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

[Dave Taht]

On Thu, Feb 6, 2025 at 12:47 AM Ulrich Speidel via Starlink
<starlink at lists.bufferbloat.net> wrote:
>
> 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,

As best as I remember from something a few years ago, the fuel
usage was far, far below expectations, something like 3% over 3 years.
So aside from the lowest orbits perhaps, starlink does not need to retire
a satellite in under 5 years, except for upgrades.

> we'd be looking at 1,400 of them needing to get replaced each year going forward.

They are presently launching 22 sats every other day. call it 4000/yr.

So assuming the same launch cadence, call it 21k sats in orbit before
they can grow no more.

>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.

This seems to assume each launch is 22m. I have no idea what the
second stage costs at this point...

>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.

Actually connecting to the internet costs money too, and each ground
station is probably 1m+, and there are all sorts of other costs in
manufacturing and network support.

Still it certainly looks 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.

The FCC has lost authority to regulate the internet via title II,
which is good because they had no staff for it. Historically Brendan
Carr (and Nathan Simington and Ajit Pai) have been quite friendly to
all forms of wireless, be it 5g, or wisps, or sat. So while I expect a
friendly spectrum regime, not much on the internet front.

What happens next at the NTIA is anyone´s guess.
>
> It then depends on revenue growth, and that in turn depends on:
>
> capacity available to sell and
> markets to sell into.

Some very large countries like India, are dragging their feet. I do
wonder what will happen in onterio, where they just uncanceled a
100m starlink contract (
https://www.reuters.com/business/media-telecom/ontario-cancels-starlink-contract-latest-canadian-tariffs-protest-2025-02-03/)

and are trying to put 2.5B into another sat system. Once the furor
dies down over there, I have no idea what will happen.

In general I expect most future growth for starlink to be in rural
throughout the world, and their initial estimates were for 30m users
worldwide, which I think is quite achievable in 5-7 years.

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

That´s a really great list. However, in terms of square footage quite small.

> 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

Where?

>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!).

In general assuming elon cares about things at this level of grand
strategy is probably a decent assumption and I kind of expect that
once the slash and burn approach to things like USAID is exhausted
that worthy projects will actually proceed faster.

But anyway, you got a link to this project?

>
> 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.

30m is more than enough for a highly profitable entity.

> 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
>
>
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> 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/
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-- 
Dave Täht CSO, LibreQos