Why is Starlink so big?(fool.com) |
Why is Starlink so big?(fool.com) |
It seems like starlink got the jump on infrastructure build out via subsidized government contracts. But a fair amount of telecom companies could slowly expand their reach at a less breakneck pace much cheaper until they catch up and the remaining market cap that starlink doesn't have to fight for would probably be smaller than maybe the cost of a handful of launches per year. It's hard to upkeep a global network with 5 satellites.
The only reason I could see starlink staying up is because it's currently a way for the US government to have a company that provides global internet that they can potentially wrap into PRISM surveillance. The US has spent more on less. But as far as an actual company? I wonder how much longer it will be competetive.
SpaceX cost per launch might be around $100m. Some napkin math if a telecom charges around $50/mo/household. That's $600/y/household. That's roughly 166,667 households/y/launch. You can always tweak the numbers but $50 is competitive.
They're losing about 250-450 satellites per 6 months to a year, which means they might need to launch on average 350 satellites per year lets say?
https://www.pcmag.com/news/spacex-sees-big-drop-in-number-of...
So that's around 58,333,334 households per year in maintenance.
According to this article they just hit 12m subcribers in 2026 June via SEC filing, and their network is 10k+ satellites.
https://axis-intelligence.com/starlink-statistics/
This is all just launch cost, which I guess is subsidized by creative accounting via spacex.
When people say house of cards, like imagine telling Verizon to drop $1T over 10-20 years to net 12M subscribers.
Elon usually has some crazy long game like going to Mars to die. There just isn't one on starlink? Sure you could say, everyone in the world will now use Starlink for everything telecom and broadband related, but it's a gigantic security issue that almost no government would sign on to. You'd have to convince a ton of governments to stop building out local infrastructure and pay Elon to keep everything running. It's a crazy proposition, and not the fun kind.
The thing with satellites is you can't really maintain them, at least not with current technology. It's more common practice to let them burn out and then launch a new one. It's also hard to repurpose them for other things because they're launched with specific hardware. You can add new software via a remote connection but it would be so impossible to just convert the current 10k+ satellite infrastructure into something else.
What would make more sense honestly would be to coordinate with governments to piggyback starlink modules onto their standard satellites and share the launch and maintenance, but that is a bureaucratic nightmare that's worse than how telecom companies rent out different sections of the same telephone pole.
I just don't see it. As a ponzi scheme that temporarily benefits a lot of people, sure. But as a long term functional business that runs without a constant subsidy? No way. The company value is probably less tied to the product and revenue and more to the level of subsidy it receives each year.
Am I crazy?
Unlike Amazon's constellation, which can be cross subsidized and monetized in multiple ways. Starlink economics have to work as a largely pure play.
Where I disagree:
> You should be able to do the same thing by pointing dishes at each other long distance and having local nodes broadcast 5g. It would be a hell of a lot cheaper than rocket launches and most telecom companies already do it.
Radio is "line-of-site" at these wavelengths, it doesn't diffract much around the environment. Being 500 km up gives you a clear path to a big patch of ground (and sea), which is why they only needed to get to around 10k units for worldwide coverage.
For scale, Czechia has about 700 microwave links; if this scales up proportionately then just the EU is by itself probably has several times as many links in total as number of birds in the entire Starlink constellation: https://www.racom.eu/eng/case/cetin-leverages-ray-technology
* though that's a good reason all by itself; shame he's not practicing what he preaches about free speech absolutism.
I'm wondering more about unit economics. 10k units for global coverage with ongoing maintenance cost. Or earth bound construction that costs significantly less than a rocket launch.
You could realistically prefab and ship microwave links or base stations. It would be extremely cheap compared to space.
What I'm thinking though is that there's no real estate in space. So you don't have to do any surveying, leasing, etc. You just launch a rocket. Which means if you fund anything in space, you can grow it to scale as long as you have the capital.