By 2025, SpaceX could be earning $22 billion a year.
For the better part of a decade, the world has waited for SpaceX to deliver on its promise to provide high-speed internet from space. The wait is finally over.
Broadband satellite internet is here … or will be before the year is out.
Over time, SpaceX intends to launch at least 12,000 — and possibly as many as 42,000 — “Starlink” internet satellites. Granted, this is a long-term, stretch goal, and it will take years to orbit all of the (tens of) thousands of satellites envisioned. But Elon Musk says Starlink will be able to begin delivering at least “moderate” internet coverage to many locations on Earth once SpaceX has gotten 800 satellites into orbit.
How close is SpaceX to that goal?
On Monday evening, January 6, SpaceX successfully launched its second “official” Starlink mission, carrying 60 satellites into orbit aboard a Falcon 9 rocket. In addition to the 115 operational satellites put into orbit on previous launches, this gives the company about 175 operational internet satellites in orbit today.
Assuming SpaceX continues putting satellites in orbit at a rate of 60 satellites per launch (and doesn’t attempt to accelerate deployment by using bigger Falcon Heavy or Starship rockets), 11 more Falcon 9-Starlink missions should suffice to surpass the 800-sat threshold for “moderate” internet coverage. At a planned launch rate of two Falcon 9 launches per month, therefore, Starlink should reach this goal by the end of June 2020. By the end of the year, Starlinks in orbit should reach 1,500.
Incidentally, at that point, about 40% of all operational satellites (launched by anybody, anywhere, ever) in orbit will be SpaceX Starlink satellites — a pretty amazing statistic.
A busy year for SpaceX
And here’s another stat for you: Because of Starlink, 2020 promises to be SpaceX’s most prolific year yet for rocket launches.
2019, you see, was actually kind of a slow year for SpaceX. The 13 rocket launches the space company conducted were its fewest since 2016, the year when an anomalous on-ground test-firing destroyed a SpaceX Falcon 9, requiring an investigation of the rocket’s construction and putting an abrupt end to launches for the year.
Racing to catch up on overdue launches propelled SpaceX to set new records: 18 rockets launched in 2017, and then 21 launches in 2018. But faced with a slump in demand for large satellite launches, and having worked through its backlog, 2019 became a down year for SpaceX.
That demand for large government and commercial space launches hasn’t subsided in 2020, with only about a dozen customer-sourced launches planned this year. Nevertheless, NASASpaceflight.com reports that this year could see SpaceX smash all previous records by launching perhaps three dozen times — two dozen of which will be launches of its own Starlink satellites.
What it means to SpaceX
Launching so often, SpaceX is creating the kind of business “scale” that rivals United Launch Alliance, Roscosmos, and Arianespace can only dream of. This allows SpaceX to amortize its fixed manufacturing, labor, and overhead costs over a huge number of launches, driving down the average cost of each individual launch for both itself and its customers.
In turn, this should give SpaceX an advantage when bidding for government launch contracts (and astronaut missions) and advertising its services to commercial customers. SpaceX should enjoy cost advantages, too, in deploying its Starlink satellite network, helping it compete with rival satellite networks planned by OneWeb, Amazon (NASDAQ:AMZN), and Telesat. None of these worthies, after all, owns its own rocket with which to put satellites in orbit (although Amazon’s CEO, Jeff Bezos, is working on building an orbital rocket at his space company, Blue Origin). In racing SpaceX to orbit, therefore, they’re going to have to choose between paying higher prices to fly with another launch provider and subsidizing their competitor by buying flights from SpaceX.
Of course, the most important advantage SpaceX should get from its rapid rate of rocket launches this year is also the most obvious: less time to market.
A more rapid launch pace means faster deployment of SpaceX’s Starlink satellites to orbit. That means the company can begin reaping the 60% operating profit margin that SpaceX expects to earn from providing broadband internet service from space sooner. By 2025, internal SpaceX documents show the company hoping to earn as much as $22 billion in annual operating profit — most of it from selling satellite internet service.
And 2020 is the year it all starts to happen.
Author: Rich Smith