When SpaceX launched Starlink, the company anticipated reaching 20 million users by 2022. However, by the end of last year, the satellite internet provider fell short of that goal, nabbing only 1 million customers. Its current base now stands at 1.5 million, according to The Wall Street Journal.
Starlink’s revenue last year totaled $1.4 billion, the WSJ reported, a drop in the ocean compared to its 2015 prediction of reaching $12 billion in revenue and $7 billion in operating profit. While that’s still a significant increase from 2021’s revenue of $222 million, Starlink’s mission to provide satellite internet to millions worldwide has yet to gain the traction it hopes for.
The dramatic shortfall underscores the challenges facing Starlink, which range from steep equipment fees to expensive rocket launches. The disappointment doesn’t undercut the importance of satellite internet, which is a pivotal innovation that will help cover remote areas that otherwise have little to no access. SpaceX has launched 5,000 Starlink satellites into low-Earth orbit and continues to add more, enabling the service to reach more areas.
SpaceX was not immediately available for comment.
At the World Satellite Business Week conference, the Vice President of Starlink, Jonathan Hofeller, said SpaceX is conducting two launches a week to expand Starlink’s coverage further.
Equipment cost is a driving factor behind low subscriber numbers. Residential Starlink antennas sell for $599 each, or between $2,500 to $150,000 for high-use customers such as businesses. SpaceX had been selling the devices at a loss, initially costing $3,000 in manufacturing costs. Hofeller says the terminals now cost under $600 each to produce, and further price reduction is “one of our keys to success,” according to CNBC.
Driving down the initial equipment costs when signing up for Starlink is essential to encourage more people to sign up over less expensive terrestrial options, like broadband or fiber-optic. Both options offer a cheaper monthly bill and a more reliable connection, whereas Starlink costs between $90 to $120 a month, depending on your location.
Starlink is forming partnerships with different enterprises to expand revenue sources. The company recently penned an agreement with SES, a European satellite operator, to launch satellite services on cruise ships in hopes of reaching “millions and millions” of new customers. It will also look into partnerships with international shipping companies, offshore oil rigs, and airlines.
Starlink has reported revenue losses over the past two years but saw a small profit in the first three months of 2023, WSJ reported.