No plan for tiered Starlink internet pricing

SpaceX President Gwynne Shotwell does not think the company will add “tiered pricing” for its direct-to-consumer Starlink satellite Internet, currently on offer for $ 99 per month with limited early access.

“I don’t think we’re going to offer tiered pricing to consumers. We’re going to try to keep it as simple and transparent as possible, so at this point there are no plans to choose more tiers for consumers,” Shotwell said. , speaking at the Satellite 2021 “LEO Digital Forum” on a virtual panel on Tuesday.

In a tiered pricing system, what the customer pays is based on the service level he or she chooses.

Starlink is the company’s capital-intensive project to build an interconnected Internet network of thousands of satellites, known in the space industry as a constellation, designed to deliver high-speed Internet to consumers around the world.

The company has launched more than 1,200 satellites into orbit to date.

In October, SpaceX began rolling out an early Starlink service in a public beta now available to customers in the US, Canada, UK, Germany, and New Zealand – with a service costing $ 99 per month in the US , in addition to the upfront costs. for the equipment needed to connect to the satellites.

Elon Musk’s company has continued to expand Starlink’s service, with the public beta gaining more than 10,000 users in the first three months. Shotwell noted that SpaceX “has no time frame to get out of beta,” and said the company still “has a lot of work to do to make the network reliable.”

Musk’s company plans to expand Starlink beyond just homes, asking the FCC to extend its connectivity authorization to “moving vehicles” so that the service can be used for everything from airplanes to ships to large trucks. .

For now, SpaceX focuses on serving customers in rural and hard-to-reach areas, with Shotwell saying Starlink “will be able to serve every rural household in the United States,” or “approximately 60 million people.” While SpaceX is adding service to other countries, Shotwell said SpaceX is initially targeting the US “because they speak English and they are close by, and if they have a problem with their dish, we can get one shipped quickly.”

“But we definitely want to expand this opportunity beyond the US and Canada,” Shotwell added.

A major obstacle for Starlink, as well as for any satellite-based broadband service, is the cost of the user terminals – the equipment on the ground that connects customers to the network.

Shotwell said SpaceX has made “great strides in lowering the cost” of the Starlink user terminal, which was originally about $ 3,000 each. She said the terminals now cost less than $ 1,500 and SpaceX “just rolled out a new version that saved about $ 200 in costs.”

That means SpaceX will absorb about two-thirds of the cost of the terminals as the company charges beta customers $ 499 up front for a user terminal. Musk said earlier this year that Starlink “must pass a deep negative cash flow gap,” a significant portion of which is expected to be due to the cost of the user terminals.

While SpaceX doesn’t charge its customers for the full cost of the terminals so far, Shotwell said the company expects costs to fall to “the range of a few hundred dollars” within the next two years.

Shotwell reiterated previous comments from the SpaceX leadership that Starlink does not intend to use the service of “giant providers AT&T, Comcast, etc.” To be replaced, as she noted that its satellite Internet is “very complementary to the services they provide”.

“The Starlink system is best suited for highly dispersed rural or semi-rural populations,” Shotwell said.

In the meantime, Shotwell said SpaceX’s challenge is to learn to scale for consumer customers while “ensuring that we can build a reliable network.” But, she added, none of these are challenges “we can’t solve.”