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I wonder if this is a signal that Musk is ready to spin off Starlink and IPO to raise the needed capital.
It's some form of typical Musk charlatanism, that's for sure.
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Oh, no, is this a Musk-worshipping ecosystem? RIP my karma points
The downvoting is because it's a low effort comment that is more about being snarky than attempting to provide an insightful comment.

Elon Musk has legitimate reasons for criticism; sarcastically dismissing him as a charlatan isn't a productive way of doing so.

In my defense, dismissing him as a charlatan and not engaging with his latest news is the most effective way to combat Musk-ism. People have taken him seriously long enough and in enough numbers to give him some air of legitimacy when none is deserved.

It's the same strategy with internet trolls; you either ignore them completely, or call them out on trolling and engage no further. Musk is, in some sense, the internet's largest troll. And droves of people have taken the bait.

I suggest you talk to the thousands of happy starlink customers on the r/starlink subreddit.
Capitalist scumbag leverages capital to create a useful service that some people find useful. Wow!

By that metric, <Walmart ; McDonalds ; Nestle ; Activision ; Eli Lilly ; choose your favorite corporation> are a great boon to humanity and we would be so lost without them!

> In my defense, dismissing him as a charlatan and not engaging with his latest news is the most effective way to combat Musk-ism.

Putting aside your unstated reasons why you believe Musk is a charlatan or the "Internet's largest troll", simply calling someone a charlatan will not convince people who think otherwise.

If I simply said "Biden is a charlatan", his supporters, or even those who had no opinion of him, would not simply begin to think of him as one. The same applies to if I said "Trump is a charlatan", so I am not sure what you're trying to achieve here.

You have to be willfully ignorant and a bootlicker to have a positive opinion of Musk or any of his ventures (and analogously, of Trump). Amusingly enough, it's two relatively different groups of people who worship the two guys.

Anyway, I'll let you get on with your circlejerk. I'm not going to sit here and compile a list of sources detailing all of the ways that Musk is garbage, those are easily available via searching for anyone actually still unaware and curious.

In some ways I can understand that as a strategy, but as a forum, HN has explicitly banned that type of response in lieu of more thoughtful dialogue.

Elon is actually a good example of why dialogue is important. You see him as a charlatan. I (with the context that I interned for SpaceX 7 years ago), see him as a flawed but impactful innovator who has pushed the state of tech forward considerably and employs 90,000 people though his two biggest companies.

Little is gained by sarcastically dismissing each others' perspectives. But by refusing to pretend that he is all bad or all good, and discussing his successes alongside his failures, we can lean into the purpose and value of HN.

Does StarLink make any financial sense of it is not vertically integrated with SpaceX?
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It could be "spun out" and integrated at the same time, like VMware was with EMC.
SpaceX just needs a customer with a requirement for many launches. Doesn't have to be vertically integrated.
Musk has made clear that his intention with Starlink is to fund his Mars dreams. The upside potential of Starlink is so enormous that selling now seems premature. Maybe, when Starlink is raking in billions a month and some large fraction of the potential market is actually on board Musk could cash in and concentrate on his real goals, but right now doesn't make sense to me.
Very recently he tweeted about this. He wrote that it will take a while until Starlink goes public - not until its finances are in order basically.
> Starlink would need a few million subscribers paying about $99 a month each to recoup a $5 billion investment in a year’s time

That doesn't seem like a lot, considering it is a global ISP.

Also, good that Elon's net worth is still pretty high (looks like 165B now) so he can possibly fund it himself for the most part

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It seems like a lot, when each Satellite seems to only support 20Gbps or 40Gbps.

So to support 100Mbit customers, you need to launch a Satellite once for every 40 customers. Each customer needs a $1000 to $3000 dish to connect to the Satellite (currently $500, so you need almost a year of $99 subscription before you make back the money from the dish alone, and then another few years to recoup the costs of the Satellite launches).

This at a time when 5G is beginning to be deployed in mass quantities... and Gbps fiber is available in cities. So cityfolk won't really use Starlink, and 5G will cover many rural areas.

Finally: ~~directional WiFi~~ (Woops: got my terms mixedup. Apparently its "Fixed Wireless") works surprisingly well out in rural areas for 50-mile ranges. So if you can get a line-of-sight radio out there, a small town ISP can still deploy over a relatively rural area.

EDIT: Directional Wifi is like 1 mile. I got my technologies confused.

Only the most rural of areas (over 50-miles away from the nearest potential directional WiFi spots, with no access to 5G or Fiber Optics) would use Starlink, which is... not where people live by definition. Can Musk find millions of rural folk and build an internet service with them?

You're assuming customers will be using all of their bandwidth 24/7, no ISP / telephone / utility company works like that.
And even then, his calculation is off by a factor of 5 or 10
> Only the most rural of areas would use Starlink.

I mean yes? Rural and underserved areas always been the target market of Starlink in the first place. Starlink isn't attempting to target the urban market.

> I mean yes? Rural and underserved areas always been the target market of Starlink in the first place. Starlink isn't attempting to target the urban market.

Are there millions of people in rural areas who will trust a US-based space ISP over local ISPs?

The thing about targeting rural areas, is that you're by definition targeting a small subset of people. People generally live in cities, on the average.

There are millions of people in current rural US with terrible terrible ISP options that would happily pay this. And that isn’t counting other countries. Australia alone is terribly underserved right now by all national ISP’s.

Even if you put in the TOS that the NSA is going to jerk off to all their stuff, most would probably be super happy to sign up if it meant sub-300ms pings and > 5mbps speeds.

https://www.census.gov/programs-surveys/geography/guidance/g...

Of the 300-million people in the USA, 250-million live in "Urban" areas.

https://www2.census.gov/geo/pdfs/reference/GARM/Ch12GARM.pdf

By definition: this is all towns of 50,000 and above. The next big group of people are in 5,000+ person towns, which are a good target for 5G and fixed wireless internet. I've got an uncle who lives in one of these areas ("rural" for sure, but with line-of-sight to the town center so wireless / line of sight still works and so do cell phones / internet)

I think you're grossly overestimating the number of people where Starlink's $500 upfront costs + $99 / month is competitive.

Furthermore: line-of-sight is not a problem for a lot of people. Huge swaths of the USA's rural areas are extremely flat (ex: Kansas, Iowa, etc. etc.). So Fixed Wireless is reliable for many miles.

So you’re agreeing there are millions unserved and in truly rural areas right? That’s all it takes, and all I was referencing.

Fixed wireless has been an option for a decade plus. When it works, it’s great. Almost everyone I know in rural areas has thought of it or tried it once. Trees, distance, sometimes a hill usually get in the way.

Hughes and others don’t have the subscriber numbers they do because they’re good services that people like using over alternatives.

Don’t forget there are a lot of people that would love to live in a rural area that haven’t because of lack of a decent connection. If starlink keeps on this trajectory, a lot of folks will be moving who never could before.

The purpose of my comment wasn't to discuss the efficacy of Starlink's strategy on targeting rural / underserved areas. Only to point out that was indeed their strategy. Which I think was important to highlight given your criticism of Starlink being uncompetitive in urban markets.
My point about Urban markets is that 80% of the US's population is in an urban area in the 2010 census.

Which means that Starlink immediately disqualifies itself from 80% of the US population. The remaining 20% seem to be largely covered by direct line-of-sight wireless technology.

Not the most rural, remember that also this is unlimited data while most carriers still shy away from "truly" unlimited data plans.

Yes 5g, more bandwidth etc so plans may become more liberal but still.

WISP for rural areas are hard to manage, not just the engineering but the marketing and customer retention, now I feel (really believe/know) is not the time to even begin to be a rural WISP where starlink and telecoms are on technological breakthroughs to literally deicentivize using you.

I think you're assuming the satellites aren't oversubscribed? Generally consumer ISPs are marketed well in excess of what all customers could actually use simultaneously. The economics change somewhat if you can put 400-4000 customers on the average satellite instead of 40.
The math is more complicated than that. Oversubscription reduces the number of satellites needed while oceans increase it.
While that's true, my Physics teacher always said that a crappy calculation that's within-an-order of magnitude is always better than gut-feeling.

If we're talking about feasibility and/or if something is a good idea, then once all the math is added up, then we need to see that the final costs are "really really good".

EDIT: As long as we're clear on each other's math / assumptions, we can make "napkin level" estimates to guess at the feasibility of this project.

> So to support 100Mbit customers, you need to launch a Satellite once for every 40 customers.

No, you don't. Oversubscription is a thing, a rather obvious thing when you go looking for it (evening Netflix time is horrible bandwidth on any ISP lately, including my Starlink connection), and you could comfortably handle hundreds (or low thousands) of customers at once on a single 40Gbit bird.

No, not everyone will be able to pull their max speed at the same time, but that's just not a use case you design an ISP for. Assume 20Mbit or so in the evenings for Netflix or Prime or whatever on most of your customers, then let the rest of the bandwidth shuffle around as needed.

Oversubscription proved to be a problematic thing early in 2020, because of everyone working from home. This will ease up, but the old oversubscription numbers won’t work anymore as people have permanently changed some of their habits.

And the bandwidth required by any given household will only really go up in the future.

Your math is off by an order of magnitude. 40Gbps/100Mbps=400.

It should also be able to handle at least 4000 customers (10x) through oversubscrpition.

There can be a lot of arguments against starlink as envisioned but the reasons you gave don't seem to hold up.

> cityfolk won't really use Starlink

I don't think starlink was ever meant to replace current high speed internet.

> 5G will cover many rural areas

5G means many different things. The high speed bands don't have enough range to make them economical to build in rural areas from what I've read.

> directional WiFi (Fixed Wireless) works surprisingly well out in rural areas for 50-mile ranges

Yes, if it's directional, and the directionality is pretty narrow if you want to get any reasonable performance. I don't think it's feasible for each town to have a dedicated antenna for each house within a 50 mile radius.

> Yes, if it's directional, and the directionality is pretty narrow if you want to get any reasonable performance. I don't think it's feasible for each town to have a dedicated antenna for each house within a 50 mile radius.

You're asking the wrong questions.

So lets say Starlink is 4000-customers per satellite (10x oversubscription of a 40Gbps underlying, 100Mbit per customer, seem fair to you?). It costs $1000 to $3000 for the Starlink Satellite dish right now.

The total costs of Starlink, per customer, is therefore 1/400th of a satellite launch + $1500 or so (depending on how cheaply the dish can get).

Can you run an antenna from a town center to a house 50-miles away for less than $1500 + SatelliteLaunch/4000 ??

EDIT: 4000, not 400.

I admit that I don't know how much a Satellite Launch costs, but Elon Musk is asking $30 Billion for a reason. I assume the satellite launches are a good chunk of those costs.

A dedicated point-to-point link costs $300 or less which is even cheaper than Starlink.
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All that wealth is tied up in his shares in his companies, he doesn’t have much in the way of liquidity to fund anything and I don’t see him selling large chunks of these companies any time soon. Occasional judicious funding rounds, sure, but that’s not really him funding anything.
Edit: I stand corrected, my math (below) is off by 10, I would delete this comment if I could, otherwise kindly ignore this comment.

They need 10 million customers paying that to generate $1B in revenues - that doesn't include all of the other costs involved.

Assuming even good margins, they'd need 10's of millions of customers to get to $1B in earnings in a year.

And that's with rosy numbers around margins.

I don't think it adds up very well and this will only work as long as the 'hyperbubble valuation' period of lofty expecations and very low interest rates continue.

If there is a market correction, esp. due to higher interest rates ... then it won't look good. But until then, it could work.

That's $99 per month, not per year. 10 million customers would be $12B revenue a year.
10 million customers is $12B revenue a year.
Its all fun and games until they all want to watch Netflix at 8 pm. Then the individual throughput might go into shit prompting people to cancel cuz they cant even watch Netflix.

For 99 a month i dont think I would get it unless there was no other option.

Ok, I think a few points of clarification are needed since this article's choice of quotes and framing is strange.

1) The title implies outside funding is needed, but this isn't true. SpaceX estimates it will require $5-10B of internal funding to reach its targets. This should surprise no one considering the scope of what they are building.

2) "Starlink would need a few million subscribers paying about $99 a month each to recoup a $5 billion investment in a year’s time, said analyst Tim Farrar, president of TMF Associates." Except that there's no explanation of why they need to recoup investment costs in a single year. You don't build a factory and then expect the capital expenditure to be recouped in the first year of ops, so why would a satellite network be different...

3) “It is not implausible to get this number (a few million) to make the system not to go bankrupt. But this is not enough to justify the valuation of SpaceX,” except that SpaceX isn't a satellite internet company, it's a space launch company that is also building a satellite internet network. Its valuation is based on being far and away the launch leader on every metric that matters.

Yeah, I don't see any issue with Starlink getting subscribers. HughesNet has 1.3 million subscribers in the US and Canada alone. ViaSat has 600,000. There are 10x that on slow rural DSL. And that's just North America.

Demand is not going to be the problem for Starlink. If they can roll-out a service just a bit more reliable than their current beta, and they can increase their network capacity fast enough, they will have tens of millions of subscribers in a few years.

HughesNet only has a billion in revenue though. With a $30 billion + investment in the network, Starlink needs to have far far more subscribes than that to be able to recoup the costs.
Fortunately Starlink is global so the addressable market is more like 100M customers.
100 million customers with money? Once you start saying that the customer base is rural Africa or something like that, you need to massively lower your ASP expectations.
The global middle class is over 1B people; if 10% of them are rural that's over 100M.
That group is defined as people who make $10-20 a day. Starlink isn't selling at $100 to people who only make $4,000 a year
Arguably both the amount they make and the number of people is increasing. Plus Internet access may be a push for people to stay or move to a more rural location.
I would gladly pay more for Starlink JUST to spite Comcast.
Starlink isn't a replacement for Comcast if you care about latency, but it is for rural dialup and satellite Internet. And probably a whole host of new usages, such as sensors deployed to the field, etc.

edit: Okay, so folks don't like my fairly honest take on Starlink? It's a great service that's going to make a ton of money. But it doesn't replace all classes of Internet use. That's unrealistic.

It can absolutely replace comcast. I dont understand why you'd think otherwise?
Starlink can replace Comcast... for a few customers. Starlink will become congested if too many people switch.
(Bandwidth of an individual satellite) x (the number of satellites they will have when they get the full constellation up) puts a cap on how many customers Starlink can handle and still deliver the specified performance. That cap is way lower than the number of Comcast subscribers.
I think that depends on how oversubscribed Comcast is. My local cable co only allows 1TB/month of data because of how oversubscribed they are. Even with that limit, speeds still drops a ton during peak use.
Each starlink sat can handle 25 gbit/s each way. Each starlink sat covers an area about the size of a city. You do the math.
I'm getting about 100 million subscribers with the current fleet (1700 satellites) if they oversubscribe and limit subscribers to 1tb/month like my local cable co.
It could be a replacement for cable in some areas.
It actually might be better than cable in many situations. Cable upload can be terrible, and where I live, cable actually goes down when it rains which makes it no more weather resistant than a satellite Internet solution like Starlink would be.

There is that whole thing about highly dense regions not having as much Starlink bandwidth per capita, tho.

I've been to plenty of small rural towns where cable TV and internet existed, was better than DSL, but worse than what Starlink will be offering. Their population density is low enough that Starlink could provide service to most if not all the residents.
I wonder if it has something to do with the life span of the satellites. Most big investments like this last decades, while the satellites are looking at 5 years. It's the downside for the upsides of low latency and not making a mess in space. They'll need a steady stream of launches to keep the network viable, and they'll need to do that until they have enough subscribers to cover the costs.
I've got it on order. But I may ultimately decide to stick with wired Internet anyway. What I really want is for Starlink to open up for mobile use. When that happens, I may reverse my camping style and instead of going out on the weekends and coming home during the week, I may come visit home on the weekends and stay in the wilderness to work remotely :)
What's wrong with your wired internet that you're considering Starlink?

It's better than rural WISPs by far... most of the time... but even compared to DSL it loses out on things like consistent latency and packet loss.

Yes, you do see the 300+Mbit spikes, but it's realistically closer to 50Mbit average - which, again, for rural areas, is really quite good.

I have it, I mostly like it, but it's still my backup/bulk transfer connection, and I keep a rural WISP for my primary work connection because it's less prone to the random glitches and hiccups that Starlink suffers, and because I have a public IP instead of CGNAT, my VPN devices and SSH connections all seem to recover a lot more reasonably from packet loss on that link than on Starlink.

For mobile use (RVs and such), absolutely, it makes a lot of sense (if you can handle the power use). But I didn't think cell roaming was enabled yet - maybe I missed something.

> What's wrong with your wired internet that you're considering Starlink?

One problem is that wired service relies on commercial power. When you have 100+ miles of unmanaged tree growth between you and your power company you lose power a lot. 'Lot' is several times a year for anything from a few minutes to a few days.

Everyone that lives as I do has some degree of backup power. Internet service that can run on such backup power is rather appealing.

> What's wrong with your wired internet that you're considering Starlink?

We had a one week Internet outage earlier this year and there was not a single peep from Comcast. They couldn't say whether they were even working on it, or give any ETA on having it up again. I understand outages, especially related to weather, but the utter lack of any kind of communication infuriates me.

I rely on Internet to get my work done, so I wanted an alternative. Ideally I'd keep both. But that would be a moderately expensive luxury to avoid an occasional outage.

I'm definitely more interested in the mobile possibilities, the farther I get from the outage earlier this year and my anger recedes :)

I agree. I have no need at for Starlink unless it's mobile. I would probably pay $150-200 a month for decent mobile remote internet.
> investment costs before Starlink achieves fully positive cash flow would be $5-$10 billion.

This does not seem too bad, considering that majority of that cash will be raised once most technical risks are addressed.

How much would HFT firms pay for lower latency between world stock exchanges? I think that could be a significant source of income.
They lay their own fiber lines. They don't want space internet.
Starlink may be faster than fiber from NY to London.
People's whole model of satellite internet is anchored to the limitations of what came before with satellites tens of thousands of miles up. They need to recalibrate their thinking for satellites that might be closer than the nearest fiber repeater on their wired ISP's backbone provider.
The speed of light in a vacuum is 50% faster than the speed of light in optical fiber.
Cringely speculates that Starlink is getting funding from the FCC's rural broadband fund - which currently has $16bn available. Starlink is bidding on broadband auctions that the traditional ISPs won't because it'd be unprofitable for them to run cable/fiber to the residences. Which isn't a problem for a satellite operator like Starlink.

https://www.cringely.com/2021/04/20/starlink-is-a-global-isp...

I think other telcos subcontracting their bids to SpaceX is highly unlikely. Especially since their aren't really any penalties for not completing all the build-out they bid on. So the non-speculative part is that SpaceX was awarded $885M, which is a good chunk of money, but a small fraction of the $30B they will need.
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