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Comment by ricardobeat | Hacker News Reader

And why should one assume the cost once deployed in the millions will equal the cost while in beta with 60k users? There's another comment here already mentioning their prediction of a $300 cost for the dish in the future, you can only expect the subscription to go down as well.

Plus, the places where Starlink is the most useful - rural areas - already have sky high costs. I just looked up what service looks like in Brazil: ~R$400/month (US$76) for 20mbps, with a 80GB data cap. When you have to buy the dish it costs over R$10k (~US$2000). This is the best you can get.

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According to them, the satellites have a maximum life span in orbit of 5 years. They can launch 60 satellites at a time, at a cost of 50M$ per launch. So they need to spend ~1.4 billion dollars every five years just to keep the constellation at its current size, ignoring the cost of the satellites, ground stations etc. If they have 500k customers, that means that each customer must pay ~50$/month just to pay for the cost of keeping the satellites in orbit.

Add ground station costs, internet bandwidth, satellite production, dish production, customer service, personnel costs, R&D and you'll quickly see that the current prices are much below what is required to be profitable. Even if they have 5M customers (very hard to do in 5 years time), I wouldn't be hopeful for their prospects of not going under.

Of course, they may well survive on government handouts.

Edit to add: the bottom 45% who don't currently have access to high speed internet are unlikely to afford even a 300$ dish and an expensive data plan. The price of current plans is one of the main reasons why they don't have access in the first place.

If they are able to get Strarship and the Super Heavy Booster working, which at this point in time I think is very probable, those economics will change a good bit as the cost of launch will come down a lot.

$50M is the launch cost for SpaceX customers. Musk has said in an interview that the marginal cost of a reused Falcon 9 launch is $15 million. That means even the tiny subscriber base they have at the moment is already paying a significant chunk of the launches.

That would make your numbers $420m every five years, or $84 million a year - slighly more than your average telecom CEO compensation.

But the goal for starship is $2m per launch. Let's assume that is bullshit and go for $10M instead, and only 300 satellites per launch. That's already down to ~$10M/year to maintain the entire constellation. Now you have room for all the other costs you mention. If they reach the stated goals, it will cost peanuts... you can see where this is going. Starship will be a ridiculous leap in launch costs if it comes to fruition.

The max capacity for the network, once at 42k satellites, is estimated to be around 50M people worldwide. Plus, you could have a downlink shared, say, among 50 people and spread the cost - 1-10mbps is still miles beyond 'no internet access'.

You might think the plan is crazy, but the math checks out. If this whole thing works, they could charge $10/month and be in the green - the satellites themselves will be the cheapest part of the whole system. No rent, no right of way, no construction, no maintenance work, free energy and extremely low material costs.

To add on the costs (yeah I have nothing better to do)

- ground station: must be negligible compared to everything else. They are literally planting giant routers out in a farm, need to pay rent, power and cabling to an exchange. Zero other infrastructure costs

- internet bandwidth: despite Netflix's attempts, ISPs have peering agreements that are usually free, as does Starlink

- satellite production: nobody knows, but they have said the payload is cheaper than the launch, so somewhere between $250-500k each at start

- customer service: online only, seems like the dish is self-diagnosing, will likely end up being much lower than traditional broadband

> - ground station: must be negligible compared to everything else. They are literally planting giant routers out in a farm, need to pay rent, power and cabling to an exchange. Zero other infrastructure costs

Fair enough, though you're neglecting the costs for building this all over the world, if they want to get access to any size of market.

> - internet bandwidth: despite Netflix's attempts, ISPs have peering agreements that are usually free, as does Starlink

Actually, according to Cloudlflare[0], you still need to buy a significant amount of traffic through transit agreements - cloud flare pays for 40% of its traffic in Europe (at a price they don't disclose), 60% in the USA (same price as in Europe), 40% in Asia (at 7 times the European price), 10% in Africa (at 14 times European price), 40% in South America (at 17 times European price), and 50% in Oceania (at 17 times European price). Only the Middle East region is 100% peered for them.

So the cost to actually deliver internet is definitely not going to be 0.

> - satellite production: nobody knows, but they have said the payload is cheaper than the launch, so somewhere between $250-500k each at start

So that is another 15M$ per launch at their declared aspirational cost (or an extra 100M$ per launch if you believe the Starship numbers). Just maintaing the entire constellation today would cost ~100M$/year, assuming almost all satellites reach their 5 year life span (current failure rate is 6% after one year).

> - customer service: online only, seems like the dish is self-diagnosing, will likely end up being much lower than traditional broadband

You can't sell online only customer support for access to the Internet if you want to reach any kind of realistic market. Furthermore, customer service more broadly includes delivery, sales, marketing, training materials; and this will be required all over the world, since they must target customers in remote places with little or no acces to the internet today.

[0] https://blog.cloudflare.com/bandwidth-costs-around-the-world...

Fair points. Though I’m not sure cloudflare is a good reference - they are a content provider and will pay for a competitive advantage (latency). The post mentions 50% of their costs come from 6% of traffic, they could simply choose to not pay for transit and let these be rerouted elsewhere.

Once Starlink has the satellite “mesh” operational they would probably become a tier-1 ISP and have zero transit costs. Maybe even sell traffic to other ISPs.

Sure, that's a good point, and the Cloudflare article is from 2016, so the market may have advanced as well.

On the other hand, unless they somehow get the laser communication working, which is still a research problem despite their optimism, they have way too high latency to act as a tier 1 ISP - all traffic currently goes consumer - 1 satellite - ground station - Internet.

Your math is way off. 50M subs with the coverage over land and total bandwidth will put their provisioning rate (Bps/sub) way below even the Geo satellite providers. They need to charge a lot more or provide slower service by having more people.

For the full network:

    42000 sats
    20gbps each
    ~1k users
    2gbps @ 100:1 oversub
    1gbps @ 50:1 oversub

And that’s assuming next generations will not improve downlink speeds. It does assume satellites would be fully utilized which is wrong unless we populate the oceans, but that’s the theoretical max.

That's the entire point. They're mostly over the ocean/areas without high-paying customers 70-90% of the time. Because of that, it would be more like (in the best case): 42k sats@20G * 0.2 * 5 million subs target = 33Mbps/sub. However, that's not even close to realistic either because the high-paying subs are in the US and parts of Europe only, and you can't keep piling 42k satellites in the same plane. So in reality, that will be cut significantly from that.

> Musk has said in an interview that the marginal cost of a reused Falcon 9 launch is $15 million.

Musk has said many things in interviews that have little to do with reality. Even if that number is true launch costs are more than the rocket itself. Even if we accepted the number, to make economic sense, they would have to get more value from 60 satellites than the $35M of profit they would make on each launch if they were launching commercialy.

> But the goal for starship is $2m per launch. Let's assume that is bullshit and go for $10M instead, and only 300 satellites per launch.

Prices for rockets similar to Starship are in the $150-200M range, so that is more the ballpark I expect from Starship, if it does fly. Perhaps it can go down to as low as 75-100M range, half the current cost of similar rockets! $10M is fantasy.

Not to mention, they are already being accused of breaking environmental regulations and other problems, so it wouldn't be surprising if launch costs actually go up if they are to maintain compliance.

There is no other fully reusable rocket similar to starship (or even different, it doesn’t simply exist). Please stop inventing numbers and lying. And for your information starship already fled and landed and there is an orbital launch attempt likely in the next 2-4 months.

I'm talking about the costs for launching a rocket of similar size. And note that for Falcon 9, the difference in price for new rockets VS reused boosters is 62M -> 50M, not an almost hundred fold decrease.

Reply, because I can't edit: so far, only the second stage stage of Starship has been flown. The SuperHeavy booster has not yet been flown at all,nevermind successfully landing, and ditto for the two-stage system.

> Prices for rockets similar to Starship are in the $150-200M range, so that is more the ballpark I expect from Starship

Why would they even develop this new vehicle if it turns out more expensive than Falcon 9, or Falcon 9 Heavy? That would not make any sense. Plus those rockets are not reusable.

They have already achieved a reduction in price/kg by at least 10x with Falcon, see page 11 here: https://ntrs.nasa.gov/api/citations/20170009968/downloads/20...

> $10M is fantasy

$2M is the fantasy, I already added 400% to account for skepticism. Starship is not a conventional launch vehicle, it's designed for full reusability with a turnaround time measured in hours (vs the current 14-50 days for a Falcon 9 refurb), like an airplane. Land, refuel, safety checks, fly again.

> Why would they even develop this new vehicle if it turns out more expensive than Falcon 9, or Falcon 9 Heavy? That would not make any sense. Plus those rockets are not reusable.

They are making a bigger rocket and making it reusable. The bigger the rocket, the more expensive the launch. For Starship the price per ton should be smaller than for Falcon 9 and Falcon Heavy, but that doesn't mean it should be expected to be cheaper in absolute terms than much smaller rockets.

> $2M is the fantasy, I already added 400% to account for skepticism.

You're still talking about a price that would be a hundred times better per ton than any other rocket in history. Allow me to be extremely skeptical, please. Musk's arbitrary promises do not set a benchmark for me - he has been known to lie through his teeth about things like hyperloop, FSD, Neuralink, Starship earth to earth, and timelines in general.

And on the same note, what Starship is theoretically designed to do and what it will actually do when it is actually deployed may be significantly different things.

No, there are so many wrong statements in your comment that I don’t even know from where to start. The current cost for 60 satellites on falcon 9 is around 10M$ if I remember correctly. From next year they will likely be able to send 400 satellites for the same price with starship and the aspirational goal is to have a cost of 2M$ per launch. It implies a cost of ~55M$ to send 11000 satellites. Even if they will never reach that aspirational goal it would probably cost them ~300M$ for 11k satellites and ~1B$ for 42k satellites at 10M$ per launch. It’s perfectly feasible, you just can’t understand how starship is such a game changer.

> The current cost for 60 satellites on falcon 9 is around 10M$ if I remember correctly.

Apparently Musk is claiming 15M$. The public numbers for a launch are 3.3 times that, so even if that is pure profit, it's awfully good profit compared to what Starlink is bringing in.

> From next year they will likely be able to send 400 satellites for the same price with starship and the aspirational goal is to have a cost of 2M$ per launch.

This is based on Musk time - the likelihood of that happening in this time-line is not particularly good, given the track record of his promises. Time will tell.

The claimed 2M$ price is laughably 'aspirational'. Until I see it, I don't believe a word of it.

> It’s perfectly feasible, you just can’t understand how starship is such a game changer.

Let's wait for it to actually fly to space and back until we declare it such a game changer, ok? Musk's promises have a habit of never happening, or happening much later than claimed.

There is absolutely no basis for the cost to be that low. Nobody believes that. Not even Elon, since he's commented on it several times.

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