A dish for Starlink satellite terminal setup in front of an RV.
SpaceX
Elon Musk’s SpaceX has announced that it is no longer bearing the cost of producing Starlink antennas for its satellite internet service, marking a significant milestone towards improving its profitability. Jonathan Hofeller, SpaceX vice president of Starlink and commercial sales, stated during a panel at the World Satellite Business Week conference that the company had been subsidizing terminals but had now reached a point where it no longer needed to do so.
The consumer Starlink antennas, known as user terminals, are sold by SpaceX at a price of $599 each. For more demanding customers, such as mobile, maritime, or aviation users, SpaceX offers antennas ranging from $2,500 to $150,000 each, bundled with its service.
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Initially, when SpaceX started selling its Starlink service, the manufacturing cost of the terminals was around $3,000 per unit. However, by early 2021, the cost had been reduced to approximately $1,300 per terminal. Jonathan Hofeller’s recent comments indicate that the terminals now cost less than $600 each to produce, thanks to mass production savings which he considers as one of the critical factors contributing to their success.
Jonathan Hofeller, the SpaceX Vice President of Starlink and Commercial Sales, speaking at the World Satellite Business Week conference in Paris, France on Sept. 13, 2023.
Michael Sheetz | CNBC
Earlier this year, SpaceX President and COO Gwynne Shotwell confirmed that Starlink had a cash flow positive quarter in 2022, and the overall company reportedly turned a profit in the first quarter of 2023. While SpaceX, with a valuation of about $150 billion, has been in operation for more than two decades, its business ventures in rockets, spacecraft, and satellites require significant capital investment. In 2021, Elon Musk stated that Starlink was experiencing a “deep chasm of negative cash flow” before it could become financially viable.
In May, SpaceX disclosed that it had approximately 1.5 million Starlink customers. Jonathan Hofeller did not provide an updated user count, but he mentioned that Starlink has surpassed the 1.5 million milestone and aims to expand to millions more customers, including both consumers and enterprises worldwide. SpaceX has already deployed over 5,000 Starlink satellites and continues to launch them at a rapid pace, with twice-weekly launches being the new norm.
On the same day, European satellite operator SES announced a partnership with Starlink to jointly offer their communication services to cruise ships, a market that both companies currently serve. SES CEO Ruy Pinto stated that this collaboration is just the beginning, and the companies anticipate further market offerings.
