Connect with us

Company News

SpaceX’s future depends on a gigantic rocket and 42,000 internet satellites

SpaceX wants to use its Starship rocket for the kind of voyages to Mars and beyond that Elon Musk has long dreamed of pursuing.

Starship also forms an important foundation of the future business strategy at his space company, which wants to use the vehicle in part to build out Starlink, the satellite-internet service many investors believe could eventually form the bulk of the company’s revenue.

Space Exploration Technologies Corp., the formal name for the company Mr. Musk founded almost two decades ago, faces steep challenges in engineering Starship into a reusable rocket that would sharply drive down launch costs. Mr. Musk recently said the ship takes up more of his time than any other single initiative, and warned the vehicle, along with the internet service, are creating significant challenges for the company.

“Starship is a hard, hard, hard, hard project,” he said at a December event hosted by The Wall Street Journal. “This is the biggest rocket ever made.”

Starship, which would be blasted to orbit on a booster dubbed Super Heavy, stands 160 feet tall and has a diameter of 30 feet, creating room to send hundreds of Starlink satellites to orbit at once, more than the several dozen it is able to deploy right now on one of its Falcon 9 rockets. More than half of the launches tracked by U.S. flight-safety regulators that the company has conducted the past two years have been Starlink deployments.

The company plans to rapidly boost the pace of satellite launches in the years ahead. SpaceX, in a July presentation to the Federal Communications Commission, said it had so far omg launched around 1,800 Starlink satellites and was active in more than 20 countries. The FCC has authorized SpaceX to launch around 12,000 satellites, but the company wants to add at least around 30,000 more, according to commission filings.

Mr. Musk said at an industry conference this summer that SpaceX is likely to invest at least $5 billion and perhaps as much as $10 billion in Starlink before it fully starts generating cash, with ongoing investments after that.

In a November tweet, Mr. Musk said if severe global recession cut into the availability of capital and liquidity while SpaceX was losing billions on Starship and Starlink, then bankruptcy “while still unlikely, is not impossible.”

Over the past two years, the company began equity sales that raised at least $3.8 billion, according to filings that some private companies like SpaceX may have to disclose under Securities and Exchange Commission rules. SpaceX doesn’t release financial statements.

A spokesman for the company pointed to a recent statement posted to SpaceX’s website that said in part the company’s year ahead would include a potential first orbital mission for Starship and expanding Starlink.

Mr. Musk unveiled Starlink in 2015, aiming to develop a network of smaller satellites in a low orbit around Earth that could provide high-speed internet access around the world. SpaceX set out aggressive targets for Starlink, projecting that year more than 40 million subscribers by 2025, The Wall Street Journal previously reported.

SpaceX said this summer that it had around 140,000 Starlink customers. Starlink lists costs for the service at $99 a month, with a $499 charge for an internet terminal—or roughly half the amount it costs the company to make it, Mr. Musk said over the summer.

Other companies, such as London-based OneWeb, are also creating networks of internet satellites, and an Inc. unit plans to do so in the future. Around 3.7 billion people globally remain unconnected to the internet, according to a recent report from two agencies at the United Nations, while U.S. officials have worked for years to improve access to high-speed internet in underserved areas.

“There’s a need for connectivity in places that don’t have it right now,” or where connections are very limited or expensive, Mr. Musk said this summer. In addition to consumers, Mr. Musk has indicated Starlink could offer services to other businesses, recently saying in a tweet that fliers should ask airlines for Starlink.

The internet service creates a source of demand for Starship, said Matt Weinzierl, a Harvard Business School professor who has studied the space economy.

Historically, those behind big rockets without a clear use for them have faced challenges: “If we don’t know why we built them, it can be a real losing proposition,” Mr. Weinzierl said, adding he thinks the company will identify other uses for the rocket.

Starship, meanwhile, has at least one confirmed customer in place: the National Aeronautics and Space Administration, which in April awarded SpaceX a $2.9 billion contract to develop a Starship to take astronauts back to the surface of the moon.

As it works to develop Starship and Starlink, SpaceX has built out a business based on government customers such as NASA and on commercial-satellite operators.

The value of its contracts with public-sector clients amounted to $2.2 billion for the federal government’s 2021 fiscal year, up from $195 million a decade earlier, according to a contracts database. SpaceX typically charges private clients $60 million to $65 million for Falcon 9 launches, according to people familiar with the matter.

The company’s valuation has soared as it proved its spacecraft like Falcon 9 could work as intended and as it started constructing its fleet of Starlink satellites. SpaceX was valued at $100 billion in October, more than double its valuation in the summer of 2020, according to PitchBook. The latest figure rests heavily on prospects for Starlink because the potential demand for the high-speed internet service globally is much larger than the size of the launch market, investors say.

Tim Farrar, a satellite-industry consultant, said in most places around the world, internet customers either can’t afford what Starlink charges or are well-served by existing broadband providers. The U.S. is the best market globally for customers that could afford around $100 a month for service and have a relatively poor broadband offering, according to Mr. Farrar.

“To get the capacity to serve millions of people in the U.S., they’re going to need to launch tens of thousands of satellites, and the only way to do that at low enough cost is to have Starship,” he said. “On the other hand, it doesn’t necessarily mean that the market will be there.” The Wall Street Journal

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Copyright © 2023.Broadcast and Cablesat

error: Content is protected !!