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

[Ulrich Speidel <u.speidel@auckland.ac.nz>]

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On 7/02/2025 4:29 am, Dave Taht wrote:
> On Thu, Feb 6, 2025 at 12:47 AM Ulrich Speidel via Starlink
> <starlink@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.
Indeed. As I've mentioned, the main reason why satellites get de-orbited 
is technological obsolescence (few beams, no ISLs, low EIRP, ...).
>
>> 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.
Yep. So this means that a bigger chunk of the current revenue goes 
towards growth rather than a somewhat unrelated Mars programme, I guess.
>
> 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...
Yep, I left that out deliberately.
>
>> 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.
I left that out, too.

> What happens next at the NTIA is anyone´s guess.
Indeed.
>> 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.
Indeed they do. Now India have been quite innovative in their urban 
areas in terms of connectivity, but quite whether the rural areas will 
be able to afford a great amount of Starlink subscriptions is the big 
question. Concentrated populations aren't as much of a customer 
potential - either there's already better local connectivity available, 
or you hit spectral capacity quickly.
> 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.
I think you'll see a lot of people thinking about a Plan B at the 
moment. That's what you do when your former best friend suddenly becomes 
the source of a lot of problems.
>
> 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.
Now there's "rich rural" and "poor rural". Much of "rich rural" around 
the world already has Starlink, and "poor rural" won't be able to afford 
Starlink unless it's heavily discounted. So perhaps not such a great 
source of cashflow either.
> That´s a really great list. However, in terms of square footage quite small.
That's the whole point: These are where you have concentrated 
underserved populations, but Starlink can't serve them. That leaves only 
the rural underserved - and quite how many there are that can actually 
contribute significantly to Starlink cashflow is what I'm asking myself.
> 30m is more than enough for a highly profitable entity.

Yep, I mean they'd be profitable now if they ceased growing right away 
and just maintained status quo. But will 30m users generate enough cash 
flow to go to Mars?

-- 
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Dr. Ulrich Speidel

School of Computer Science

Room 303S.594 (City Campus)

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