Shortly: For most companies, generating $1.4 billion in revenue in a year would be an impressive feat, but for Starlink it’s $11 billion less than originally forecast. The satellite service also ended 2022 with one million users, 19 million fewer than forecast.
The Wall Street Journal writes that Elon Musk gave a presentation in 2015 in which he predicted that SpaceX’s Starlink division would generate nearly $12 billion in revenue and $7 billion in operating profit in 2022. It was also expected to have over 20 million users by the end of the year.
Starlink’s 2022 revenue of $1.4 billion was a huge increase from 2021’s $222 million, but it’s still a long way from its 2015 forecast. A million users, on the other hand, is far from 20 million. The WSJ writes that the company a small Profit in the first quarter of 2023 after two annual losses. Starlink says it will no longer sell its $599 Starlink antennas, also called terminals, at a loss. It also sells specialized antennas for land, marine and aircraft vehicles, costing between $2,500 and $150,000.
Subscriber numbers have increased since 2022, but not by much. SpaceX reported that it had about 1.5 million users as of May 2023, although CEO Jonathan Hofeller said this CNBC that it is now “well above” the 1.5 million mark – a number that includes both consumer and business users.
Starlink’s more than 4,700 satellites in low Earth orbit provide high-speed broadband to people without access to cable or fiber. Additional users have led to a drop in speeds, and some say there’s a glaring problem with its business model: “Starlink is running into a reality articulated by many satellite internet skeptics,” writes the WSJ. “The majority of the global population that the company could serve and who can afford high-speed broadband live in cities. In these regions, internet service is readily available, typically offers a cheaper monthly cost than Starlink, and does not require specialized equipment.”
Many headlines about Starlink these days relate to its use in Ukraine. SpaceX has delivered and maintained over 25,000 terminals to the country since Russia’s invasion.
Musk warned in October that with Starlink donations to Ukraine totaling more than $100 million, his company couldn’t foot the bill forever and suggested the Pentagon should help with the costs. Days later, however, he did a U-turn and confirmed that SpaceX would fund Starlink in Ukraine “indefinitely,” despite claims now that U.S. government agencies have begun paying for additional use of Starlink in the country.
In February, SpaceX restricted Ukraine’s ability to use the Starlink satellite service for offensive military purposes. There was also the recent revelation that Musk turned off Starlink last year to thwart a Ukrainian drone attack on the Russian naval fleet in Crimea because he feared Vladimir Putin would retaliate with a nuclear strike.