Starlink To Cost $30 Billion Long Term, Dish Price Might Drop To $250 Outlines Musk

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Space Exploration Technologies Corp.'s (SpaceX) chief executive officer, Mr. Elon Musk, has shared important details about his satellite-based internet service, Starlink. The executive's comments came during this year's Mobile World Congress, during which he elaborated on Starlink's performance goals, how it compares to ground-based internet and other satellite services and the investment it requires right now and in the future.

Starlink Latency Will Be Comparable To Ground-Based 5G Internet Outlines Musk

During his talk, Musk highlighted the investment needed to make sure that his company can establish an extensive service infrastructure of satellites and ground stations and provide users with the dishes. According to him, an investment of at least $5 billion is required to make sure that the service is up and running.

Starlink User Dish Uses Processor Cores Often Found In Entry Level Smartphones

His statements for the investment were as follows:

Well, I think it depends on how you count investments. One way to count investment is to what is the total amount of money invested before Starlink becomes positive cash flow, and how much in that you include Falcon 9 and everything done there. You know I think probably before we go to fully positive cash flow it might be, it'll be at least $5 billion and maybe as much as ten. That's quite a lot. And, then you see how much you invest after it goes positive cash flow, I think we have to keep investing a great deal after that point in order to not being made irrelevant by continued improvements in cellular and continued expansion for cellular. Or lower-cost geosynchronous satellites. You know geosynchronous satellites can serve large swathe of territory but the total [inaudible] they conserve is not great and the latency is high. So we need to be able to offer our service at a comparable or ideally lower rate than GTO satellite connectivity. So, it's just basically total investment probably is like at least five, maybe $10 billion and then over time it's gonna be a multiple of that and go to $20 to $30 billion over time. It's a lot basically.

 

SpaceX's Starlink Earth Station in Merrillan, Wisconsin. The company filed for the station's license in September 2019 and the FCC granted its approval in April 2020. Image: darkpenguin22/Reddit

He also confirmed that Starlink's latency would be similar to that provided by 5G and ground-based services over time. Musk outlined innovations for Starlink's user terminals and satellites and stated that Starlink is a complement to traditional internet services, and it can even provide telecommunications providers with backhaul capability. Latency and backhaul refer to the time it takes for an information packet to travel from a user to an internet server and back, and data transfer to internet backend servers, respectively.

According to Musk:

There's a need for connectivity in places that don't have it right now or where connectivity is very limited or very expensive. So you think of Starlink as filling in the gaps between 5G and fiber. And really getting to the parts of the world that are the hardest to reach. The most difficult to reach, 3%, possibly 5%. And I think it really quite nicely complements fiber and 5G.

A Starlink user terminal in the snow. Image: Steve Golson/YouTube

Telecommunications Carriers Interested In Starlink, SpaceX Is Working On New Dishes Outlines Musk

He further elaborated on Starlink's progress by sharing that:

So, we've launched and now have active over 1,500 satellites. Let's see, I mean there are a few interesting stats, but the combined power of all satellites is over five megawatts. So there's over five megawatts of solar for all satellites combined. It's capable of outputting over 30 terabits per second of data, and starting in actually next month, almost next month I should say, starting August we should have global connectivity for everywhere except the poles. It's really meant for sparsely populated regions. So our spot size talking in terms of cellular is quite big. So we're well suited to low or medium density areas but not to high-density areas. In the high-density areas we will serve a very limited number of customers.

It is operational, we recently passed the notable number of 69,420 active users and we are on our way to having a few hundred thousand users, possibly over five hundred thousand users within twelve months. So, it's growing rapidly and we're continuing to innovate the user terminals, and the satellites, and the ground stations, and the gateways and points of presence. I think we're operational now in about twelve countries and more being added every month. So it's a nice complement to fiber and to 5G, and it's also, although we can't talk about those deals today our partners aren't ready to announce them it can to be quite useful to telcos for data backhaul. So you'll have cellular stations in remote regions using Starlink for data backhaul to their network. It can be a very cost-effective way of doing data backhaul.

And then, notably, for Starlink, relative to say other satellite communications systems, we're at around 500 kilometers whereas the geosynchronous satellites ate at 36,000 kilometers. So latency for a Starlink system is similar to latency for ground-based fiber and 5G. So we're expecting to get latency down under 20 milliseconds so you can still do, it feels very fast like there's no lag. So you can play for example competitive video games on a Starlink system.

Musk also confirmed that a user terminal costs SpaceX more than $1,000, with taxes and import duties affecting prices internationally and that Starlink is working on next-generation terminals that provide the same capability with lower costs. Over the long term, he remained optimistic about reducing the dish's cost from $500 to $250.

The author has no position in any of the stocks mentioned. WCCF TECH INC has a disclosure and ethics policy.
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