Re: FCC Chair Rosenworcel Proposes to Investigate Impact of Data Caps

[Tom Beecher <beecher () beecher cc>]

> As I mentioned elsewhere, I'm not sure that the current economics are the
> real economics. I'm pretty sure they've been purposefully throttling demand
> because they still don't have the capacity so it would make sense to
> overcharge in the mean time. Is there something inherent in their cpe that
> makes them much more expensive than, say, satellite tv dishes? I can see
> marginally more because of the LEO aspect, but isn't that mainly just
> software? It wouldn't surprise me that the main cost is the truck roll.
- Starlink currently reports around 1.5M subscribers. At $110 a month,
that's $165M in revenue,

- A Falcon 9 launch is billed out at $67M. A Falcon 9 can carry up to 60
Starlink sats. That's ~667 launches to reach the stated goal of 40k sats in
the constellation. So roughly $45B in just launch costs, if you assume the
public launch price. (Because if they are launching their own stuff, they
aren't launching an external paying customer.)
- The reported price per sat is $250k.

Assuming they give themselves a friendly internal discount, the orbital
buildout cost are in the neighborhood of $30B for launches, and $10B for
sats.

- The satellite failure rate is stated to be ~ 3% annually. On a 40K
cluster, that's 1200 a year.

That's about 20 more launches a year, and $300M for replacement sats. Let's
round off and say that's $1B a year there.

 So far, that's a $40B buildout with a $1B annual run rate. And that's just
the orbital costs. We haven't even calculated the manufacturing costs of
the receiver dishes, terrestrial network infra cost , opex from staff ,
R&D, etc .

Numbers kinda speak for themselves here.

I mean, I get that Musk is sort of a cuckoo bird but say what you will he
> does have big ambitions.

Ambition is good. But reality tends to win the day. As does math.





On Sat, Jun 17, 2023 at 4:38 PM Michael Thomas <mike () mtcc com> wrote:

> On 6/17/23 1:25 PM, Tom Beecher wrote:
>
> Won't Starlink and other LEO configurations be that backstop sooner
> > rather than later?
>
> Unlikely. They will remain niche. The economics don't make sense for those
> services to completely replace terrestrial only service.
>
> Why would they put up 40000 satellites if their ambition is only niche? I
> mean, I get that Musk is sort of a cuckoo bird but say what you will he
> does have big ambitions.
>
> From my standpoint, they don't have to completely replace the incumbents.
> I'd be perfectly happy just keeping them honest.
>
> As I mentioned elsewhere, I'm not sure that the current economics are the
> real economics. I'm pretty sure they've been purposefully throttling demand
> because they still don't have the capacity so it would make sense to
> overcharge in the mean time. Is there something inherent in their cpe that
> makes them much more expensive than, say, satellite tv dishes? I can see
> marginally more because of the LEO aspect, but isn't that mainly just
> software? It wouldn't surprise me that the main cost is the truck roll.
>
> Mike
>
>
>
> On Fri, Jun 16, 2023 at 4:17 PM Michael Thomas <mike () mtcc com> wrote:
>
> > On 6/16/23 1:09 PM, Mark Tinka wrote:
> > > On 6/16/23 21:19, Josh Luthman wrote:
> > > > Mark,
> > > >
> > > > In my world I constantly see people with 0 fixed internet options.
> > > > Many of these locations do not even have mobile coverage.
> > > > Competition is fine in town, but for millions of people in the US
> > > > (and I'm going to assume it's worse or comparable in CA/MX) there is
> > > > no service.
> > > >
> > > > As a company primarily delivering to residents, competition is not a
> > > > focus for us and for the urban market it's tough to survive on a ~1/3
> > > > take rate.
> > >
> > > I should have been clearer... the lack of competition in many markets
> > > is not unique to North America. I'd say all of the world suffers that,
> > > since there is only so much money and resources to go around.
> > >
> > > What I was trying to say is that should a town or village have the
> > > opportunity to receive competition, where existing services are
> > > capped, uncapping that via an alternative provider would be low
> > > hanging fruit to gain local marketshare. Of course, the alternative
> > > provider would need to show up first, but that's a whole other thread.
> > Won't Starlink and other LEO configurations be that backstop sooner
> > rather than later? I don't know if they have caps as well, but even if
> > they do they could compete with their caps.
> >
> > Mike