SpaceX President and COO Gwynne Shotwell wants what SpaceX is doing to “revive the industry” while making “young children think about being in the space industry again.”
Kimberly White | Vanity Fair | Getty Images
SpaceX President Gwynne Shotwell does not think the company will add a “differentiated pricing”
“I do not think we need to make differentiated pricing for consumers. We will try to keep it as simple and transparent as possible, so right now there are no plans to differentiate consumers,” said Shotwell, who spoke on Satellite 2021 “LEO Digital Forum” on a virtual panel on Tuesday.
In a differentiated pricing system, what the customer pays is based on the level of service he or she chooses.
Starlink is the company’s capital – intensive project to build an interconnected internet network with thousands of satellites, known in the space industry as a constellation, designed to provide high – speed internet to consumers across the planet.
A Starlink user terminal installed on the roof of a building in Canada.
The company has launched more than 1,200 satellites so far in orbit.
In October, SpaceX began rolling out the early Starlink service in a public beta, now expanding to customers in the US, Canada, the UK, Germany and New Zealand – with a service costing $ 99 a month in the US, in addition to an upfront cost for the equipment needed to connect to the satellites.
Elon Musk’s company has continued to expand Starlink’s service, with the public beta gaining more than 10,000 users in the first three months. Shotwell noted that SpaceX does not “have a time frame to get out of the beta phase” and said the company still has “a lot of work to do to make the network reliable.”
Musk’s company plans to expand Starlink beyond homes and is asking the FCC to expand its connectivity to “moving vehicles” so the service can be used with everything from planes to ships to large trucks.
So far, SpaceX has focused on serving customers in rural and hard-to-reach areas, with Shotwell saying Starlink “will be able to serve any household in the country in the United States” or “about 60 million people.” While SpaceX is adding service to other countries, Shotwell said that SpaceX is originally focused on the US “because they speak English and they are close and if they have a problem with their bowl, we can get one sent out quickly.”
“But we will certainly expand this capacity beyond the United States and Canada,” Shotwell added.
SpaceX absorbs most of the cost of Starlink equipment
Boxes with Starlink kits with user terminals and Wi-Fi routers.
A major obstacle for Starlink as well as any satellite broadband service is the cost of the user terminals: the on-site equipment that connects customers to the network.
Shotwell said SpaceX has “made great strides in reducing costs” for the Starlink user terminal, which was originally around $ 3,000 each. She said the terminals now cost less than $ 1,500 and that SpaceX “has just rolled out a new version that saves about $ 200 in price.”
This means that SpaceX absorbs about two-thirds of the terminal’s costs, as the company charges beta customers $ 499 in advance for a user terminal. Musk said earlier this year that Starlink “will have to go through a deep gulf of negative cash flow,” a significant portion of which is expected to be due to the cost of user terminals.
While SpaceX has so far not charged the full cost of the terminals, Shotwell said the company expects its cost to drop to “a few hundred dollars interval within the next year or two.”
Starlink ‘complementary’ to existing broadband service
60 Starlink satellites are put into orbit after the company’s 17th mission.
Shotwell reiterated previous comments from SpaceX management that Starlink does not want to replace the service from “giant providers AT&T, Comcast, etc.”, noting that its satellite Internet is “very free of charge for the services they provide.”
“The Starlink system is best suited for heavily distributed rural or semi-rural areas,” Shotwell said.
Meanwhile, Shotwell said SpaceX’s challenge is to learn to scale for consumer customers while “making sure we can build a reliable network.” But, she added, none of these are challenges “that we cannot solve.”