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STARLINK’S RAPID RISE

Photo by Forest Katsch on Unsplash

SpaceX, an American aerospace company established in 2002 by entrepreneur Elon Musk, has been a pivotal force in the commercial spaceflight era.

Based in Hawthorne, California, SpaceX was founded to transform the aerospace industry and make cost-effective spaceflight achievable.

With a valuation of about $150 billion, SpaceX is one of the world’s most valuable private companies. Some think its value could hit nearly $250 billion by 2030, possibly even sooner.

 

It became famous for being the first private company to launch and retrieve a spacecraft from Earth orbit and to send a crewed spacecraft to dock with the International Space Station (ISS).

But the satellites that SpaceX’s rockets deploy into space are equally important.

Starlink is SpaceX’s solution for delivering high-speed internet globally. It utilizes a constellation of thousands of satellites in a low Earth orbit around 340 miles above the Earth’s surface.

Starlink has emerged as a blossoming division within SpaceX, playing a key role in the company’s overarching ambitions to make humanity multi-planetary and to explore celestial bodies such as the Moon and Mars.

 

Skyfi

In 2022, SpaceX is said to have earned $1.4 billion from Starlink. Euroconsult projects that, in a best-case scenario, by the end of 2023, Starlink’s operations could account for over 40% of SpaceX’s total business and generate more than $3 billion in revenue.

SpaceX deployed its initial group of Starlink satellites in 2019, and since that launch, the service’s usage has skyrocketed. Starlink boasts over 2 million active users and offers services across all seven continents.

That includes the most remote parts of the world, which otherwise wouldn’t have access to the internet.

Initially targeting individual consumers, the company has expanded into serving enterprises, including governments, military organizations, maritime shipping companies, telecom firms, airlines, and cruise line operators.

SpaceX recently revealed plans to provide satellite cellular connectivity to standard smartphones through collaborations with international telecom companies, such as T-Mobile in the U.S.

Telecoms utilizing Starlink’s service can offer their customers a space-based network connection anytime. This service will extend coverage to rural areas, including highways and national parks.

It’s smart, given that experts have valued the 2022 global market for consumer satellite services, encompassing TV, radio, and broadband internet, at over $92 billion.

With approximately 5,000 active satellites in orbit, Starlink’s satellites make up most of the world’s active ones.

Musk aims to boost that number, striving for around 42,000 satellites in orbit in the upcoming years, which is about a tenfold increase.

 

In deep water

The service has been praised for its role in areas affected by natural disasters and, more recently, during times of war.

Ukraine, under Russian invasion for nearly two years, has recently relied on Starlink services in military and civilian communication, providing access to high-speed network services nationwide.

Starlink has demonstrated its resilience and agility in challenging environments, particularly its ability to provide service. It has also showcased its quick response capabilities.

A key advantage of Starlink’s expansion is its self-reliance and lack of dependence on external suppliers. The company conducts its research, manufactures its satellites, and handles its launches as a vertically integrated entity.

This self-sufficiency allows it to operate autonomously, creating and managing its service.

 

Projections

While Starlink probably won’t face any serious competition anytime soon, it has faced some challenges.

Some argue that it may be challenging for Starlink to maintain its rapid growth. Firstly, there’s a saturation point in demand: companies, governments, and users who urgently needed to switch to Starlink have likely already done so.

Additionally, there’s evidence that Starlink needs to stimulate market demand through promotions. It has tried to do this by reducing baseline equipment costs from around $600 in the U.S. to just $150 in countries like Canada, Australia, and Japan.

Starlink also faced criticism from the astronomical community, which expressed concern that launches of thousands of Starlink satellites could interfere with optical and radio astronomical observations.

Photo by Alex Eckermann on Unsplash

First, services like Starlink or Twitter could be used to influence geopolitics, potentially causing new international political challenges.

This became evident when, after initially showing strong support for providing Starlink services to Ukraine, Elon Musk unexpectedly suggested that he might discontinue offering these services to the war-stricken country.

Second, many governments, including the U.S., heavily depend on services like Starlink, leading to questions about the national security implications of relying so much on a company run by one person.

Nevertheless, there’s a widespread belief that Starlink’s achievements are closely tied to SpaceX’s other significant ventures, such as the Starship project.

Despite experiencing delays, SpaceX wants to utilize this massive, next-generation reusable rocket for transporting cargo, people, and additional satellites. For SpaceX to fully leverage this project’s financial potential, Starship must start flying as soon as possible.

 

Dive deeper

To learn more about Starlink’s service projections, watch this video by CNBC.

See you next time!

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