Starlink is a satellite Internet service that is claimed to make high-speed Internet available all over the world for a cheap price, in addition to delivering Internet service to even the most distant regions. The primary goal of Starlink is, of course, to help fund Mars, but given the large initial investment required by SpaceX to even make Starlink conceivable. How long will it take Starlink to turn a profit, and how much money will it create for Mars? Let’s look at how much it will cost SpaceX to get Starling up and running in the first place.
Cost of Launch
The cost of launching Starlink. The fact that space experts can launch the Starlink satellite themselves is a significant benefit. They no longer need to rely on a third-party launch provider to get their satellites into orbit, which saves them tens of millions of dollars per launch. Elon Musk previously stated that launching a Falcon Nine with a reused rocket costs $15 million. SpaceX, on the other hand, charges commercial clients around $50 million for a Falcon 9 launch with a reusable rocket.
As a result of being able to conduct their own launches, cars under launch cost several times as much. I believe SpaceX has twice used reused launchers to launch Starlink satellites, but issues do arise from time to time. For example, just a few weeks ago, a Falcon 9 booster crashed into the water while attempting to land on the drone ship. So, when calculating the Falcon 9 launch costs, we must account for faults and unexpected complications that arise from time to time. To accommodate for this, one in every five Starlink launches will cost as much as launching a brand new Falcon 9, which costs $50 million. They should account for the cost of scrubs, unforeseen repairs, and any other charges that arise. If we take that into account, we get an estimated launch cost of $22 million per Starlink mission.
How Much Starlink Satellites Costs
Advancing Let’s take a look at how much Starlink satellites cost. We don’t know how much each satellite will cost, but SpaceX has already provided a price range. At the end of 2019, they revealed that the Easterling satellite will cost less than $500,000. Their goal, though, was to reduce this to $250,000. Hopefully, they will achieve his target, but to be conservative, the average Starlink satellite will cost a little more, around $300,000. That should account for the dead Starlink satellites that SpaceX has with each sterling Mission from time to time.
SpaceX launches about 60 falling satellites into space, which means that each costs about $18 million. When we factor in the cost of launching the Falcon, we arrive at a price of $40 million per Starlink trip. However, the sole cost required in establishing Starlink is just producing the satellites and launching them or not. We must also consider the cost of building and updating Falcon 9, as well as the cost of satellites themselves.
There’s also the cost of obtaining satellite launch licenses and monitoring the satellites after they’re in space. Fortunately for SpaceX, I believe they have funded the majority of the costs. Commercial contracts cover if not all of their falcon research and development costs, the development of the satellites themselves is not very complicated. When they’re creating satellites, they’re not trying to line up launchers or belly flop star cruisers. As a result, these extra costs should not be too significant.
The mission’s expense, but what caught $10 million every launch just to be safe? When we add everything together, we get a total launch cost of $50 million for each Starlink mission. We can calculate the cost by dividing it by the number of satellites in each mission, which comes to $834000. SpaceX intends to retain each Starlink satellite in orbit for four to five years before de-orbiting and replacing them.
Because we’ve already been conservative, everyone else will say that SpaceX will keep these satellites in orbit for five years. That means each satellite costs $167,000 each year, or just under $14,000 per month. At this point, if we know how many clients each satellite can support, we can calculate how much it costs SpaceX to offer service to each user and how much profit they will make as a result.
Unfortunately, SpaceX has not disclosed how many users each satellite can support, but we can estimate this based on how many satellites they want to launch and how many consumers are playing support. In total, SpaceX sought authorization to support 5,000,000 customers in August 2020.
Charges to the Customers
Using Starlink at the time, they had permission to launch 12,000 Starlink satellites, implying that each satellite would support approximately 416 customers. Dividing the monthly cost of running a satellite by the number of clients it can support yields $33 per month, plus an additional $2, consider customer service and cancellations. Each customer pays us roughly $35 every month. At the moment, SpaceX charges $100 per month for each customer. However, I believe this is primarily due to the fact that they have yet to benefit from economies of scale. Right now, they only have 10,000 users, so their business is undoubtedly in the red as they expand to millions of consumers, though I suspect the lower-priced at $80.00 a month and they’ll certainly introduce a $60 a month option that comes with reduced speeds, given that. People living in remote areas will primarily use Starlink. I believe the majority of them will be more than satisfied with the $60 offer.
Nearly everyone with high-speed Internet jobs lives in or near major cities, and many of these tech hubs already have fibre Internet access, so I’m not sure how many of these people will choose Starlink, but they will give SpaceX the benefit of the doubt. Will claim there’s an even split between persons by city of subscription and it’s a dollar subscription. This means that SpaceX’s long-term average revenue per user is $70 per month. After deducting the $35 that it costs to provide the service, SpaceX has a profit of $35 per customer per month when launching with Falcon Nines.
SpaceX eventually plans to transition to launching with starships, which will not only significantly reduce launch costs but also significantly increase payload capacity. SpaceX is making tremendous progress on Starship development, but even at this rate, it will likely take until at least the beginning of 2022 to begin completing continuous launches with Starship. More practically, we’re likely to be looking at 2023. Alternatively, 2024.
Future Market Planning
So, for the first phase of Starlink, deployment was not an issue because SpaceX primarily uses Falcon Nine. SpaceX aims to launch a total of 4425 Starlink satellites by 2024, and they already have over 1000 satellites in orbit. Completing just two sterling missions per month, as they have been doing, would be sufficient to meet this goal. If each satellite can accommodate 416 customers, as previously stated, SpaceX may support around 1.84 million subscribers by the end of 2023. At $70 per user, SpaceX would generate $128.8 million in revenue and $64.4 million in profit each month on an annual basis.
This works out to $1.55 billion in revenue and $773 million in profit. After deducting 20% for taxes, we arrive at a net annual profit of $618.4 million. If SpaceX decides to IPO, this particular segment of their business will most likely have a tremendously high PE ratio of thirty, forty, fifty, or even one hundred. However, if we’re talking about a well-founded value, I believe 15 is a fine PE ratio. Keep in mind that those starlings are contributing to the funding of Starship. At the end of the day, Starlink is only an Internet service provider, therefore, at a PE ratio of 15, Starling may increase its market value by $9.276 billion, or around $10 billion, by 2024.
But what happens once SpaceX launches its doors with Starship? Except for the launch cost of each rocket and the rate at which SpaceX can deploy satellites, everything we’ve described thus far would remain the same. Elon’s long-term objective for a starship is a low cost of only $2 million. Not to mention that Starship will have more than four times the payload capacity of Falcon 9.
Clearly, this is an extremely ambitious aim, and I sincerely hope they are able to do it, but for the purposes of this movie, a price of $5 million or launch appears to be appropriate. More realistically, I hope you can prove me incorrect. In any case, this would save $17 million off the launch price. I’ve completed the darling objective, reducing it to $33 million. Meanwhile, the payload cost will more than triple, and starship will be able to carry 250 satellites, if not more, for $300,000 each. Each payload will be worth $75 million. That’s $57 million more than the payload of the Falcon Nine. The cost of increasing that emission was $90,000,000. However, at this point, we can divide by a much bigger denominator, which will greatly reduce the cost of each satellite. We get $360,000 each satellite by dividing $90 million by 250 satellites. Spreading that out over five years yields an annual cost of $72,000 and a monthly cost of $6000; with 416 subscribers per satellite, SpaceX will only pay $14.42 in support per client. Accounting for any miscellaneous costs, the monthly fee will be $15 per customer. When asked how many clients SpaceX can service, he said that each launch of 250 satellites will add between 100 and 4000 new customers. If SpaceX maintains two launches per month, they would be able to add around 2.5 million more clients per year, and given that their satellites have a lifespan of four to five years, SpaceX may naturally grow to roughly 10 to 12 million consumers.
If they actually focus on establishing a satellite Internet business, I’m confident they’ll be able to do it.