On 3/23/2022 10:44 AM, Frank Howell wrote:
SpaceX’s internet-from-space program Starlink is increasing prices for
both the purchase of Starlink kits and for the monthly service,
according to a new email sent out to customers this afternoon reviewed
by The Verge. The company says the “sole purpose of these adjustments is
to keep pace with rising inflation.”
Originally, opting into Starlink required a $499 upfront purchase of a starter kit with all the necessary supplies, including a user terminal,
or antenna, for connecting with SpaceX’s satellites. Customers would
then pay a $99 monthly charge to keep the service running. Now, the new monthly price going forward will be $110. All new orders of the Starlink
kit will now cost $599, and anyone who put down a deposit for the
original $499 kit will have to pay $549 instead. The new monthly prices
will come into effect at different times for different customers.
How will these prices enable poor countries to access the internet?
When talking about Mr. Musk's businesses it's important to
remember that his greatest strength is salesmanship.
"Who is Starlink really for?
The boom in LEO satellites will probably change the lives of customers
who’ve struggled for high-speed internet—but only if they can afford it."
"“It’s really meant for sparsely populated regions,” SpaceX founder Elon Musk said at a conference in June. “In high-density areas, we will be
able to serve a limited number of customers.” And many rural citizens of
the world will be locked out because they won’t be able to afford it.
Starlink must get costs down fast in order to expand its customer base,
but it must also make enough money to continue launching hundreds or
even thousands of satellites every year. It’s a delicate needle that
might be impossible to thread."
"But it’s not totally clear whether rural America is a viable customer
base for Starlink. The biggest issue is cost. A Starlink subscription is
$99. Speeds can vary greatly, but the average user should expect 50 to
150 megabits per second. You’d have to pay traditional satellite
internet companies like Viasat (which operates geostationary satellites)
double that amount to get the same speeds. Not bad.
It’s the upfront expense that will hit you hardest with Starlink,
however. Costs for things like the satellite dish and router come out to
a whopping $499—and that equipment is sold to customers at a loss.
SpaceX founder Elon Musk has previously said he hopes these costs can
come down closer to $250, but it’s unclear when or if that might happen.
For much of the rural world, in America and elsewhere, the price is
simply too high.
So who will the first Starlink users be? The physical and financial
demands of building satellites and launching them into orbit (though
cheaper than ever, still a very expensive enterprise) mean Starlink will
be operating at a loss for some time, says Derek Turner, a tech policy
analyst at Free Press, a nonprofit that advocates for open
communication. And getting costs down will mean looking at customers
beyond just unconnected individuals in the countryside.
Instead, the early customers are more likely to include the US military,
which when operating in remote areas often relies on geostationary
satellites plagued by congested service and high latency. Both the Air
Force and the Armyare interested in testing Starlink. Some intelligence
experts have pointed to the troubled pullout from Afghanistan as an
example of where the service could have helped.
Airlines that want to offer passengers faster and more stable in-flight
Wi-Fi are also looking into Starlink. Other commercial businesses in
rural areas might also find value in it. And of course, there are
techies and curious customers in the suburbs and cities with the money
to try it out.
In Turner’s view, adding those customers could help bring prices down
for everyone, but it also means less bandwidth to go around. Starlink
can offset this problem by launching more satellites—which it eventually plans to do, but that’s assuming it has enough subscribers.
Musk has said it will take tens of billions of dollars in capital before Starlink has enough capacity to generate a positive cash flow. It’s
launched 1,600 satellites so far with no problem, but the eventual goal
of 42,000 is an entirely different matter. “It doesn’t scale as
favorably as wired broadband does,” Turner says. It’s not at all clear
yet how many satellites Starlink will need in order to deliver reliable high-speed internet to hundreds of thousands or even millions of
subscribers logging on at the same time.
And for many customers, especially commercial businesses, there are
cheaper alternatives to Starlink that can still fulfill their needs."
"Underdeveloped parts of the world might find Starlink to be a boon,
since many of these places do not have physical networks like the cable
system that the US laid out in the 1970s, ’80s, and ’90s. But beta
testing so far is exclusive to the US, Canada, parts of Europe,
Australia, New Zealand, and Chile. It’s too early to tell what kind of
impact it could have in the developing world, especially if subscription
and equipment costs stay high."
TB
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