Hey this is Warren Redlich with a quick update
on Starlink. Elon Musk spoke
yesterday at an
Air Force Event. "Satellite ended up having the same
capability." If you're not familiar with Starlink
Starlink is a satellite network
that is planned by SpaceX and approved
by the FCC. It will be a network of
initially up to 12,000 satellites
each with 20 Gigabits per second of bandwidth
Up to a potential of 42,000
satellites planned in
two orbital shells,
Traveling around the earth
and giving essentially full time access
to anyone anywhere on the Earth
to the internet at high speed
with low latency. Low latency means
when you
request something from the internet
it is responded ...
it responds quicker. One of the problems with
existing satellite networks is the satellites are very far away from Earth
in a higher orbit so it takes longer
for the signal to travel
to that satellite and back.
That additional time
makes the internet feel slower.
The SpaceX satellites will be much closer to Earth
so the satellite signals will not have to travel as far.
They will be over the oceans so people on boats will be
able to use them. They will be accessible by airplanes.
That's already been tested on Air Force planes
that it will work with airplanes. Pretty much anywhere you are
on most of the Earth - maybe not the North Pole or South Pole
Too really far north or really far south, but for most of the Earth
Most places you will have full high speed
low latency internet all the time.
With 10,000 satellites, if each serves 100
people that serves a million people.
If each one of them is able to serve 1000 people that's 10 million people.
As the time goes on that technology is going to improve.
The ability to allocate
the bandwidth to different users at different
moments is going to make this more possible.
You're going to see even more than 1000
users on average per satellite.
Keep in mind
when a satellite is over the ocean there won't be that many users
in range of it. So this may not be perfect.
The average user does not use that much bandwidth over
the course of a day or the course of a month.
That moment when you want the bandwidth it will be there.
At other times you won't be using it and someone else will.
We're going to see the
ultimate constellation of 42,000 satellites
- and again that could get bigger - but the ultimate constellation of
42,000 satellites will be able to
42 million people if it's 1000 per
satellite.
In the end it may go even higher
than 1000 per satellite as the capacity
of the satellites themselves may increase
and the ability to manage the load to serve
different users at different moments may increase.
That's how you can get to 100 million people
using this, or more in the future.
I don't think the limit is really 42,000
satellites. If each satellite is producing
a substantial amount of revenue then it makes sense to have more.
What ends up happening
with a large number of satellites serving a large number of people
with the cost being -
This is another important feature of Starlink that I'll talk about later in this video.
If you're able to make the
cost of getting those satellites into orbit
and getting the system up and running inexpensive
you're able to charge less per user or make more profit
per user. Which makes Starlink very
competitive with existing internet providers.
Providing higher speed both up and down
At the same time providing all of that
at a lower cost or a competitive cost.
This is how Starlink will make a lot of money.
"One of the Muskism quotes is
Failure is an option here. If things are not failing
you are not innovating enough. But my favorite quote
I would like to die on Mars.
Just not on impact. General Thompson, Mr. Musk
over to you."
Elon talked very specifically about Starlink
and he gave away some key details
that I think people will find interesting. First
he said that Starlink is being produced so fast -
the Starlink satellites are being
manufactured so quickly that they cannot launch
them as quickly as they're making them.
"The satellites
are being produced at a rate now faster than we can launch them."
They're currently launching about 60
satellites every two weeks, maybe a little less.
Which would mean they're producing over 120
satellites a month. That is a
very impressive rate of production
for the Starlink satellites.
Another key detail that
Elon mentioned in this talk:
The cost of each Starlink satellite is
now less than the cost of
launching that satellite to orbit -
The cost of transporting the satellite to orbit.
"The cost of the satellite has dropped below
the cost of transporting it to orbit.
Even when taking
a Falcon 9 in the most reused configuration -
Get the booster back and the fairings back.
The cost of transporting
the satellite
to orbit exceeds the cost of the satellite."
When you look at the cost of a Falcon 9 launch,
which is what he was referring to, he specifically
referred to
a Falcon 9 launch with
as much recovery as possible.
They recover the fairings as well as Stage 1.
They do lose Stage 2
Stage 2 costs about $10M.
They're losing $10M on each launch.
Then there's the cost of fuel,
ballpark of half a million dollars.
There's a cost of everything else involved in the launch.
Figure it's
maybe it's $20M a launch. When you divide that
by 60 satellite you get to
around $300K per
satellite cost of launch.
It appears that the Starlink satellites are costing
$300K or less each.
It's likely that they're going to get
that cost reduced. "The cost of that satellite
will keep coming down as we ramp up
rate and make design improvements." Elon
specifically mentioned
they need to get Starship up and running. "We really need
Starship to carry Starlink
in order to get the total
delivered cost to orbit to be
much better than it is today." The purpose of that is
twofold.
1. With Starship up and running they'll be able to launch
more Starlink satellites at once.
It seems likely that Starship could launch
400 Starlink satellites to orbit where the
current Falcon 9 launcher gets 60 of them
into orbit. Getting 400
of them into orbit in one shot would be much
better obviously in terms of speed.
At the same time the hope is that
Starship will be fully reusable.
They will get the cost of each launch down to -
Elon estimated $2 million
including fuel and everything for a Starship launch.
"The cost of fuel and oxygen
is about $900,000 per flight
so if it is fully reusable
you will spend $900,000
for propellant and if you consider
our operational costs maybe $2 million."
It would cost $2 million to get
400 Starlink satellites into orbit -
the launch cost. Which means
you're getting the launch cost down
to $5000 a satellite.
If you can then bring the cost of those
satellites down to $100K
which seems reasonable - maybe it's $200K.
Maybe it's $100K. But you're getting the cost
of getting that Starlink network into orbit
much cheaper. This dramatically increases
the ability to make a profit for
SpaceX.
It is also increasing their ability to lower
the cost to end users. Make it more
competitive and increase the number of subscribers.
That means
Starlink will be able to support
millions and millions of users
paying in the ballpark of $1000/year.
If you get 10 million users paying
$1000 a year
that's $10 billion in revenue.
And they may be able to get 100 million
users paying
$1000 a year. That would be $100 billion
a year in revenue. Combine that with getting
the cost of the Starlink
network down -
The capital expenditure in getting Starlink to orbit.
Keeping the operating cost down.
A tremendous amount of profit for SpaceX.
It's going to become a tremendously valuable company. There was talk about
spinning off Starlink in an IPO.
Which would be a way of
generating a lot of money for all the SpaceX
employees who have stock. It would generate
cash flows to investors.
At the same time allowing SpaceX
to focus on its mission of getting people to Mars.
The other theory is that SpaceX just continues to own Starlink.
It's not clear that Elon really
wants to do an IPO.
He doesn't like the idea of public companies. He likes keeping them private.
But it is a way of rewarding
SpaceX employees
and investors, while allowing
Elon to retain control of the
SpaceX operation which is getting people to Mars.
Presumably SpaceX would continue to
hold a substantial share
of the Starlink operation. Or Elon would continue to hold a
substantial share.
That money could be used to fund
going to Mars. Launching 3 million tons
into space a year. Getting enough
there so we can build a self sustaining colony
on Mars. Just to close -
The most interesting thing is very simply the
biggest news right now is that Elon
related what the cost per Starlink satellite
is relative to the cost of a Falcon 9 launch.
Talked about how
one of the goals of Starship is to be
using Starship to get Starlink into orbit.
When you run the numbers how much that saves.
How much lower cost it becomes to get Starlink
into orbit. To maintain Starlink's
operational status. To keep Starlink's operational cost
down.
Make Starlink a going enterprise
that generates a huge amount of revenue.
A substantial amount of profit.
Making SpaceX a profitable company.
Using all of that to fund the
eventual goal of a self-sustaining colony on Mars.