SpaceX sees Starlink as a crucial company to fund missions to Mars

SpaceX is the champion of integration: the company builds its own rockets with its own engines, it launches them, it works on a lunar landing module, sends tourists into space… and it puts Starlink into orbit, largest constellation of low-altitude satellites, intended to connect underserved regions to the Internet.

Starlink is not an activity like any other in the SpaceX portfolio: the central pillar of its economic model, it is a bit of the fuel to finance its activities and the dream that its boss shows: to go to Mars.

SpaceX, which is an unlisted company, does not publish its accounts… But as early as 2015, an internal document leaked into The Wall Street Journal shows the scale of its ambitions for Starlink, then in the state of a simple project: a launch was to be planned in 2018, and its revenues were to exceed those generated by rocket launches in 2020, reaching $30 billion by 2025 (approx. 28.4 billion euros), with 40 million customers, for an operating profit of 15 to 20 billion… In comparison, SpaceX expected only 1.8 billion dollars in total revenue for 2016.

A quick calculation

Gwynne Shotwell, SpaceX’s number two, confirms the centrality of the constellation with some quick math: “The global space launch market is worth 6 to 8 billion dollars a year. That of the Internet connection can be estimated at 1,000 billion dollars. Imagine SpaceX getting 60% of the launcher market and only 3% of the connectivity market… Starlink is actually our largest potential source of income”, she explained in September in front of journalists in Paris.

In fact, under this scenario, launch vehicles (for satellites, astronauts, equipment, etc.) would generate 4 to 5 billion dollars in revenue per year, compared to 30 billion for the constellation, i.e. 6 to 7.5 times more… It’s better to have a very small slice of a very large pie than a large slice of a small pie, reasons SpaceX. “Starlink is a huge monetization opportunity. And we’re seeing more and more synergies with SpaceX,” also suggests financial analyst Dan Ives, from the bank Wedbush Securities.

The small antennas needed for reception are now sold at a loss: billed at $600, they cost more than $1,000 to produce.

In Elon Musk’s mind, therefore, Starlink is one “important stepping stone” to realize his dream of establishing a city on Mars and a base on the Moon, as he explained in 2019 to the Space.com site. “We think we can use Starlink to fund Starship,” he added, referring to his giant rocket designed to go to the red planet. “If we want to take people to the Moon and Mars, we have to make sure they can communicate there and with Earth,” also confirms very seriously Mme Shotwell.

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