Re: [Starlink] SpaceX ordered to explain pricing strategy

[Daniel AJ Sokolov <daniel@falco.ca>]

Erroneously sent to David only. Now to the list;

On 2022-04-08 at 14:45, David Lang wrote:
> 
> your claim that launching additional satellites will not increase 
> bandwith is directly coutnered by Starlink's desire to launch
> additional satellites.

I never claimed such a thing.

Please read again what I wrote: "And the additional bandwidth per 
satellite added diminishes as the network grows. You can't double the 
bandwidth by doubling the satellites, because the available spectrum and 
the spectral efficiency are given."

Of course adding additional satellites adds bandwidth - but the more 
satellites you already have, the less each additional group of 
satellites adds. Diminishing returns for additional satellites are not 
zero return.

There are additional ways to increase bandwidth: Use more spectrum 
and/or increase the spectral efficiency. Nobody knows if or when either 
can happen, and what tech changes that would require on satellites and 
ground equipment, so we can't build projections on that.


> I don't see premium chaning things much, it's 5x the price, but also
> 5x the bandwidth, just in one easy-to-use dish vs configuring load 
> balancing across 5 dishes. So it looks like a wash to me.

It is not 5x the bandwidth. Starlink promises 100 to 200 MBit/s for 
consumers, and 150 to 500 MBit/s for Premium. Taking the midpoints, 
Premium is 2.17x the bandwidth.

In any case, even 5x the bandwidth would not equal 5x the load on the 
network. So Premium access brings in more $ per kbit than consumer accounts.

Premium clients will get 24/7 tech support (which should not stress the 
network much, but will add OPEX).

> 0.1 clients by sq km seems like an incredibly low density.

It is. Note that this number refers to the area covered by a satellite 
(101,000 square km), not to landmass. Depending on how much of those 
101,000 square km are water, you can adjust the number for density over 
landmass.

>I haven't
> seen that paper, so I can't argue with it's assumptions directly.

https://ieeexplore.ieee.org/document/9568932

> I've seen people talking about revenue on the order of $30B/year as a
> possibility, and while I think they are probably optimistic, $10B/year
> on $30B in additional investment is a fairly short payback period.

I think that $10 billion revenue/year is possible - if they get to 8 
million consumer accounts or 1.75 million premium accounts, or a mix 
thereof, without degrading the user experience too much, and before 
running out of money.

With an IPO, SpaceX can maybe raise $20 billion net to achieve low 
capital costs. (That would be one of the top 4 largest IPOs in history, 
and Mr. Musk's shareholdings would be diluted accordingly.)

If SpaceX can achieve a sufficient manufacturing rate of Raptor engines, 
can get to a reliable Starship quickly, and can find a launch facility 
that allows for at least biweekly launches, I think they can make 
Starlink work out.

These are significant vagaries.

However, an ARPU of $99 was unsustainable. I thought so, and Starlink 
thought so. They introduced Premium, and raised the consumer rates. I 
don't think this was the last rate increase.

BR
Daniel AJ