SpaceX’s Starlink high-speed internet service generated $1.4 billion in revenue in 2022, according to documents viewed by the Wall Street Journal. This is a significant increase from the $222 million in revenue reported in 2021. However, the records also indicate that SpaceX reported an overall loss for Starlink in 2022, with a slim profit in the first quarter.
The aerospace company’s initial projections for Starlink were ambitious. In a 2015 presentation to SpaceX investors, it was forecasted that the satellite internet services would bring in nearly $12 billion in revenue and $7 billion in operating profit by 2022. Additionally, SpaceX expected to have over a million active subscribers by last year, and it reached 1.5 million customers earlier in 2023.
However, consumer uptake of Starlink has been slower than anticipated. The majority of potential subscribers, who are located in cities and can afford high-speed broadband, already have readily available and cheaper options for internet service that don’t require specialized equipment. This has been a challenge for Starlink.
One of the main factors limiting the uptake of satellite internet is the high costs and poor performance. To address this, SpaceX has implemented a low Earth orbit satellite constellation for improved performance, and they have also decreased the prices of Starlink terminals to manage hardware costs.
According to Jonathan Hofeller, SpaceX’s Vice President of Starlink, the company is no longer losing money on producing Starlink terminals. Mass-producing these terminals has been a key factor in their success. Hofeller mentioned during a conference that they have been iterating on terminal production, and they have reached a point where they are no longer subsidizing terminals.
Overall, while Starlink has seen significant revenue growth, it still faces challenges in expanding its subscriber base due to competition and cost-effectiveness. However, SpaceX remains optimistic and continues to invest in improving the performance and affordability of its satellite internet service.