SpaceX priced Starlink satellite internet service at $99 P/M

Called the “Better Than Nothing Beta” test, according to multiple screenshots of the email seen by CNBC, the initial Starlink service is priced at $99 a month — plus a $499 upfront cost to order the Starlink Kit. That kit includes a user terminal to connect to the satellites, a mounting tripod, and a Wi-Fi router. There is also now a Starlink app listed by SpaceX on the Google Play and Apple iOS app stores.

“As you can tell from the title, we are trying to lower your initial expectations,” the emails said, signed “Starlink Team.” “Expect to see data speeds vary from 50Mb/s to 150Mb/s and latency from 20ms to 40ms over the next several months as we enhance the Starlink system. There will also be brief periods of no connectivity at all.”

The emails, sent to an unspecified number of users, marks the launch of SpaceX’s public beta test of the emerging internet service. For the last few months, SpaceX has conducted a limited private beta test with employees — which the company has said showed strong results in both latency and download speeds, key measures for an internet service provider.

Those who received the emails would have filled out a form on the Starlink website, which asked for potential subscribers’ contact information and location. Elon Musk’s company posted that form in June and, less than two months later, SpaceX said that “nearly 700,000 individuals” across the United States had indicated interest in the service.

Starlink is SpaceX’s plan to build an interconnected internet network with thousands of satellites, designed to deliver high-speed internet to anywhere on the planet. The network is an ambitious endeavor, which SpaceX has said will cost about $10 billion or more to build. But the company’s leadership estimates that Starlink could bring in as much as $30 billion a year, or more than 10 times the annual revenue of its rocket business.

A Falcon rocket launches a Starlink mission in October 2020.
A Falcon rocket launches a Starlink mission in October 2020.

To date, SpaceX has launched nearly 900 Starlink satellites — a fraction of the total needed for global coverage but enough to begin providing service in some areas, including in the northwest United States. The company has begun to work with a handful of organizations in rural regions that Starlink satellites in orbit currently cover, such as Washington state.

“Under Starlink’s Better Than Nothing Beta program, initial service is targeted for the U.S. and Canada in 2020, rapidly expanding to near-global coverage of the populated world by 2021,” SpaceX said in the description of its Starlink mobile app.

SpaceX earlier this month announced a partnership with Microsoft to connect the tech giant’s Azure cloud computing network to the Starlink network. SpaceX and Microsoft in recent months have been testing the software needed to connect Starlink and Azure. The partnership is especially key to Microsoft’s new mobile data centers, which the company said are designed “for customers who need cloud computing capabilities in hybrid or challenging environments, including remote areas.”

SpaceX does not plan to add ‘tiered pricing’ for Starlink satellite internet service

SpaceX president Gwynne Shotwell does not think the company will add “tiered pricing” for its direct-to-consumer Starlink satellite internet service, which is currently offered at $99 a month in limited early access.

“I don’t think we’re going to do tiered pricing to consumers. We’re going to try to keep it as simple as possible and transparent as possible, so right now there are no plans to tier for consumers,” Shotwell said, speaking at the Satellite 2021 “LEO Digital Forum” on a virtual panel on Tuesday.

In a tiered pricing system, what the customer pays is based on the level of service he or she chooses.

Starlink is the company’s capital-intensive project to build an interconnected internet network with thousands of satellites, known in the space industry as a constellation, designed to deliver high-speed internet to consumers anywhere on the planet.

A Starlink user terminal installed on the roof of a building in Canada.
A Starlink user terminal installed on the roof of a building in Canada.

The company has launched more than 1,200 satellites to orbit so far.

In October, SpaceX began rolling out early Starlink service in a public beta that now extends to customers in the U.S., Canada, the U.K., Germany, and New Zealand – with service priced at $99 a month in the U.S., in addition to an upfront cost for the equipment needed to connect to the satellites.

Elon Musk’s company has continued to expand Starlink’s service, with the public beta gaining more than 10,000 users in its first three months. Shotwell noted that SpaceX does not “have a timeframe for getting out of the beta phase,” saying that the company still has “a lot of work to do to make the network reliable.”

Musk’s company plans to expand Starlink beyond homes, asking the Federal Communications Commission to widen its connectivity authorization to “moving vehicles,” so the service could be used with everything from aircraft to ships to large trucks.

For now, SpaceX is focused on serving customers in rural and hard-to-reach areas, with Shotwell saying that Starlink “will be able to serve every rural household in the United States,” or “roughly 60 million people.”

While SpaceX is adding service to other countries, Shotwell said the company is focused initially on the U.S. “because they speak English and they’re close and, if they have a problem with their dish, we can get one shipped out quickly.”

“But we definitely want to expand this capability beyond the U.S. and Canada,” Shotwell added.

SpaceX absorbing bulk of Starlink equipment cost

Boxes containing Starlink kits, with user terminals and Wi-Fi routers.
Boxes containing Starlink kits, with user terminals and Wi-Fi routers.

One major obstacle for Starlink, as well as any satellite-based broadband service, is the cost of the user terminals: The equipment on the ground that connects customers to the network.

Shotwell said SpaceX has “made great progress on reducing the cost” of the Starlink user terminal, which originally were about $3,000 each. She said the terminals now cost less than $1,500, and SpaceX “just rolled out a new version that saved about $200 off the cost.”

That means SpaceX is absorbing about two-thirds of the cost of the terminals, as the company is charging beta customers $499 upfront for a user terminal.

Musk said earlier this year that Starlink “needs to pass through a deep chasm of negative cash flow,” a significant portion of which is expected to be due to the cost of the user terminals.

While SpaceX is not charging customers for the full price of the terminals so far, Shotwell said the company expects the cost to come down to “the few hundred dollar range within the next year or two.”

Starlink ‘complementary’ to existing broadband service

Shotwell again emphasized previous comments by SpaceX leadership that Starlink is not looking to replace the service of “giant providers AT&TComcast, etc.,” as she noted its satellite internet is “very complementary to the services that they provide.”

“The Starlink system is best suited to highly distributed rural or semi-rural populations,” Shotwell said.

In the meantime, Shotwell said SpaceX’s challenge is learning how to scale for consumer customers while “making sure we can build a reliable network.” But, she added, none of these are challenges “which we can’t solve.”

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