Internet by satellite: SpaceX’s Starlink gains 750,000 subscribers in nine months

SpaceX said its Starlink satellite Internet service surpassed one million active subscribers just two years after its first limited beta.

SpaceX began launching the Starlink satellite in November 2019. Just over three years later, the company has successfully launched more than 3,600 Starlink satellites, of which nearly 3,000 are operational and ready to serve customers. This network expansion—unprecedented in the history of spaceflight and creating a satellite on a scale beyond the next—also allowed SpaceX to dramatically increase the number of active users it could serve.

In June 2022, CEO Elon Musk reported at a town hall meeting that SpaceX had “about” 500,000 users of Starlink Internet. Just six months later, SpaceX said the number had doubled to “more than 1,000,000 active subscribers,” indicating an average of about 2,600 new subscribers per day in the second half of 2022. In the relatively small world of satellite broadband Internet service, one million subscribers puts SpaceX directly comparable to companies that have been providing Internet service via satellite for decades, just two years after its first offering entered beta.

In the US, Hughes Networks is SpaceX’s biggest competitor and currently has just under 1.3 million subscribers in America. Data from CloudFlare shows that only half of Starlink’s much larger international customer base is located in the US, indicating that SpaceX has gained about 40% more customers after serving its competitor for just two years. That growth — about 250,000 new subscribers per quarter through March 2022 — is in stark contrast to what virtually every other satellite Internet provider has seen in recent years, most of which have been steadily losing customers rather than gaining.

CEO Elon Musk’s comments and SpaceX’s actions indicate that the company will significantly reduce this growth anytime soon. In 2021, Musk noted that SpaceX would only really combat congestion if Starlink had “a few million” subscribers. In late 2020, SpaceX sought FCC clearance to operate five million user terminals (dishes connecting to Starlink) in the United States alone.

Starlink’s design makes it almost impossible to prioritize a country or region. Instead of the large geostationary satellites most competitors operate several thousand miles above Earth’s surface, where they more or less hover over a region of choice, Starlink satellites operate at just 550 kilometers (~340 miles). At this altitude, each satellite orbits the Earth every 95 minutes and spends only a few minutes (or even seconds) above a particular country. This strongly encourages SpaceX to serve customers in as many countries as possible, each with their own painful market entry process for a new communications provider.

After years of work, SpaceX’s government relations team has received approval to operate Starlink in nearly a quarter of the world’s countries. Together, these countries represent more than 1.5 billion people, or 19% of the world’s population.

But for SpaceX to be a worthwhile and financially sustainable pursuit, Starlink will probably only need to convert a tiny fraction of those people into customers. The total capacity of the first Starlink constellation of 4,405 satellites can only be estimated, but a rough estimate of SpaceX’s total Starlink revenue is much easier. The cost of a subscription varies widely by country, but Cloudflare says most customers live in countries where it costs about $100-110 per month, and about $600 for subsidized food. Even taking into account that SpaceX foots a portion of Ukraine’s Starlink service bill, the network almost certainly generates more than $1 billion a year.

While the FCC is making things a lot easier, SpaceX is already preparing to begin building a second-generation Starlink Gen2 constellation with about 30,000 satellites, each of which can be launched with nearly as much usable bandwidth as the Gen satellites. 1. If SpaceX can continue to find new customers around the world, 1 million customers using Starlink Gen1 while the network is less than 70% complete implies that the highest performance version of Starlink Gen2 can serve at least 10 to 12 million customers. Assuming SpaceX doesn’t significantly reduce revenue, recurring revenue for 12 million Gen2 customers could be $14.5 billion per year.

Getting Starlink to profitability will be an even bigger challenge — and one that CEO Elon Musk has hinted (perhaps overzealously) could bankrupt SpaceX if the company tries to do so with its Gen1 design. But securing one million active subscribers in two years and nearly 750,000 in the past nine months arguably indicates that SpaceX is on the right track and should allow the company to either reduce its fundraising burden or increase its fundraising burden. Future research and development opportunities should increase and expansion costs.

Source: https://www.teslarati.com/spacex-starlink-750000-new-subscribers-9-months/

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