Why the Starlink satellite system faces enormous difficulties
Wednesday, October 20, 2021 | Chimniii Desk
Key Points
Starlink is a type of megaconstellation – a network of low-earth orbiting satellites. The cost to consumers – While it is advertised as a free service, the initial setup and monthly subscription fees are too expensive for many residents of the communities Starlink is supposed to serve — as I previously stated, $99 per month is prohibitively expensive for many. Starlink has already reduced the terminal's cost by more than half from its initial cost of $3,000. Subscribers – Given the high – and continuous – cost of launch, Starlink's goal is to reach at least 5% of worldwide internet users – or tens of millions of people; but, at the current pricing point, it is neither affordable or cost-effective for the majority of users. The contest – Of course, Starlink is not alone in the online space race.
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While this bright new era speaks well for connection, it appears as though there are roadblocks on the way to bringing the satellites into orbit.
Starlink is a type of megaconstellation – a network of low-earth orbiting satellites. The ultimate goal of this remarkable breakthrough is to provide affordable internet connectivity to everyone on the earth, particularly in rural and distant locations where traditional connections are unavailable.
You might even argue that this is the first time the globe has actually built something that is accessible to everyone - which, in my opinion, is incredibly praiseworthy.
And the'mega' component of the name is unquestionably well-chosen. Starlink will initially consist of over 12,000 satellites, with papers submitted with an international authority for a further 30,000 satellites. The company anticipates attracting 500,000 users by mid-2022.
While Elon Musk, the tycoon behind Tesla and SpaceX, is the brains behind Starlink, there are a slew of other companies seeking to provide internet from space as well.
While this bright new era speaks well for connection, it appears as though there are roadblocks on the way to bringing the satellites into orbit. "SpaceX must overcome a profound chasm of negative cash flow...in order to make Starlink commercially viable," Musk tweeted. "Throughout history, every new satellite constellation has gone bankrupt. We intend to be the first to accomplish so."
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As a result of my investigation, I've made the following observations:
The cost — Earlier this year, the business estimated that maintaining Starlink in orbit would cost $30 billion, after conceding that investment costs prior to achieving entirely positive cash flow would be between $5 and $10 billion.
This apparently unfathomable sum, in addition to years of research, development, and production, must be recouped by service subscribers. Starlink would require several million users paying approximately $99 per month to repay a $5 billion investment within a year, according to analyst Tim Farrar, head of TMF Associates.
Early adopters are always scarce in my experience, much more so when the current costs of Starlink's services are expensive (despite if Starlink absorbs around two-thirds of the cost to consumers) for many of those in locations (such as emerging economies) that Starlink is designed to serve.
Starlink is the brainchild of Elon Musk.
The weather — In the past, weather has been a source of contention for satellite-based services, and Starlink is no exception. Early users in the United States claim device failure and lags due to overheating in hot weather. Furthermore, heatwaves are becoming increasingly prevalent.
Subscribers participating in the beta testing have reported intermittent connectivity due to the weather, with internet jokes about cooling the equipment with a garden hose.
The cost to consumers – While it is advertised as a free service, the initial setup and monthly subscription fees are too expensive for many residents of the communities Starlink is supposed to serve — as I previously stated, $99 per month is prohibitively expensive for many.
When terminal and installation expenses are included, the service is currently only appealing to those who can afford it. While some in isolated, rural areas of the world may be able to afford such a subscription cost, they will undoubtedly be few and far between.
According to the firm, the most significant problem is lowering the terminal's operating costs (the equipment that provides the link between the satellites and the service user). Starlink has already reduced the terminal's cost by more than half from its initial cost of $3,000. Gwynne Shotwell, president of SpaceX, anticipates it will be available for a few hundred dollars within the next year or two.
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Starlink would require several million customers paying approximately $99 per month to recover a $5 billion investment within a year.
Subscribers – Given the high – and continuous – cost of launch, Starlink's goal is to reach at least 5% of worldwide internet users – or tens of millions of people; but, at the current pricing point, it is neither affordable or cost-effective for the majority of users.
To make it function, there must be demand — and that demand must be met by more powerful, updated satellites in order to prevent the vexing outages I mentioned above.
Apparently, there will be government subsidies, as almost $900 million in Federal Communications Commission funding will be made available to Starlink to assist in its objective of bringing internet to rural areas.
The contest – Of course, Starlink is not alone in the online space race. Competition will always result in casualties. According to Reuters, Amazon subsidiary Kuiper has a $10 billion direct competitor, while OneWeb - a bankrupt satellite operator rescued by the British government and India's Bharti Group - has pledged to compete as well, citing funding of more than $2.4 billion.
Starlink, of course, benefits from having its own infrastructure - Musk's sister business, SpaceX, provides the launch technology, while Starlink manufactures its own satellites, terminals, and communication chips.
Despite these roadblocks, I view Starlink as a ray of optimism for all of our technological futures. Keep an eye on this space!
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