Starlink is a satellite internet constellation operated by SpaceX. With billionaire and serial entrepreneur Elon Musk at its helm, the venture provides satellite-based internet access to more than dozens of countries.
The project began in 2019, and as of September 2022, Starlink consists of more than 3,000 mass-produced small satellites in low Earth orbit (LEO), working together in a vast network to communicate with their designated ground transceivers.
Once every so often, SpaceX would launch its rockets with Starlink satellites as payloads, to put more new ones into LEO, and to also replace those that were destroyed and/or missing.
Back in 2018, SpaceX estimated that before it could put its target number of Starlink satellites into LEO, the company needed to have at least $10 billion in cash reserves. At that time, SpaceX expected that it would earn at least $30 billion in revenue by 2025 from its satellite constellation, while revenues from its launch business were expected to reach $5 billion in the same year.
But in 2022, the company seemed to have miscalculated the numbers.
According to Elon Musk, Starlink is still unprofitable.
Musk's Starlink project is meant to blanked the Earth in broadband, in order to make the world's 8 billon inhabitants become potential customers of SpaceX.
Among its services, besides commercial internet connection, include satellite cellular service, military satellites and communications, and the Starshield program.
Besides that, SpaceX itself is already making money from charging the use of the space inside its rockets. Many commercial and governmental entities who wish to put their products up in space have paid for its services. What's more, private customers are are also spending millions of dollars to go up there with its rockets.
All the money SpaceX earned, is meant to fuel the growth of the company, and to profit it for years to come.
In fact, SpaceX did say that its various offerings would be necessary to fund its Mars plans.
The thing is, unpaid bills are preventing the company from saving money.
Starlink is losing money for SpaceX, and that money is a lot.
Maybe as much as $20 million a month.
What's more, the prospects for a successful Starlink IPO is very unlikely until at least 2025 or later.
All these constraints are putting a dent in SpaceX's wallet.
The hell with it … even though Starlink is still losing money & other companies are getting billions of taxpayer $, we’ll just keep funding Ukraine govt for free
— Elon Musk (@elonmusk) October 15, 2022
No money from DoD, but several other countries, orgs & individuals are paying for ~11k/25k terminals (thanks!).
SpaceX is losing ~$20M/month due to unpaid service & costs related to enhanced security measures for cyberwar defense, but we’ll keep doing it (sigh).— Elon Musk (@elonmusk) October 19, 2022
Bad reporting by FT. This article falsely claims that Starlink terminals & service were paid for, when only a small percentage have been.
This operation has cost SpaceX $80M & will exceed $100M by end of year.
As for what’s happening on the battlefield, that’s classified.— Elon Musk (@elonmusk) October 7, 2022
Musk made Starlink instantly famous internationally when he announced its use in Ukraine.
Back in February 2022, Musk announced that the Starlink satellites had become active over Ukraine after a request from the Ukrainian government, effectively replacing internet services destroyed during the 2022 Russian invasion of Ukraine.
By April 2022, SpaceX had sent over 5,000 Starlink terminals to Ukraine to allow Ukrainians access to the Starlink network. SpaceX had also donated 3,667 of the 5,000 terminals, and also removed the monthly service fees.
By August 2022, Ukraine internet service was being provided by more than 20,000 Starlink terminals, some from foreign partners and volunteers, in addition to the existing terminals already provided directly by SpaceX.
Musk spent some of his time on Twitter, which he owns, sharing about the expense of subsidizing Ukraine's access to Starlink during its war against Russia's invasion.
According to him, various government, organizational, and individual supporters are paying for only about 11,000 of the 25,000 of the Starlink terminals sent to Ukraine.
While the 25,000 Starlink terminals operating in Ukraine represent only a small portion of Starlink's 500,000 customers around the globe, if 14,000 of them aren't paying at all, the result is apparently a loss to SpaceX.
In fact, Ukraine alone has the potential to quickly eat up as much as 5% worth of operating profit margin at Starlink.
Read: Ukraine Minister Asks U.S. Tech Companies For Help, And Ask Them To Also Pressure Russia
While SpaceX has indeed received a number of sponsors, the CEO estimated that in total, providing free Starlink service to Ukraine had already cost it $80 million as of October and would top the $100 million mark by then end of 2022.
According to reports, SpaceX has informed the Pentagon it could cost nearly $400 million to continue providing Starlink service to Ukraine over the course of 2023, including the cost of providing Starlink terminals as well as monthly subscription costs. For the military in particular, SpaceX said that bandwidth-hungry military units reportedly ranges as high as $4,500 a month.
In all, SpaceX is saying that it cannot afford to continue this level of revenue loss.
But regardless, SpaceX is a private company.
What this means, the company nor Elon Musk has the obligation to reveal details about its revenue.