Is Musk throwing 30 billion star chain value?

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Original Title: Is Musk Throwing 30 Billion Star Chain Value?

Source: Beijing Commercial Daily

Just after his 50th birthday, “Iron Man” Musk was “nonsense” again. On June 29, local time, when Elon Musk talked about the Starlink project at the Mobile World Congress, he said that its users may reach 500,000 within a year, and the project investment may reach 20 to 30 billion. US dollars.

As the CEO of SpaceX, Musk is very fond of SpaceX’s satellite project. “Our number of active users recently exceeded 69,420, just past the number that is meaningful to the company’s strategy. I think the number of users will continue to increase, and it may exceed 500,000 within 12 months.” This is Musk’s original words.

Starlink is a capital-intensive project of SpaceX, which aims to build a space-based Internet with tens of thousands of satellites in order to provide high-speed, low-latency Internet services to consumers anywhere on the planet. SpaceX has already launched a beta version of this service for some consumers at a monthly fee of $99. In the past year, SpaceX has sought regulatory approval to test the use of the network on aircraft and expand it to large mobile vehicles such as ships and trucks.

According to Musk, SpaceX has launched more than 1,500 satellites so far, and Starlink currently operates in about 12 countries, and it is increasing every month. “You can think of Starlink as filling the gap between 5G and optical fiber. It touches the most difficult areas in the world to cover.” Musk said.

Compared with traditional satellite services, Starlink satellites are deployed in low-Earth orbit, which reduces the delay of its services. Musk emphasized this point. Latency and download speed are key indicators for measuring Internet services. Musk said: “The delay time of the Starlink system is similar to terrestrial fiber and 5G, but we hope to reduce the delay to less than 20 milliseconds.”

Although SpaceX promises a network download speed of 100Mbps and an upload speed of 20Mbps, user reviews have been mixed so far.

Musk said, “We are approaching the launch of the 1.5 version of the satellite. It has a laser link between the satellites, which will be used for continuous connection between the Arctic and Antarctic regions. Next year, we will start launching our second version of the satellite. Ability will be greatly enhanced”.

Of course, to achieve many of Starlink’s goals, investment costs are high. Musk estimates that the full operation of Starlink may require SpaceX to invest 5 billion to 10 billion U.S. dollars, and long-term investment may be as high as 20 to 30 billion U.S. dollars. But SpaceX believes that it can open up a larger market. It is estimated that Starlink can bring in up to 30 billion U.S. dollars each year, which is about 10 times the annual revenue of its rocket launch business.

However, some analysts are skeptical about the commercial viability of Starlink, because the satellite network is mainly for remote areas, and there may not be enough users to pay high fees and achieve the goal of recovering investment costs.

For example, Tim Farrar, chairman of professional services company TMF Associates, proposed that Starlink charges US$99 a month and needs to add millions of subscribers to recover US$5 billion in a year. He said that although with a ten-year investment cost of 30 billion US dollars, it does not require a large increase in users to avoid bankruptcy, but to achieve annual revenue of 30 billion US dollars, it requires a large number of new users to join.

It is worth mentioning that the US Federal Communications Commission (FCC) provided nearly US$900 million in subsidies for Starlink to introduce the Internet to rural areas, which may alleviate the problem of high rated prices.

SpaceX itself is aware of the cost issue. In April of this year, SpaceX President Gwen Shotwell stated that SpaceX has reduced the cost of satellite antennas by more than half from $3,000, and it is expected that the cost will drop to a few hundred dollars in the next one to two years.

In addition, SpaceX said the company can reduce costs by producing its own satellite antennas and satellites. According to people familiar with the matter, SpaceX has already started from chip maker Broadcom,QualcommWait for the company to hire an engineer to design its own communication chip.

PP Foresight analyst Paolo Pescatore (Paolo Pescatore) said that Starlink needs to expand its scale to reduce costs, so it needs to cooperate with telecommunications companies.

According to Musk, Starlink has signed cooperation agreements with two “major countries” telecom operators, but did not disclose their names.

Even if the cost problem can be solved, competition from outside is bound to be fierce.such asAmazonKuiper, its subsidiary, launched a project that directly competes with Starlink; in addition, OneWeb, which has recently received assistance from the British government and India’s Bharti Group, also intends to join the competition in this field.

At the same time, terrestrial telecommunications providers are racing to deploy high-speed 5G broadband services. However, Musk believes that Starlink is not an opponent of 5G providers, but a substitute, and they do not constitute a direct competitive relationship.

Beijing Business Daily Comprehensive Report

Editor in charge: Qi Qiqi