Yeah, but if they spread the cost across many customers, the cost per customer is going to be much smaller, even if it doesn’t last as long before needing a replacement.
If it costs $100,000 to build a fiber line to a single home for 30 years (360 months) that house will need to pay $278/month for 30 years to break even. Throw in interest rates/inflation, and it’ll be more.
But if a satellite that costs $1.5 million to build and launch into orbit can serve even 200 customers for 5 years, that’s only $125/month per customer.
As it stands right now, Starlink serves something like 12 million customers on 10,000 satellites. So that’s an average of 1200 customers served by each satellite, which is what makes $50/month service feasible as a business.
I think you’re missing the amortization of the r+d and capital upkeep of the whole launch complex. Since the satellites have such a short lifespan you can’t only count the upfront costs of manufacturing and launching, you have to include the whole shebang. The starlink system has to include the entire Falcon 9 architecture as overhead. And since it’s so integral to their ultimate business model you should also include all the development costs of starship to each starlink satellite. The ROE probably doesn’t look so good including all that, which explains Space Ai.
I think the $1.5 million per satellite includes the amortized costs from everything else. They’ve launched 10,000 satellites so far, so the other fixed costs are spread around across all the satellites and the service itself. And they have lots of paying customers, including maritime and aviation customers. The rural customers who can be served by the network are already additional revenue, and don’t cost any extra to serve.
Similarly, the development costs of each rocket should be amortized across all the ways the rocket is used, including external paid customers unrelated to Starlink, who just pay for their own payloads to go to space.
Looking it up, SpaceX had $11.4 billion in revenue from Starlink in 2025. As far as I can tell, that segment of their company is profitable, and it’s everything else that is a disaster.
But my point is simple: the useful lifespan of a satellite just changes the amortization calculation. If there are enough customers who will use it, then it can still be cheaper than fiber trenched to a single customer.
Yeah, but if they spread the cost across many customers, the cost per customer is going to be much smaller, even if it doesn’t last as long before needing a replacement.
If it costs $100,000 to build a fiber line to a single home for 30 years (360 months) that house will need to pay $278/month for 30 years to break even. Throw in interest rates/inflation, and it’ll be more.
But if a satellite that costs $1.5 million to build and launch into orbit can serve even 200 customers for 5 years, that’s only $125/month per customer.
As it stands right now, Starlink serves something like 12 million customers on 10,000 satellites. So that’s an average of 1200 customers served by each satellite, which is what makes $50/month service feasible as a business.
I think you’re missing the amortization of the r+d and capital upkeep of the whole launch complex. Since the satellites have such a short lifespan you can’t only count the upfront costs of manufacturing and launching, you have to include the whole shebang. The starlink system has to include the entire Falcon 9 architecture as overhead. And since it’s so integral to their ultimate business model you should also include all the development costs of starship to each starlink satellite. The ROE probably doesn’t look so good including all that, which explains Space Ai.
I think the $1.5 million per satellite includes the amortized costs from everything else. They’ve launched 10,000 satellites so far, so the other fixed costs are spread around across all the satellites and the service itself. And they have lots of paying customers, including maritime and aviation customers. The rural customers who can be served by the network are already additional revenue, and don’t cost any extra to serve.
Similarly, the development costs of each rocket should be amortized across all the ways the rocket is used, including external paid customers unrelated to Starlink, who just pay for their own payloads to go to space.
Looking it up, SpaceX had $11.4 billion in revenue from Starlink in 2025. As far as I can tell, that segment of their company is profitable, and it’s everything else that is a disaster.
But my point is simple: the useful lifespan of a satellite just changes the amortization calculation. If there are enough customers who will use it, then it can still be cheaper than fiber trenched to a single customer.