Elon Musk’s Starlink Is Already Theoretically a $600 Million Business
As we approach the second anniversary of SpaceX launching the first batch of Starlink satellites that beam internet back down to Earth, Elon Musk’s rocket company has already built a business with the potential to generate nearly $600 million in annual revenue.
SpaceX sent another 60 satellites into orbit earlier this week, on Star Wars Day (May the 4th) no less, and disclosed a new milestone during the webcast.
SpaceX operations engineer Siva Bharadvaj commented that over 500,000 people have either ordered or placed a deposit for Starlink to date through SpaceX’s beta program. At $99 per month, that translates into $594 million in potential annual revenue.
To be clear, Starlink is not currently generating $600 million in annual revenue, but the number of orders and deposits does suggest there is already enough early demand to support that level of sales from providing internet service from space.
Additionally, there is another $499 price tag associated with buying the initial hardware that a customer needs to install at their home or service location, although SpaceX Chief Operating Officer Gwynne Shotwell has already confirmed that the company sells the equipment at a loss with the goal of offsetting the loss with future subscription revenue.
Furthermore, it’s unclear precisely how many orders SpaceX has actually delivered on so far, as deposits are fully refundable. The last official tally from February was 10,000 active users, which may have grown in recent months. Musk is optimistic that the company can execute, while acknowledging that one of the current challenges is providing service to areas with high population density.
“Only limitation is high density of users in urban areas,” the eccentric billionaire wrote on Twitter. “Most likely, all of the initial 500k will receive service. More of a challenge when we get into the several million user range.”
Beyond urban markets, Starlink service is especially appealing to users in rural areas that have long been underserved or neglected by major telecommunications providers due to the prohibitively high fixed costs associated with deploying high-speed broadband service to remote regions using traditional technologies like fiber.
SpaceX has now deployed approximately 1,500 Starlink satellites overall, making it the largest satellite constellation.
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