The SATELLITE 2021: LEO Digital Forum proved to be a font of information about SpaceX Starlink progress and future plans. SpaceX CEO Gwynne Shotwell revealed the current and evolving costs of the Starlink terminal, current status of the service beta, and plans to build out the constellation to serve all of rural America.
Shotwell’s remarks were made within the framework of the “LEO/MEO/GEO: The New World Order” virtual panel hosted by SATELLITE 2021 and included CEOs/Presidents from Eutelsat, Hughes/Echostar, SES, and Viasat.
SpaceX’s Starlink beta program is ongoing with no specific date to transition into production service. “We don’t have a timeframe for getting out of the beta phase, what we want more performance marks for that,” Shotwell said. “We still have a lot of work to do to make the network reliable, we still have drops, not necessarily just because of where the satellites are in in the sky. So we’ll move off of beta, when we have a really great product.” Starlink will stay in beta “until we know the network is reliable and great, and something we’d be proud of.”
Pricing for consumers is unlikely to be complicated once the company moves into production service. “I don’t think we’re going to do tiered pricing to consumers, we’re going to try to keep it as simple as possible and transparent as possible so right now there’s no there are no plans to do tiering for consumers,” Shotwell said.
Regrettably there was no chance to follow up or clarify her remarks, but the emphasis on no tiered pricing for consumers suggests that others, such as government and enterprise users, could or will have tiered plans.
Later, Shotwell made a bold forecast on the number of people Starlink would serve in the future. “My constellation in five years will be able to serve every rural household in the United States,” she stated. “So there’s roughly 60 million people in the rural U.S. And if we just divide by three and say that’s 20 million households, then I definitely have the capability to serve that roughly five years from now, three to five years from now… Our focus initially is the U.S. because they speak English and they’re close, then if they have a problem with their dish, we can get one shipped out quickly.” Analyses for other countries are being done as well.
One of the more surprising pieces of information Shotwell released was the cost of the Starlink user terminal, the most expensive part of the ground equipment. Business Insider estimated the cost of a Starlink dish to be around $2,600 for quantities of one million, based upon information reportedly coming out of ST Micro.
“We were at about $3,000 terminal cost,” Shotwell said. “We’re less than half of that right now, in fact we just rolled out with our new version to save about $200 off the cost. We are not charging our customers what it costs us to build those terminals right now. But we do see, our terminals coming in the few hundred-dollar range within the next year or two.”
Shotwell’s statement that SpaceX is manufacturing Starlink terminals at under $1,500 and essentially subsidizing the cost to end-users by charging them $499 for the equipment has several implications. Space has dramatically lowered the cost of the terminal in a matter of months while it continues to ramp up large-scale production; the company’s recent expansion to Europe suggest it has mastered and is comfortably with the underlying technologies and production line to ship unites overseas.
In her closing comments, Shotwell positioned Starlink as a complement to “giant providers” such as AT&T and Comcast, and “best suited to distributed, highly distributed rural or semi-rural populations” but challenges remained.
“We’ve had the pleasure of working with a small but mighty set of customers in the past so, scaling to consumer customers is definitely a challenge,” Shotwell said. “ And also making sure we can build a reliable network poses a challenge but, none of which we can’t solve, and we’re certainly looking forward to, to doing great work here in this in this field.”
