I am happy to see the conversation about starlink escaping over here,
because it is increasingly a game-changing technology (I also run the
starlink mailing list, cc´d)...

On Sat, Jun 17, 2023 at 3:56 PM Tom Beecher <beecher@beecher.cc> wrote:
>>
>> As I mentioned elsewhere, I'm not sure that the current economics are the real economics.

There is a whole other cluster on the drawing boards, called
Starshield, which you can read about here:
https://www.spacex.com/starshield/

The current "retail"economics are limited to US allies as a result of
the ukraine war showing how important information and bandwidth are to
modern warfare. There are also political implications to downlinks in
each country.

I imagine, for example, that India is holding off on licensing until
Musk gets them a tesla factory.

Multiple other countries are making a huge investment into retaining
control of the "spacewaves", so there´s that also.

>I'm pretty sure they've been purposefully throttling demand because they still don't have the capacity so it would make sense to overcharge in the mean time.

Throttling demand is not how I would put it. Each cell has a limited
capacity, so starlink has been running promotions to get more
subscribers into more rural cells where the capacity exists.

I have kvetched elsewhere about how poorly starlink manages bandwidth
and bufferbloat currently, but they are largely better than modern day
5G and DSL, so...

>  Is there something inherent in their cpe that makes them much more expensive than, say, satellite tv dishes?

The original cost/dish was about 2k, so they were selling those at
well below the install price, with a ROI of about 12 months, given
that figure. I imagine with mass manufacturing the cost/dish has come
down substantially, and they also charge a realistic price on the
business quality dish of $2500. It would not surprise me if the basic
dishy essentially cost less than 500 to manufacture nowadays.

The default wifi router, which many replace, cannot be more than 50
dollars on the BOM.

> I can see marginally more because of the LEO aspect, but isn't that mainly just software? It wouldn't surprise me that the main cost is the truck roll.

There is no truck roll. They have gone to amazing extants in - put the
dish in a clear area, power it up, you are on.

Establishing infrastructure, like downlinks, connected near fiber in
civilization does have a large cost, takes time, and is also subject
to government regulation.

>
> - Starlink currently reports around 1.5M subscribers. At $110 a month, that's $165M in revenue,

Creating A 2B dollar/year business in 4 years is quite impressive. A
reasonable projection would be 10m subs in 4 more years, e.g.
10B/year. That aint' chicken scratch. In fact, I think it funds
humanity´s expansion into the solar system quite handily.

> - A Falcon 9 launch is billed out at $67M. A Falcon 9 can carry up to 60 Starlink sats. That's ~667 launches to reach the stated goal of 40k sats in the constellation. So roughly $45B in just launch costs, if you assume the public launch price. (Because if they are launching their own stuff, they aren't launching an external paying customer.)

> - The reported price per sat is $250k.

There are multiple sat types, the mini v2 (which can only be flown on
the falcon 9, is rumored to cost about that much)

Starship had had a much larger, much more highly capable sat designed
for it, but it is running a few years behind schedule. The hope for
that was that launch costs would decline even further.

Also OPEX - running this network - is probably a substantial cost. I
have lost track of the number of downlink stations established (over
200 now) but I would guess those are about 1m per.

There is a really amazing site that looks at this stuff called starlink.sx.

>
> Assuming they give themselves a friendly internal discount, the orbital buildout cost are in the neighborhood of $30B for launches, and $10B for sats.

The present day capacity, even if they were to do no more launches, is
still underused. Roughly half the USA has no starlink service yet,
multiple countries have been slow to license, and nearly all of Africa
remains uncovered. Maritime and air are big sources of new business. I
try to stress it is where  people are but infrastructure isn´t is
where starlink really shines,

and that very little bandwidth is required for things like email and chat.

>
> - The satellite failure rate is stated to be ~ 3% annually. On a 40K cluster, that's 1200 a year.

Where did you see that? So far as I can tell, the failure rate,
exclusive of one launch lost to solar expansion, is trending towards
zero. Also, maneuvering thrust (documented somewhere) has been quite
under expectations, in terms of operating fuel they could use the
existing sats for far, far longer than the intended 5 year operational
lifetime, in this regard.

>
> That's about 20 more launches a year, and $300M for replacement sats. Let's round off and say that's $1B a year there.
>
>  So far, that's a $40B buildout with a $1B annual run rate. And that's just the orbital costs. We haven't even calculated the manufacturing costs of the receiver dishes, terrestrial network infra cost , opex from staff , R&D, etc .
>
> Numbers kinda speak for themselves here.
>
>> I mean, I get that Musk is sort of a cuckoo bird but say what you will he does have big ambitions.
>
>
> Ambition is good. But reality tends to win the day. As does math.
>
>
>
>
>
> On Sat, Jun 17, 2023 at 4:38 PM Michael Thomas <mike@mtcc.com> wrote:
>>
>>
>> On 6/17/23 1:25 PM, Tom Beecher wrote:
>>>
>>> Won't Starlink and other LEO configurations be that backstop sooner
>>> rather than later?
>>
>>
>> Unlikely. They will remain niche. The economics don't make sense for those services to completely replace terrestrial only service.

I agree they will not replace terrestrial service, but maritime,
roaming, airplanes, and rural are big enough markets.

>>
>> Why would they put up 40000 satellites if their ambition is only niche? I mean, I get that Musk is sort of a cuckoo bird but say what you will he does have big ambitions.
>>
>> From my standpoint, they don't have to completely replace the incumbents. I'd be perfectly happy just keeping them honest.
>>
>> As I mentioned elsewhere, I'm not sure that the current economics are the real economics. I'm pretty sure they've been purposefully throttling demand because they still don't have the capacity so it would make sense to overcharge in the mean time. Is there something inherent in their cpe that makes them much more expensive than, say, satellite tv dishes? I can see marginally more because of the LEO aspect, but isn't that mainly just software? It wouldn't surprise me that the main cost is the truck roll.
>>
>> Mike
>>
>>
>>
>> On Fri, Jun 16, 2023 at 4:17 PM Michael Thomas <mike@mtcc.com> wrote:
>>>
>>>
>>> On 6/16/23 1:09 PM, Mark Tinka wrote:
>>> >
>>> >
>>> > On 6/16/23 21:19, Josh Luthman wrote:
>>> >> Mark,
>>> >>
>>> >> In my world I constantly see people with 0 fixed internet options.
>>> >> Many of these locations do not even have mobile coverage.
>>> >> Competition is fine in town, but for millions of people in the US
>>> >> (and I'm going to assume it's worse or comparable in CA/MX) there is
>>> >> no service.
>>> >>
>>> >> As a company primarily delivering to residents, competition is not a
>>> >> focus for us and for the urban market it's tough to survive on a ~1/3
>>> >> take rate.
>>> >
>>> > I should have been clearer... the lack of competition in many markets
>>> > is not unique to North America. I'd say all of the world suffers that,
>>> > since there is only so much money and resources to go around.
>>> >
>>> > What I was trying to say is that should a town or village have the
>>> > opportunity to receive competition, where existing services are
>>> > capped, uncapping that via an alternative provider would be low
>>> > hanging fruit to gain local marketshare. Of course, the alternative
>>> > provider would need to show up first, but that's a whole other thread.
>>> >
>>> Won't Starlink and other LEO configurations be that backstop sooner
>>> rather than later? I don't know if they have caps as well, but even if
>>> they do they could compete with their caps.
>>>
>>> Mike
>>>


--
Podcast: https://www.linkedin.com/feed/update/urn:li:activity:7058793910227111937/
Dave Täht CSO, LibreQos