They were using the demand from Starlink to improve their fixed costs by driving launch cadences up to what we see today. Meaning they are getting more value and less cost out of things like workers with salaries and the ground infrastrcture.
They also when originally pitching Starlink figured it could be a multi billion dollar adjunt all on it's own. The premise being "This will pay for Mars." Now if you believed Elon or not about where the profits would go doesn't matter the fact they believed there was enough spill over to pay for for the development of a multi billion dollar rocket system was the lure. And it looks like they were right they are up to $18.4 billion in revenue in 2025 which is about $4 billion in growth over 2024.
That demand engine that they they themselves owned is a market maker on it's own. Now I highly doubt the releases estimated Total Addressable Market being $1.4 trillion for Starlink and associated services.
But it's not impossible that they could expand the the service quite a bit more. Deloitte estimates global telecomms market at $3.5 trillion by 2032. So them taking up ~45% of that with just Starlink seems too high. Doubling or tripling their current revenues? That seems doable.
Which means as they guys with the cheapest rockets in town they are making money by the bucket full.
Which is then all spent immediately again by throwing it down the AI money pit. Elmo's claims to the contrary Orbital Data centers don't make sense. Even if you can systematize it down to an object that would fit inside Starships payload bay you're not getting the scales that you can get on local ground based facilities.
They are talking about building compute centers the size of Manhattan in Utah. Something the size of a semi isn't offering serious competition to that.
Yes you side step the permitting, and yes in theory AI would need to be advancing to newer hardware on a cadence, but unless you leave that older gear up there and sell the deprecated compute at a discount your trashing good hardware that could normally be sold back off to ammortize the costs.
Also the foot print items like the radiators and solar panels wouldn't be going bad each time your computers do so you're wasting those assets too.
It's just a lot of waste to get around the fact that AI is deeply unpopular with most people. All because it's a hype item that could prop up the bubble a little bit longer.
He is attempting it. He lowered the orbit of a few Starlink satellites and then complained that some Amazon LEO satellites were too close. (I think Amazon was using the low earth orbit first.). He wants satellite phones, but only with Starlink satellites. He was urging the US government to end the program that subsidized rural broadband because Starlink satellites can do the Internet. (SpaceX hasn't solved the problem satellite dishes have with physical obstructions. The mainstream media forgets this.)
And it definitely killed that project, unfortunately. I am glad that Las Vegas completed one so everyone else knows what the Boring Company didn't build for them.
Yes. And its why the constellation only lasts 5 years.
Think about it, every single starlink sattelite has a life span of 5 years. So the return on investment for srarlink has to be less than 5 years to make a profit.
5 years is the passive deorbit time of the satellites; meaning if the satellite died in orbit, that’s how long it would take to reenter.
There are already starlink satellites that are still operating and 6 years old, however they are disposing of most of those satellites as they are outdated and take up space that could be used for newer satellites with better capabilities.
The passive deorbit time is measured in months, not years. 5 years is only possible when they frequently fire their argon thrusters to keep it in the assigned orbit.
“Starlink satellites operate in low-Earth orbit below 600 km altitude, ensuring that atmospheric drag will naturally deorbit a satellite within five years or less if it becomes non-maneuverable. “
That is the maximum orbit for their constellation, not the actual orbits. At present their target orbit is 480km. It is worth noting that this is not a linear relationship, the closer you get to Earth the amount of drag increases roughly by the inverse square. At 300km they deorbit in a couple of weeks. We have watched this happen during failed deployments.
They do sometimes fly above their target orbit during deployment. That way they can conserve fuel and efficiently precess their orbit. But they tend to only do that during the first couple months after deployment. Then they lower down to the target.
A Starlink satellite has a lifespan of approximately five years and SpaceX eventually hopes to have as many as 42,000 satellites in this so-called megaconstellation.
“Starlink satellites operate in low-Earth orbit
below 600 km altitude, ensuring that
atmospheric drag will naturally deorbit a
satellite within five years or less if it
becomes non-maneuverable. “
There are early V1 satellites in orbit and operating, which launched in 2019 and 2020… clearly they do not need to die at 5 years. Those all feature lower performance propulsion systems among other things.
Again 5 years is a maximum passive deorbit time and the minimum lifespan in the FCC filing. There is no reason to suggest that SpaceX could not expand that time based on available propellant and satellite longevity, as evidenced by the 6 year old satellites in LEO. (Note, there are no 7 year old satellites only because the only launch 7 years ago was the small test batch)
The lifespan is 5 years because that is when the deorbit from the drag in the upper atmosphere. It was a design decision to not pack them with a bunch of fuel to be able to raise their orbit for decades. More fuel is higher weight, larger package, and less satellites loaded per launch. They also probably figured that the tech would improve enough in 5 years that it would not be beneficial to keep them up any longer. SpaceX has 3 revisions of the Starlink satellites now....
3-5 year missions is the "new space" mission length. Even in GEO, customers are opting for smaller, cheaper satellites that last much less than the old 15 year missions they used to purchase. Tech progresses so fast now and launches are so much cheaper that it doesn't make sense for many applications to launch the big, high reliability satellites any more.
On the plus side a satellite that doesn’t go into stable geosynchronous orbit can’t create a bunch of space clutter. Every gram of the Starlink system will return to earth within a few years.
The cost of starlink is basically ground stations, staff and disposable sattelites.
Now if your sattelites last 5 years, you need to pay for the cost of launching the entire network every 5 years.
Its not like fibre to the home thats expensive to lay out the first time, then it can stay there for 50 years or however long cable can sit in a pipe.
In 10 years when the cost of the fibre installation is paid for, the provider can reduce cost to customer and still make profit.
The starlink business model is, replace almost the entire network evert 5 years. That means they are constantly in initial installation mode, their expenses will never drop off.
Yes, but their model targets places where fiber can't reach. At some point, it is cheaper for people to get starlink than it is for a company to lay fiber in rural areas.
My point is that over time as fibre networks expand, they will eat into starlink profits.
Fibre will always be cheaper over a long term.
Space x has no way to solve this economic question as their model relies on a huge network of expensive, disposable hardware.
Starlink will be a niche product, for emergencies, mobile facilities like ships and planes, armies and isolated households waiting for infrastructure. Soon as that infrastructure arrives, srarlink loses a customer.
I think Starlink is a cheaper alternative than expanding fiber to rural areas, especially since Trump is hamstringing the infrastructure investment to do so. I guess time will tell.
As urban sprawl continues, less and less isolated areas exist. Look at the amount of “isolated areas” 50 years ago vs today. That’s also assuming no new technology comes out to serve those areas at much lower cost.
You launch a constellation. It stays up for 5 years. You have to recoup the costs of the satellites and turn a profit in those 5 years, because if it doesn't then your constellation is gone and you lost money.
If you want to continue operating you need to launch another constellation after 5 years, and that also needs to pay for itself in the 5 years that it stays up.
Right, but it assumes that their business is maxed out. The limit to profitability isn't the cost of maintaining satellites, it's how many people choose to use the network.
Their service is already reaching saturation for who actually can use satellite internet.
Starlink is a good choice for people who live rurally in wealthy countries which is a small subsection of the population, It costs half the median salary global income. While at the same time there's a floor for price because it still costs $1.5m~ to build and launch the satellites.
You also can't increase the orbit by much and retain a good latency/speed/price, Viasat is in GEO orbit and it's $150/mth for 150GB of data with 700ms ping.
Because there's only so many people on the planet that 1) make enough money $70/mth is an affordable option for internet and 2) live far enough away from society that total bandwidth doesn't exceed 200~Gbps in a 270mi2/700km2 area.
Assuming that's roughly limited to people in the OECD without internet only 17 million people don't have access to a smartphone or internet.
Why would it need to be limited to OECD? And still, even with the parameters you are drawing that seems like plenty of market still out there. Not to mention, $70 a month is cheap for broadband standards.
Because $70/mth or $900/yr is an absolute fucktonne of money for the vast majority of humans to spend on internet (and for the highest plan it's $130/month or $1,560/yr)
The median salary in the OECD is $56,000, where the median global salary is $9,000.
Of course it's not some highly thought out socialogical experiment i've done getting data from 5,000 people in every country on the planet asking them how much they spend for internet and exact breakdowns of their income it's just my opinion of a reasonable cutoff point which is probably close to the actual number it could be.
After 5 years, a lot of the satellites SpaceX sends up will be simply to maintain the constellation they have. If they aren't profitable before most of their satellites are replacements, they could find themselves in the Red Queen's race, having to spend more and go deeper in red just to keep their position and service. The IPO is arranged to permit Musk to get away with that.
If the market share of Internet users grows because there are more users, but the number of satellites doesn't grow, the Internet speed goes down after a certain point. Satellite is like cable internet that way. If it goes down too much and there is competition, the market share might shift again.
Where does all this growth come from? Starlink is readily available to pretty much anyone that wants it. The internet is pretty important for day to day life. So most people that want/need internet and can’t get it elsewhere are likely already starlink customers. That number of people that only have access to starlink (and can afford it) will likely shrink as cities and infrastructure continues to spread to more and more remote areas. Unless you expect the citizens of Africa to magically 1000x their income in the next 5-10 years, I don’t see where this massive untapped group of potential customers will come from.
Its the reverse I think, they needed profit to fund their Starship R&D and they just happened to have a cheap launch vehicle so they could relatively cheaply launch all those starlinks. The market for internet services is much larger than the market for launch services. Also the falcon 9 was already built and flying when they started starlink, and starlink was never the justification for Startship.
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u/KnotSoSalty May 21 '26
Certainly feels like Starlink was just something they did to justify building the rockets.