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SpaceX is losing money on its Starlink terminals, but sees lower costs ahead

·2-min read

It may be a little while longer until Starlink hits profitability. The SpaceX project, which aims to deliver global high-speed broadband via a satellite network, sells its beta kits to customers for around $500 dollars despite it costing much more to produce them, CEO Elon Musk said in an interview Tuesday.

The kit includes a user terminal, a kind of dish, that connects the customer to the satellites and enables broadband access. “To be totally frank, we are losing money on that terminal right now,” he said. "That terminal costs us more than $1,000, so obviously I’m subsidizing the cost of the terminal.” He went on to add that SpaceX is working on a next-gen terminal capable of providing the same capability, but at a lower cost to make.

SpaceX’s overall investment in the project could be between $5 billion-$10 billion initially and as much as $30 billion over time, as the company continues to provide improvements and stay competitive against improvements in cellular technology, he said.

Musk, who made these comments during a virtual keynote at the Mobile World Congress event in Barcelona on Tuesday, also provided other details about the current status of Starlink. The project is on track to have over half a million users within the next 12 months, he said, and is operational in around 12 countries with more “being added every month.”

SpaceX is also getting close to launching satellite version 1.5, which will have laser intersatellite links to provide continuous connectivity over high-latitude and polar regions. Next year the company will launch version 2, “which will be significantly more capable,” Musk noted.

Starlink satellites streak through a telescope's observations. Image Credits: SpaceX

The project has entered into two partnerships with major country telecommunications companies, though Musk declined to specify their names.

It is hard to imagine Starlink without the breakthrough in rocket reusability achieved by SpaceX. “But we still need to take this to another level with [ … ] the Starship development,” Musk said. That rocket will be designed for rapid reusability — so the ability to relaunch with little to no time on the ground between flights, similar to an airplane’s capabilities today.

Starship is key to Musk’s vision to build a base on the moon or a city on Mars. He said the company is hoping to make the first orbital launch attempt with Starship in the next few months. SpaceX filed a request for approval with the Federal Communications Commission (FCC) to fly Starlink terminals on the new spacecraft in order to “demonstrate high data rate communications” between Starship’s launch system and the ground throughout the mission.

Read more about Mobile World Congress 2021 on TechCrunch
Read more about Mobile World Congress 2021 on TechCrunch
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