Elon Musk’s Starlink satellite communications network has so far failed to meet ambitious expectations. But things are looking up.
• Starlink is successfully used in the Ukraine war
• However, the satellite communications network fails to meet its ambitious goals
• Nevertheless positive development
In addition to Tesla, the space company SpaceX is another major project Elon Musk, which the visionary billionaire also heads as CEO. One part of SpaceX is Starlink, a global satellite network with the aim of making high-speed internet available to people almost worldwide.
Starlink received a lot of media attention in connection with the Russian attack on Ukraine. After Russia disrupted Ukrainian communications systems, Musk agreed to provide Ukraine with Starlink satellite terminals worth millions of dollars. SpaceX covered part of the costs itself, and further financial support came from the USA and Europe – including Germany.
Goals missed
But despite this public attention, Starlink’s financial performance remains far below expectations. Although SpaceX, as a non-listed company, is not obliged to disclose its figures, the Wall Street Journal nevertheless became aware of them. According to a presentation from 2015, SpaceX’s satellite internet subsidiary actually wanted to achieve sales of twelve billion US dollars and an operating profit of seven billion US dollars by 2022.
In fact, Starlink only generated sales of $1.4 billion last year, although it is not known whether the satellite communications network was able to break even. The fact that the sales target was missed so much is probably also due to the fact that by 2022 only one million users could be gained instead of the targeted 20 million.
Reason for optimism
The Starlink satellite communications network was actually intended to bring Internet to regions that do not have Internet access. However, due to the high costs, Starlink Internet can only be afforded by people who live in regions where there are numerous other Internet providers.
But there is still reason for confidence, because Starlink managed to create positive cash flow in one quarter in 2022. What is positive for the earnings development is that the manufacturing costs for the reception terminals have been reduced from around $3,000 each to now under $600. This means that the terminals can now be offered at a cost-covering price, as users have to pay $599 for them. In addition, the number of users had already climbed to around 1.5 million by May 2023, it said.
Editorial team finanzen.net
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