Author Topic: Starlink : Markets and Marketing  (Read 296786 times)

Offline gongora

  • Global Moderator
  • Senior Member
  • *****
  • Posts: 10128
  • US
  • Liked: 13696
  • Likes Given: 5870
Starlink : Markets and Marketing
« on: 01/21/2020 11:39 pm »
For links to other Starlink discussion threads, launch threads, and FCC filings take a look at the Starlink Index Thread


This thread is for discussion of customer markets for Starlink, geographic availability, pricing, etc.

Offline TorenAltair

  • Full Member
  • ****
  • Posts: 507
  • Germany
  • Liked: 588
  • Likes Given: 116
Re: Starlink : Markets and Marketing
« Reply #1 on: 01/22/2020 02:09 am »
About the price/market tweet and discussion. The basic assumption about a worldwide price of 60$ or so is wrong imo at the very basic level. Things do cost different in different countries. For example cars are much more expensive in Germany than in other countries and I assume the same principle will be true for Starlink. While in Germany the service might cost 80$ (or Euros), the price for example in Romania might be 25$ and in England 100$.

Offline thirtyone

  • Full Member
  • **
  • Posts: 256
  • Liked: 431
  • Likes Given: 352
Re: Starlink : Markets and Marketing
« Reply #2 on: 01/22/2020 04:06 am »
Cell phone towers and internet (mobile or fixed) require a backbone connection.   Maintaining a WIRED backbone connection in the third world is, ah, challenging.

SL will provide the opportunity to setup more economically viable cellphone towers and provide more Internet gateways compared to just wired connections.

The same is true in rural America, Canada, etc. etc.

Continuing from previous thread...

Definitely true, but keep in mind that a lot of backhaul in developing countries can be done via point-to-point wireless, so that's what you'd have to compete against. Seems like a lot of that equipment is now either solar or diesel powered for areas with intermittent electricity, which would be a requirement for Starlink as well of course.

Also do not underestimate the cellphone coverage already available in many of these regions - the push for mobile connectivity I was previously mentioning came a decade ago. Many of us probably don't live in developing regions so it's a good idea to double check our assumptions (I had to look up some numbers just now). In West and Sub-Saharan Africa, for example, a little under 50% of the population have mobile phones, and given that people care share phones for economically critical functions, it's not clear how strong the demand is for further coverage. Point I'm really making is that you're not competing with a market with no other solutions, just possibly more expensive solutions with less bandwidth, so even in the developing world there is a price point that needs to be matched.

Also, I should note that many of these points apply to OneWeb, Telesat, and other megaconstellation deployments as well.

Some references:
GSMA - The Mobile Economy - Sub-Saharan Africa 2019
GSMA - The Mobile Economy - West Africa 2019
The Deloitte Consumer Review - Africa: A 21st century view

Article on satellite backhaul in rural areas using previous technologies:
https://www.gilat.com/wp-content/uploads/2018/10/Gilat-Article-TowerXchange-Africa-2018-10-Reliable-satellite-backhaul-solutions.pdf
« Last Edit: 01/22/2020 04:09 am by thirtyone »

Offline indaco1

  • Full Member
  • **
  • Posts: 283
  • Liked: 64
  • Likes Given: 37
Re: Starlink : Markets and Marketing
« Reply #3 on: 01/22/2020 06:20 am »
Even if Starlink will maximize revenue, the optimal price depends on price elasticity of demand, total Satellite band capacity in a specific area and marginal cost of equipment.

LTE base stations are cheap (expecialy when no Huawei ban), so are solar panels and batteries required to power them and Starlink stations (that I assume will also be relatively cheap when shared). 
« Last Edit: 01/22/2020 06:22 am by indaco1 »
Non-native English speaker and non-expert, be patient.

Offline Welsh Dragon

  • Full Member
  • ****
  • Posts: 674
  • Liked: 1052
  • Likes Given: 116
Re: Starlink : Markets and Marketing
« Reply #4 on: 01/22/2020 07:48 am »
About the price/market tweet and discussion. The basic assumption about a worldwide price of 60$ or so is wrong imo at the very basic level. Things do cost different in different countries. For example cars are much more expensive in Germany than in other countries and I assume the same principle will be true for Starlink. While in Germany the service might cost 80$ (or Euros), the price for example in Romania might be 25$ and in England 100$.
Internet in the US is far far far more expensive than it is here in the UK. If they price Starlink at $100, they won't get much custom at all. Thats well over twice what I pay for my fibre internet, phone line, and TV combined. Even $60 would be on the pricy side.

Offline TorenAltair

  • Full Member
  • ****
  • Posts: 507
  • Germany
  • Liked: 588
  • Likes Given: 116
Re: Starlink : Markets and Marketing
« Reply #5 on: 01/22/2020 08:35 am »
About the price/market tweet and discussion. The basic assumption about a worldwide price of 60$ or so is wrong imo at the very basic level. Things do cost different in different countries. For example cars are much more expensive in Germany than in other countries and I assume the same principle will be true for Starlink. While in Germany the service might cost 80$ (or Euros), the price for example in Romania might be 25$ and in England 100$.
Internet in the US is far far far more expensive than it is here in the UK. If they price Starlink at $100, they won't get much custom at all. Thats well over twice what I pay for my fibre internet, phone line, and TV combined. Even $60 would be on the pricy side.

The numbers were just examples or placeholders to show that as with basically every product, the price is different in each country/region and the simple comparison of a fixed price worldwide to the GDP per head is not correct in my opinion.

Offline Welsh Dragon

  • Full Member
  • ****
  • Posts: 674
  • Liked: 1052
  • Likes Given: 116
Re: Starlink : Markets and Marketing
« Reply #6 on: 01/22/2020 11:00 am »
The numbers were just examples or placeholders to show that as with basically every product, the price is different in each country/region and the simple comparison of a fixed price worldwide to the GDP per head is not correct in my opinion.
Oh I know. I agree and was giving an example. SpaceX need to do their market research, basically.

Offline LouScheffer

  • Senior Member
  • *****
  • Posts: 3360
  • Liked: 6049
  • Likes Given: 823
Re: Starlink : Markets and Marketing
« Reply #7 on: 01/24/2020 03:18 am »
Here we go. Astronomers doing economic analysis of Starlink assuming it will be sold worldwide for $60 USD.
The satellites will be over Africa by orbital necessity, at no additional cost, since SpaceX needs to serve the populated, affluent areas in the northern hemisphere.  Therefore every dollar they can get from Africa is straight marginal profit.  Prices will be set by supply and demand.  The supply of bandwidth is the same everywhere on Earth (minus the poles), so for most of the southern hemisphere where the demand is low the prices will be low - I suspect much less than $60/month.

Online Semmel

  • Senior Member
  • *****
  • Posts: 2178
  • Germany
  • Liked: 2433
  • Likes Given: 11916
Re: Starlink : Markets and Marketing
« Reply #8 on: 01/24/2020 07:32 am »
Here we go. Astronomers doing economic analysis of Starlink assuming it will be sold worldwide for $60 USD.
The satellites will be over Africa by orbital necessity, at no additional cost, since SpaceX needs to serve the populated, affluent areas in the northern hemisphere.  Therefore every dollar they can get from Africa is straight marginal profit.  Prices will be set by supply and demand.  The supply of bandwidth is the same everywhere on Earth (minus the poles), so for most of the southern hemisphere where the demand is low the prices will be low - I suspect much less than $60/month.

I can totally see them supplying a receiver complete with solar panels and a small battery. At least, these things dont get harvested for copper like power cables (and fibre communication cables because the robbers dont know the difference).

Online StuffOfInterest

  • Full Member
  • ****
  • Posts: 924
  • Just interested in space
  • McLean, Virginia, USA
  • Liked: 886
  • Likes Given: 226
Re: Starlink : Markets and Marketing
« Reply #9 on: 01/24/2020 10:30 am »
The satellites will be over Africa by orbital necessity, at no additional cost, since SpaceX needs to serve the populated, affluent areas in the northern hemisphere.  Therefore every dollar they can get from Africa is straight marginal profit.  Prices will be set by supply and demand.  The supply of bandwidth is the same everywhere on Earth (minus the poles), so for most of the southern hemisphere where the demand is low the prices will be low - I suspect much less than $60/month.
Keep in mind that starting up service in Africa is not as simple as dropping in a few UFO antennas.  There will be government regulatory approval needed in each country they want to operate in.   They will need to setup ground relay stations being that the signal is not hoping between satellites yet.   The ground relay stations will need connection agreements with one or more carrier networks to move their traffic.

Also need to keep in mind the politics.  As an example, Egypt may not want user terminals in their country routed through a ground station in Libya as it would prevent any national traffic filtering from being put in place.  Hard to shut off Facebook when you don't control the pipe in and out of the country.  In a worst case scenario, every country in that region could require a ground station and logic in the network to only allow traffic from user terminals in their country to route through the nation's ground station.

Offline Hauerg

  • Full Member
  • ****
  • Posts: 900
  • Berndorf, Austria
  • Liked: 514
  • Likes Given: 2573
Re: Starlink : Markets and Marketing
« Reply #10 on: 01/24/2020 10:54 am »
Saw an analyses somewhere that was doubting the needed for dedicated groundstations in populated areas because the receivers themselves would also work as relays.
All needed would be a handful of relay stations along the Arctic and half a dozen ships for guaranteed ocean coverage.

Offline gongora

  • Global Moderator
  • Senior Member
  • *****
  • Posts: 10128
  • US
  • Liked: 13696
  • Likes Given: 5870
Re: Starlink : Markets and Marketing
« Reply #11 on: 01/24/2020 03:39 pm »
Saw an analyses somewhere that was doubting the needed for dedicated groundstations in populated areas because the receivers themselves would also work as relays.
All needed would be a handful of relay stations along the Arctic and half a dozen ships for guaranteed ocean coverage.

You still need gateways.  They was some speculation about trying to use user terminals as low performance relays, but you still have to connect to the internet.

Offline Prettz

  • Full Member
  • ****
  • Posts: 497
  • O'Neillian
  • Atlanta, GA
  • Liked: 259
  • Likes Given: 30
Re: Starlink : Markets and Marketing
« Reply #12 on: 01/24/2020 04:13 pm »
Here we go. Astronomers doing economic analysis of Starlink assuming it will be sold worldwide for $60 USD.
The satellites will be over Africa by orbital necessity, at no additional cost, since SpaceX needs to serve the populated, affluent areas in the northern hemisphere.  Therefore every dollar they can get from Africa is straight marginal profit.  Prices will be set by supply and demand.  The supply of bandwidth is the same everywhere on Earth (minus the poles), so for most of the southern hemisphere where the demand is low the prices will be low - I suspect much less than $60/month.
One reason why that tweet above was ridiculous to me is that $60 is just a bit less than what Comcast charges for cable internet in my suburban area. When Starlink begins offering regular consumer service, they will have to offer it for substantially less than $60 in the US or else they're only competing for customers already restricted to expensive satellite internet. We know that's not the intention.

Offline RoboGoofers

  • Full Member
  • ****
  • Posts: 1000
  • NJ
  • Liked: 868
  • Likes Given: 961
Re: Starlink : Markets and Marketing
« Reply #13 on: 01/24/2020 04:27 pm »
If a Starlink sat has no subscribers underneath it, it generates $0. it's a wasted resource. it would make sense to reduce the price in those countries so that the sat makes something. after all it'll be spending most if it's time over water where they're even less chance to generate money; best not to waste the resource of a populated land mass.


Offline dror

  • Full Member
  • ****
  • Posts: 730
  • Israel
  • Liked: 245
  • Likes Given: 593
Re: Starlink : Markets and Marketing
« Reply #14 on: 01/24/2020 04:30 pm »
Here we go. Astronomers doing economic analysis of Starlink assuming it will be sold worldwide for $60 USD.
The satellites will be over Africa by orbital necessity, at no additional cost, since SpaceX needs to serve the populated, affluent areas in the northern hemisphere.  Therefore every dollar they can get from Africa is straight marginal profit.  Prices will be set by supply and demand.
Or bandwidth may be limited by availability.
Quote
The supply of bandwidth is the same everywhere on Earth (minus the poles), ..
Is that true?
Isn't the supply of bandwidth greater closer to the max of the orbital latitude (~52) and lower around the equator?
Space is hard immensely complex and high risk !

Offline ChrisWilson68

  • Senior Member
  • *****
  • Posts: 5266
  • Sunnyvale, CA
  • Liked: 4992
  • Likes Given: 6458
Re: Starlink : Markets and Marketing
« Reply #15 on: 01/24/2020 04:46 pm »
The satellites will be over Africa by orbital necessity, at no additional cost, since SpaceX needs to serve the populated, affluent areas in the northern hemisphere.  Therefore every dollar they can get from Africa is straight marginal profit.  Prices will be set by supply and demand.  The supply of bandwidth is the same everywhere on Earth (minus the poles), so for most of the southern hemisphere where the demand is low the prices will be low - I suspect much less than $60/month.
Keep in mind that starting up service in Africa is not as simple as dropping in a few UFO antennas.  There will be government regulatory approval needed in each country they want to operate in.   They will need to setup ground relay stations being that the signal is not hoping between satellites yet.   The ground relay stations will need connection agreements with one or more carrier networks to move their traffic.

Also need to keep in mind the politics.  As an example, Egypt may not want user terminals in their country routed through a ground station in Libya as it would prevent any national traffic filtering from being put in place.  Hard to shut off Facebook when you don't control the pipe in and out of the country.  In a worst case scenario, every country in that region could require a ground station and logic in the network to only allow traffic from user terminals in their country to route through the nation's ground station.

In a year or two SpaceX is planning to roll out the inter-satellite links.  So it's reasonable to consider the state of things in a few years when there are such links.

The analysis is of the economics only, not the politics.  I think it's useful to consider the two questions separately.  Do the economics make sense for poor areas?  If no, the politics of these countries don't matter.  If yes, then we can consider the politics.

I think the economic discussion above gives some good reason to believe the economics work out for poor countries.  So the political question comes up -- will the governments in these countries stymie what should be an opportunity to greatly improve the lives of their people?  I think some will and some won't, but even having some let Starlink in to help their people will mean a lot of improvement in the lives of a lot of people.

Offline ChrisWilson68

  • Senior Member
  • *****
  • Posts: 5266
  • Sunnyvale, CA
  • Liked: 4992
  • Likes Given: 6458
Re: Starlink : Markets and Marketing
« Reply #16 on: 01/24/2020 04:49 pm »
Quote
The supply of bandwidth is the same everywhere on Earth (minus the poles), ..
Is that true?
Isn't the supply of bandwidth greater closer to the max of the orbital latitude (~52) and lower around the equator?

Yes, that's true.  But there will still be a lot of bandwidth available around the equator.

Offline groundbound

  • Full Member
  • ***
  • Posts: 382
  • Liked: 405
  • Likes Given: 15
Re: Starlink : Markets and Marketing
« Reply #17 on: 01/24/2020 08:47 pm »
Here we go. Astronomers doing economic analysis of Starlink assuming it will be sold worldwide for $60 USD.
The satellites will be over Africa by orbital necessity, at no additional cost, since SpaceX needs to serve the populated, affluent areas in the northern hemisphere.  Therefore every dollar they can get from Africa is straight marginal profit.  Prices will be set by supply and demand.  The supply of bandwidth is the same everywhere on Earth (minus the poles), so for most of the southern hemisphere where the demand is low the prices will be low - I suspect much less than $60/month.
One reason why that tweet above was ridiculous to me is that $60 is just a bit less than what Comcast charges for cable internet in my suburban area. When Starlink begins offering regular consumer service, they will have to offer it for substantially less than $60 in the US or else they're only competing for customers already restricted to expensive satellite internet. We know that's not the intention.

Comcast has over 26 million internet subscribers right now, the majority of whom hate it with a passion.

I would take the bet that at least 10% of the subscriber base would be willing to switch for a service that charged 30% more than what they are paying Comcast. That by itself represents over 2 billion dollars of gross annual revenue.

Offline Hummy

  • Full Member
  • *
  • Posts: 108
  • Los Angeles
  • Liked: 206
  • Likes Given: 172
Re: Starlink : Markets and Marketing
« Reply #18 on: 01/24/2020 11:48 pm »
Comcast has over 26 million internet subscribers right now, the majority of whom hate it with a passion.

I would take the bet that at least 10% of the subscriber base would be willing to switch for a service that charged 30% more than what they are paying Comcast. That by itself represents over 2 billion dollars of gross annual revenue.

And yet Comcast added a quarter million wireless subscribers in Q4 and passed 2 million total wireless subscribers milestone.

Offline gtae07

  • Full Member
  • *
  • Posts: 141
  • Georgia, USA
  • Liked: 314
  • Likes Given: 412
Re: Starlink : Markets and Marketing
« Reply #19 on: 01/25/2020 11:32 am »
Comcast has over 26 million internet subscribers right now, the majority of whom hate it with a passion.

I would take the bet that at least 10% of the subscriber base would be willing to switch for a service that charged 30% more than what they are paying Comcast. That by itself represents over 2 billion dollars of gross annual revenue.

And yet Comcast added a quarter million wireless subscribers in Q4 and passed 2 million total wireless subscribers milestone.

One doesn't disprove the other.  The wireless subscribers are coming from a much different market; the ~26 million subscribers referenced by groundbound is basically the fixed, wired installation market--home subscribers, small businesses, etc.--not the mobile/wireless market, where there's actually competition.

Most of those "landline" subscribers, particularly the home subscribers, don't have much of a choice in internet provider.  Sure, you can get dialup (I think... is that even a thing anymore?), and most people can get existing (slow, data-capped) satellite service... but for reasonably fast, reliable internet service outside of urban areas the market mostly consists of a patchwork of local monopolies, if it's available at all.

I live in a suburb of a small coastal city.  As long as I've lived here, we've had one choice for the aforementioned "fast, reliable" internet service--a regional telecom provider.  And they knew it.  We paid through the nose for 5 megabit service for years, and I was told point-blank by a customer service rep that they knew we had no other choice, so they charged us more.  In the last 2-3 years we've finally been able to get 50, then 100 Mb service at about the same pricing... only because another provider declared plans to move in (they just finished running conduit and tearing everyone's yards up, but that's another matter).  Almost everyone in our neighborhood who didn't have need for a lot of data switched to satellite or 4G hotspots just to be rid of the local company. 

The experiences my wife had at her apartment outside of Atlanta years ago, with another provider, are even more laughable (at least in hindsight). 

Most of Comcast's subscribers are in the same boat--they don't have a reasonable alternative, and Comcast knows it.  Whether it's exorbitant pricing, poor reliability/speeds, bad customer service, or something else, relatively few people actually like their internet provider.  Presenting an alternative can only benefit them with better prices, better service, faster speeds, etc. 

Tags:
 

Advertisement NovaTech
Advertisement Northrop Grumman
Advertisement
Advertisement Margaritaville Beach Resort South Padre Island
Advertisement Brady Kenniston
Advertisement NextSpaceflight
Advertisement Nathan Barker Photography
1