On May 10th, market research and consulting firm Quilty Space recently released a report revealing that SpaceX's Starlink satellite network is developing at a pace far beyond expectations.
Quilty Space analysts unveiled this report during a webinar on May 9th, projecting that Starlink's revenue in 2024 will reach a staggering $6.6 billion, breaking industry doubts and potentially reshaping the future of satellite internet.
"In 2015, when SpaceX and OneWeb announced plans to build satellite internet, many industry veterans scoffed," recalled Chris Quilty, founder of Quilty Space. "They remembered the failures of satellite network projects in the 1990s. While some in the industry anticipated Starlink's potential, its actual success has exceeded their expectations."
In May 2019, SpaceX successfully launched the first batch of 60 Starlink satellites using its Falcon 9 rocket.
Today, the Starlink satellite network boasts nearly 6,000 satellites, with 5,200 in operation, serving 2.7 million subscribers across 75 countries. As a private company, SpaceX has not disclosed Starlink's financial data. The rapid growth of Starlink prompted Quilty Space to delve into the driving forces behind its success.
Quilty stated, "Starlink's achievements over the past three years are astonishing. We predict its revenue will jump from $1.4 billion in 2022 to $6.6 billion in 2024."
Notably, the recently announced merger of the two major geostationary satellite operators SES and Intelsat is estimated to have a combined revenue of around $4.1 billion.
Achieving Explosive Growth
Quilty explained, "The key to success lies in their user base." He mentioned that Viasat and Hughes, as major providers of geostationary consumer satellite internet services, peaked at 2.2 million users in 2020. However, Starlink surpassed this number in just a few years.
The financial outlook is equally impressive. Quilty Space forecasts that Starlink's EBITDA (earnings before interest, taxes, depreciation, and amortization) will reach $3.8 billion in 2024, a significant improvement from a loss of $128 million in 2022. "We expect Starlink to achieve positive free cash flow for the first time in 2024," Quilty said.
Starlink's success is also attributed to its popularity in affluent countries where consumers are willing to pay a premium. Justin Cadman, Co-CEO of Quilty Space, stated that Starlink currently serves mainly middle to high-income markets and has yet to bridge the digital divide.
He estimated that Starlink's current user base includes approximately 50,000 users spanning transportation, businesses, and government sectors. Quilty added, "Starlink initially focused on direct-to-consumer sales, a strategy that fueled rapid expansion. Today, they are further expanding into enterprise, transportation, and government markets."
Cost Advantage
Caleb Henry, Research Director at Quilty Space, noted that Starlink's financial success is partly due to SpaceX's expertise in satellite manufacturing.
Henry said, "Starlink has excelled in reducing spacecraft costs, significantly lower than any known industry standards."
Quilty Space evaluations indicate a significant shift in Starlink satellite manufacturing costs. The first-generation V1 satellites cost around $200,000 each, while the new V2 mini versions reach up to $800,000, reflecting their increased weight and performance (from 260 kg to 730 kg).
Looking ahead, Quilty predicts that the next-generation V3 satellites will weigh 1,500 kg, costing approximately $1.2 million each.
How did SpaceX achieve this cost advantage? Henry pointed out two main factors: active vertical integration and large-scale production.
Henry explained, "By internally controlling most of the manufacturing processes, SpaceX avoids the additional profits common to external suppliers, effectively reducing costs." Additionally, SpaceX has established a unique production rhythm, creating satellite production rates unseen in the industry.
He also noted that this efficiency-driven approach requires some trade-offs. "As spacecraft capabilities enhance to handle higher capacity and data rates, corresponding power consumption increases, directly leading to cost and quality improvements." Quilty Space estimates that out of SpaceX's approximately 13,000 employees, around 3,000 are dedicated to the Starlink business.
Henry predicts that if SpaceX's new generation Starship rockets can start deploying Starlink satellites before 2025, "they may directly begin launching V3 satellites."
