SpaceX has no plans to add “tiered pricing” to its Starlink satellite Internet service, according to the president
SpaceX President and COO Gwynne Shotwell wants what SpaceX is doing to “revitalize the industry” while “getting young children back to thinking about being back in the space industry”.
Kimberly White | Vanity Fair | Getty Images
Gwynne Shotwell, President of SpaceX, doesn’t expect the company to add “tier pricing” to its Starlink satellite Internet service, which is currently offered for $ 99 a month with limited early access.
“I don’t think we will be offering tiered pricing to consumers. We will try to keep this as simple and transparent as possible. So there are currently no plans for consumers,” said Shotwell, speaking on the satellite on Tuesday 2021 “LEO Digital Forum” on a virtual panel.
In a tiered price system, the customer’s payment is based on the service level selected by them.
Starlink is the company’s capital-intensive project to build an interconnected Internet network of thousands of satellites, known in the aerospace industry as a Constellation, designed to deliver high-speed Internet to consumers around the world.
A Starlink user terminal installed on the roof of a building in Canada.
The company has put more than 1,200 satellites into orbit to date.
In October, SpaceX began rolling out the early Starlink service in a public beta phase that now includes customers in the US, Canada, the UK, Germany and New Zealand. The US price is $ 99 per month on top of the upfront cost of the equipment needed to connect to the satellites.
Elon Musk’s company has further expanded Starlink’s service. In the first three months, the public beta gained more than 10,000 users. Shotwell noted that SpaceX does not have a “timeframe to exit beta” and that the company still “has a lot of work to do to make the network reliable”.
Musk’s company plans to expand Starlink beyond home ownership and is calling on the Federal Communications Commission to extend their connectivity permit to “moving vehicles” so the service can be used in anything from airplanes to ships to large Truck.
SpaceX is currently focused on serving customers in rural and hard-to-reach areas. According to Shotwell, Starlink can “serve every rural household in the US” or “approximately 60 million people.”
While SpaceX is expanding service to other countries, Shotwell says the company is initially focusing on the US “because they speak English and are nearby and if they have a problem with their court we can have one delivered quickly.”
“But we definitely want to expand this capability beyond the US and Canada,” added Shotwell.
SpaceX pays a large part of the Starlink equipment costs
Boxes with Starlink kits with user terminals and wireless routers.
A major obstacle to Starlink, as well as to any satellite broadband service, is the cost of the user terminals: the on-site devices that connect customers to the network.
According to Shotwell, SpaceX has made “great strides in reducing the cost” of the Starlink user terminal, originally about $ 3,000 each. She said the terminals are now under $ 1,500 and SpaceX “just released a new version that saved about $ 200 in costs”.
That means SpaceX will cover about two-thirds of the cost of the terminals, as the company will pre-bill beta customers $ 499 for a user terminal.
Musk said earlier this year that Starlink “must bridge a deep gap in negative cash flow,” a significant portion of which is believed to be due to the cost of user terminals.
While SpaceX has not yet charged customers the full price of the terminals, the company expects costs to drop to “a few hundred dollars” in the next year or two, according to Shotwell.
Starlink “complementary” to existing broadband services
Sixty Starlink satellites will be launched after the company’s 17th mission.
Shotwell reiterated earlier comments by the SpaceX leadership that Starlink is using the service of “giant operators AT&T, Comcast, etc.” does not want to replace, as the satellite Internet is “very complementary to the services they offer”.
“The Starlink system is best suited for highly dispersed rural or semi-rural populations,” said Shotwell.
Meanwhile, Shotwell said SpaceX’s challenge is to learn how to scale for consumer customers while “making sure we can build a reliable network”. But she added that none of these challenges were “that we cannot solve”.