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I don't have any insider info but there is absolutely no chance that the dish is costing them even <2x what they are charging for it. I don't really see how the
by apcragg 6y ago
I don't have any insider info but there is absolutely no chance that the dish is costing them even <2x what they are charging for it. I don't really see how their business model pencils out even assuming massive oversubscription, perfectly geographically distributed customers, and the new laser links. It's just hard to make it work when your satellites fall out of the sky and need replacing. The technology certainly works and is really cool to see as an engineer, don't get me wrong, but even Musk businesses will eventually need to make money. For Tesla, their path to profit was steep, but feasible; here I just don't see it at all.
- ecpottinger 6y agoWhy? It will take less than two years, maybe one year subscription to pay for the dish, and calculation show $10 a month pays for the satellites. It looks like pure profit for any customer who uses their service for three or more years, and there are a lot of customers out there.
- apcragg 6y agoIt's not pure profit because, a) you can only oversubscribe 20GB/s so much without data caps and speed limits b) a small fraction of the constellation will be over inhabited land and wealthy enough countries at any moment c) I am assuming they lose money the first ~1.5 years to recoup the dish cost and R&D, d) ground link opex e) sats fall out of the sky and need replacing f) subsidized launches via rideshare only work if there is enough demand into inclined LEO, otherwise its $30M per launch at per sat costs go way up g) Customers are not uniformly distributed over earth's landmasses