SpaceX says its Starlink satellite internet service has surpassed one million active subscribers just two years after its first limited beta.
SpaceX began launching operational Starlink satellites in November 2019. Just over three years later, the company has successfully launched over 3,600 Starlink satellites, with around 3,000 operational and ready to serve customers. This network expansion – unprecedented in the history of spaceflight and producing a constellation of satellites of one magnitude greater than another – has also allowed SpaceX to dramatically increase the number of active users it can serve.
In June 2022, CEO Elon Musk reported at a town hall meeting that SpaceX’s Starlink Internet had “nearly” 500,000 users. Just six months later, SpaceX says that number has doubled to “over 1,000,000 active subscribers”, indicating an average of around 2,600 new subscribers per day during the second half of 2022. million subscribers, makes SpaceX directly comparable to companies that have offered satellite internet for decades, just two years after their first offering entered beta.
In the United States, the Hughes Network is SpaceX’s biggest competitor and currently has just under 1.3 million subscribers in the Americas. Data from Cloudflare suggests that only half of Starlink’s much more international customer base is located in the United States, indicating that SpaceX has gained nearly 40% more subscribers after offering its competing service for just two years. This growth – around 250,000 new subscribers per quarter since March 2022 – is the exact opposite of what virtually every other satellite internet provider has seen in recent years, most of which are slowly losing subscribers instead of growing.
CEO Elon Musk’s comments and SpaceX’s actions indicate that the company is unlikely to slow that growth significantly any time soon. In 2021, Musk noted that SpaceX would only really tackle congestion when Starlink had “several million” subscribers. In late 2020, SpaceX also sought FCC authorization to operate up to five million user terminals (dishes that connect to Starlink) in the United States alone.
Starlink’s design makes it almost impossible to prioritize a country or region. Instead of the large geostationary satellites most competitors operate tens of thousands of kilometers above the Earth’s surface, where they hover more or less over a region of your choosing, Starlink satellites operate at just 550 kilometers (~340 miles). At that altitude, each satellite orbits Earth every 95 minutes and spends just a few minutes (or even seconds) above a given country. This strongly encourages SpaceX to serve customers in as many countries as possible, each with its own painful go-to-market process for a new communications provider.
After years of work, SpaceX’s government relations team gained approval to operate Starlink in about a quarter of all countries on Earth. Together, these countries represent more than 1.5 billion people, or 19% of the world’s population.
But Starlink likely only needs to convert a small fraction of those people into customers to be a profitable and financially sustainable pursuit for SpaceX. The total capacity of the first Starlink constellation of 4,405 satellites can only be estimated, but it is much easier to roughly estimate SpaceX’s total Starlink revenue. The cost of a subscription varies greatly by country, but Cloudflare says the vast majority of subscribers live in countries where it costs around $100-110 a month and around $600 for a subsidized dish. Even taking into account that SpaceX pays part of the Starlink service bill in Ukraine, it is almost certain that the network already generates more than $1 billion in revenue per year.
While the FCC is making things far from easy, SpaceX is already gearing up to start building a second-generation Starlink Gen2 constellation with nearly 30,000 satellites, each of which can be launched with nearly more usable bandwidth than satellites. Gen. 1. If SpaceX can continue to find new customers around the world, one million subscribers using Starlink Gen1 when the network is less than 70% full implies that the highest performing version of Starlink Gen2 could serve about 10 to 12 million subscribers at least. Assuming SpaceX does not significantly reduce revenue, recurring revenue for 12 million Gen2 subscribers could be $14.5 billion per year.
Getting Starlink to profitability will be an even bigger challenge – and one that CEO Elon Musk has indicated (perhaps overzealously) could bankrupt SpaceX if the company tries to do so with its Gen1 design. But securing one million active subscribers in two years and around 750,000 in the last nine months arguably indicates that SpaceX is on the right track and should allow the company to reduce its fundraising load or increase its fundraising load. expansion expenses.