Read on Twitter
I seem to remember the last time that I heard a similar message to this from a similar source . . . https://twitter.com/elonmusk/status/1359024384200101888
So let's ask ourselves the question :
"What might it take for Starlink to generate $1 billion in Operating Cash Flow ?"
1. Monthly Subscription = $100 = $1,200 per year
2. One million Subscribers = $1.2 billion per year
"What might it take for Starlink to generate $1 billion in Operating Cash Flow ?"
1. Monthly Subscription = $100 = $1,200 per year
2. One million Subscribers = $1.2 billion per year
3. Let us assume that direct cash operating costs for the network will run at $200 million per year at initial scale
4. So 1 million Subscribers = $1 billion of Operating Cash Flow
4. So 1 million Subscribers = $1 billion of Operating Cash Flow
5. IMHO and without further knowledge or analysis of the costs, this level of Subscribers would appear to signal strong evidence of a viable business
6. Now let us note that there are 7,800 million people in the world, growing to 10,500 million in the future
6. Now let us note that there are 7,800 million people in the world, growing to 10,500 million in the future
7. A remarkably large number of them are absolutely candidates for Starlink's services
- geographically covered by the network
- currently high-speed service-deprived
- geographically covered by the network
- currently high-speed service-deprived
8. And these are predominantly young people eager to access the bigger world and hungry to learn and grow through exposure to more information and educational resources
- with 1,250 million of them becoming young adults during the next decade
- with 1,250 million of them becoming young adults during the next decade
9. The Human Addressable Market HAM is HUGE
10. Now let us assume that under initial operating conditions one Starlink dish might serve 10 individuals through local networking by WiFi or other means
- thus reducing the initial market to 780 million "Points Of Light"
10. Now let us assume that under initial operating conditions one Starlink dish might serve 10 individuals through local networking by WiFi or other means
- thus reducing the initial market to 780 million "Points Of Light"
11. And let us assume that about 1% penetration of this initial market is achieved by 2031
- hence about 8 million visible Subscribers
- hence about 8 million visible Subscribers
12. This would appear to translate into something greater than $8 billion of annual Operating Cash Flow
- or probably something similar to the size of Tesla's 2021 Operating Cash Flow
- but with a lot less Operating Costs and Overheads
- and less complexity
- or probably something similar to the size of Tesla's 2021 Operating Cash Flow
- but with a lot less Operating Costs and Overheads
- and less complexity
13. Instead, the main cost will be the Capital Expenditures necessary to make the hardware and get the satellites into orbit
- those costs are continuously coming down
- leaving us with the question of how long the replacement cycle will be
- those costs are continuously coming down
- leaving us with the question of how long the replacement cycle will be
