maybe 5 
years, we'd be looking at 1,400 of them needing to get replaced each 
year going forward. Assuming here 1000 kg per satellite going forward 
(just ballpark) and US$1000/kg launch cost. So that's a US$1M 
replacement cost per satellite (not even looking at the hardware), and 
that's got to come out of those $8.2b. So I guess profit might be closer 
to the $6b mark at best in that scenario, and probably nowhere near that 
so far due to the fact that SpaceX are launching at well beyond 
replacement rate, the launch costs of anything older than Starship are 
higher, and the V3's will be closer to 2000 kg than 1000 kg. So that 
mightn't leave quite that much change out of the $8.2b to throw at other 
projects. But it's certainly looking like a sustainable business.

But then Starlink are growing. I guess with Elon now being in de-facto 
control of the FCC, they'll get what they want, but more sats up there 
also means having to replace more eventually. So that cost will go up.

It then depends on revenue growth, and that in turn depends on:

  * capacity available to sell and
  * markets to sell into.

And here lies the crux: Capacity comes in two types:

 1. Spectral capacity. That's SpaceX's ability to find a frequency to
    serve a customer on that isn't already in use in the customer's
    neighbourhood.
 2. Beam capacity: The ability to find a spare beam on a satellite that
    can be used for that customer.

Now the second one of these is easy to address - just launch more sats 
and put more beams on each sat. But the second capacity is worth nothing 
in a place where you don't have the first one, which can't be increased 
by launching more satellites - at least not unless they're different 
ones that allow for smaller cells and sharper beams. That's a route that 
Starlink are trying to go down FAIK, but there's limited growth 
potential here.

And looking at the Starlink availability map, spectral capacity is 
something they currently seem to be grappling with in quite a number of 
places. From the Greenwich Meridian roughly east, they're "sold out" in: 
the greater London area, Accra, Lagos, Benin City, Warri, Port Harcourt, 
Abuja, Lusaka, Bulawayo, Harare, Maputo, Nairobi, Antananarivo, Jakarta, 
Perth, Manila, Brisbane, Bethel, quite a lot of areas south of 
Anchorage, spots around Fairbanks, Delta Junction, Whitehorse, the 
Seattle-Portland corridor, Sacramento, Grande Prairie, Spokane, San 
Diego, Missoula, Edmonton, Apache Junction, Nogales, Aspen Park, 
Guadalajara (MX), Monterrey (MX), Mexico City, Austin, Puero Escondido 
(MX), De Ridder, Mérida (MX), San Salvador, Playa del Carmen (MX), 
Peterborough (CA), Tuskegee, San Jose (CR), Highlands (NC), much of 
western Jamaica, parts of the Dominican Republic, much of Puerto Rico, 
Iqualuit, Leticia (BR), Rincón de Los Sauces, Sao Gabriel da Caochoeira, 
Tefé (BR), Manaus (BR), Sao Paulo BR), Rio de Janeiro. It's been like 
this for a couple of months now, so I guess it's not a problem with the 
Dishy supply chain.

Read: Not much growth potential at present in and around population 
centres where Starlink used to be available and where there isn't good 
existing ground infrastructure.

There used to be a lot of availability "flickering" in areas where there 
was more demand than beam capacity - this has gone solidly to 
"available" now where it's not "sold out". So we can assume that the 
market there is saturated now mostly.

There remain those countries where Starlink isn't officially available 
yet. Some of these get roaming service, and I'm aware of at least one of 
these where spectral capacity is uncomfortably near (BTW: USAID was 
going to pay for a fibre cable there so China wouldn't, but I guess Elon 
doesn't want USAID to pay for the cable so China can own it. While 
they're waiting for it, Starlink gets seen there as being unable to meet 
demand. It makes no sense to me. Incidentally, the country has one of 
the largest sovereign waters in the world and China is just waiting for 
the opportunity to get a naval base there I guess - on the far side of 
Guam. Bye America!).

Other countries where you can't get Starlink yet might contribute 
another few million users - India in particular. But with Starlink not 
being able to support particularly high user densities anywhere because 
of the spectral constraints, we're unlikely to see billions of customers 
there either.

On 6/02/2025 4:53 am, the keyboard of geoff goodfellow via Starlink wrote:
> "He wants to take food off the table of people—hard-working people."
> EXCERPT:
>
>     Two new independent estimates of revenue from SpaceX's Starlink
>     Internet service suggest it is rapidly growing, having nearly
>     tripled in just two years.
>
>     An updated projection from the analysts at Quilty Space estimates
>     that the service produced $7.8 billion in revenue in 2024, with
>     about 60 percent of that coming from consumers who subscribe to
>     the service. Similarly, the media publication Payload estimated
>     that Starlink generated $8.2 billion in revenue last year.
>
>     These estimates indicate that Starlink produced a few hundred
>     million dollars in free cash flow for SpaceX in 2024. However,
>     with revenues expected to leap in 2025 to above $12 billion,
>     Quilty Space estimates that free cash flow will grow to about $2
>     billion. SpaceX is privately held, so its financial numbers are
>     not public.
>
>     *Growing subscribers*
>     *
>     *By launching thousands of satellites and developing an Internet
>     service based in low-Earth orbit—where the proximity of satellites
>     to the ground provides significantly faster and lower latency
>     service than satellites in geostationary space—SpaceX has already
>     exceeded space-based communication networks developed earlier.
>
>     At the end of last year, Starlink had 4.6 million subscribers.
>     Quilty's director of research Caleb Henry noted that the previous
>     incumbent players, Hughes and ViaSat, had a combined 2.2 million
>     subscribers at their peak about half a decade ago, largely in
>     North America, with some in South America and a smattering in
>     Europe. Starlink is expected to add another 3 million subscribers
>     this year alone.
>
>     SpaceX has other significant lines of business, including
>     government customers, particularly the US Department of Defense,
>     as well as maritime (75,000 vessels equipped with Starlink as well
>     as 300 cruise ships) and aviation segments.
>
>     "The key takeaway I want everybody to walk away with is, if SpaceX
>     was building the Starlink system to pay for a Mars colony, we've
>     got evidence that the company will generate the type of free cash
>     flows from the business that could pay for said endeavor," said
>     Chris Quilty, co-chief executive and president of Quilty Space...
>
> [...]
> https://arstechnica.com/space/2025/02/starlink-profit-growing-rapidly-as-it-faces-a-moment-of-promise-and-peril/
>
>
> -- 
> Geoff.Goodfellow at iconia.com
> living as The Truth is True
>
>
> _______________________________________________
> Starlink mailing list
> Starlink at lists.bufferbloat.net
> https://lists.bufferbloat.net/listinfo/starlink

-- 
****************************************************************
Dr. Ulrich Speidel

School of Computer Science

Room 303S.594 (City Campus)

The University of Auckland
u.speidel at auckland.ac.nz 
http://www.cs.auckland.ac.nz/~ulrich/
****************************************************************

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <https://lists.bufferbloat.net/pipermail/starlink/attachments/20250206/255b4a96/attachment-0001.html>