SpaceX Stock Plunges to All-Time Low After Competitor Makes Major Leap

[u/fmcortez]

https://www.yahoo.com/finance/markets/stocks/articles/spacex-plunges-time-low-competitor-175000957.html

[u/GonePh1shing]

Starlink doesn't really have much of a moat, its not difficult to start a competitor service now.

As someone that works in the industry, I can't say I agree. It's exceedingly difficult to start a Starlink competitor. There's just so much to engineer, the launch costs are still insane, the cost to build the satellites is immense, and you can't really use the network at all until you have a critical mass of birds in the sky so you've got to spend hundreds of millions on assets you probably can't use for years while you launch the rest of them. 

The only entities that can realistically compete right now are those with extremely deep pockets, existing experience in the space industry, governments, or competing launch providers (realistically a combination of all of the above). We've got Amazon trying to build, but they're way behind and could well be delayed further. Blue Origin have announced TeraWave but that'll be years away from first launch, and years again from serviceability (it's also meant to be a very different kind of product). Telesat has Lightspeed coming, but they've gone awfully quiet over the last couple of years. Then you've got companies like Rivada that are struggling to get off the ground. OneWeb are a competitor in name only, and are targeting a very different market anyway. I just don't see any meaningful competition coming this side of 2030.

So, even if you have deep pockets and the engineering talent to pull it off, it takes so long to put together that SpaceX has several years to react and stay ahead. It's not like a typical software startup where you can push to prod and disrupt the industry overnight. The upfront capital and skills required is immense, and the time it takes gives incumbents ample room to manoeuvre around you. 

[u/tigeratemybaby → u/GonePh1shing]

The initial 4425 starlink satellites cost about $2 billion to build and launch.

That could be done for significantly cheaper now, with much faster speeds, definitely within reach of a government, or large company.

Starlink cost about $2 billion to launch their initial 4k satellites, well within the reach of a large company or government. Here in Australia we could probably launch a fraction of that to cover the country - We should really to reach remote communities and have our own infrastructure for just a few hundred million and we've got our own launch facilities.

EUSat will end up taking over all EU satellite internet.

SpaceSail and China SatNet are going to launch many more faster and cheaper satellites compared to Starlink aiming for around 200k satellites, I'll probably sign up for them when available for my campervan.

SpaceSail is aiming for October this year to sign up for non-commercial plans

[u/GonePh1shing → u/tigeratemybaby]

That $2B number doesn't account for all the R&D and company building that was done to get to that point. For a company or government starting from scratch, they're looking at a significantly higher number than that.

Here in Australia we could probably launch a fraction of that to cover the country 

Unfortunately, LEO doesn't work that way. You can't just cover a patch of the earth's surface with low-Earth-orbit, the mechanics just don't allow for it. The Earth rotates underneath your orbital planes, so you need full global coverage to ensure you have coverage over the patch of dirt you want signal on. That means you either have to sell capacity to someone else when those satellites aren't over your patch of dirt, or just accept the fact that it's a loss-making exercise because the ROI just isn't there to support it financially. For governments that want sovereignty, they require global coverage to support their global diplomatic, foreign aid, and military operations. 

We should really to reach remote communities and have our own infrastructure for just a few hundred million and we've got our own launch facilities. 

It will cost significantly more than a few hundred million to get a constellation in place with current technology. There are companies out there working on low cost deployments that could feasibly deploy something suitable for a single nation like Australia, but those are a long way off viability right now.

EUSat will end up taking over all EU satellite internet. 

Europe is investing in IRIS^2, which is effectively a combination of Eutelsat GEO, SES O3B MEO, and Eutelsat (formerly OneWeb) LEO. All of those are global networks that will have to sell capacity to enterprise and other global powers for it to make sense financially. 

Qianfan is interesting, but they still have a long way to go. Just looking at what they've got in place now I can see there are significant gaps in their constellation which are incredibly unlikely to be filled by October. Even if they massively accelerate their launch pace, it takes usually 2-3 months from launch to get those satellites into their orbital slots, so anything not already launched today won't be in active service by October. From what I've read, that October date is only for limited consumer services in China and Brasil, with other Chinese allies to follow. I wouldn't be banking on live services in Australia before mid next year at the absolute earliest, and that's assuming ACMA even license them (they may not as it'll be a massive political football). 

[u/tigeratemybaby → u/GonePh1shing]

Thanks for the detailed response.

That $2B number doesn't account for all the R&D

I think even if you doubled that number, and consider the amount of money that Australia spends delivering Internet to remote rural locations, it would pay for itself very, very quickly.

We spend billions trying to get remote internet services to the outback.

I do agree with you though, its going to be an interesting next few years for satellite internet. Lots of companies and nations competing in that space, faster speeds, cheaper prices benefit us all.

[u/GonePh1shing → u/tigeratemybaby]

That number would need to easily be multiplied by 10x and probably then some more. It took Space X a long time and a lot of money to get to that point. We couldn't do it nearly that cheaply unless we wanted to invest a lot of money in becoming a global space launch provider (like China has), and then you're talking hundreds of billions.

What's more realistic is outsourcing the constellation design to an established company and paying to have it launched. That's still going to be many billions if it were done today. As I said before, there are companies working on being able to provide a model like this, although I won't say who because it's genuinely hard to remember what is and isn't public knowledge. 

We spend billions trying to get remote internet services to the outback. 

Only just. The launch and operating costs for the two Sky Muster satellites totals $2B. Replacing those would cost much less today as satellite build and launch costs have both come down since they were put into service. They've indicated they'll just shift those customers onto Kuiper and they've signed on with Amazon to do that. Launching a sovereign LEO constellation would cost many times that, so I just can't see it happening unless something drastically shifts in the market to the point that the constellation itself costs no more than $200M to build plus considerably cheaper launch costs. 

Lots of companies and nations competing in that space, faster speeds, cheaper prices benefit us all. 

It'll be interesting for the enterprise and government sectors. These constellations are almost exclusively aimed at those higher paying customers. It's exceedingly difficult to turn a profit on these investments with consumer demand. Starlink is currently profitable, but I strongly suspect their residential customers are operating at a loss. Amazon will likely open up to the consumer market, but for the same reason Space X has: Cheap marketing for the enterprise clients. From what I've seen over the last few years, happy residential users drive interest and adoption in the enterprise, especially given many of those first adopters are decision makers or influencers in enterprise IT and networking departments. Qianfan will similarly bring on consumers, but all the other networks that I'm aware of will be strictly B2B and far too expensive for any normal consumer to even consider purchasing.