SpaceX Ends Subsidy on Starlink Antennas, Boosting Profitability

SpaceX has ceased subsidizing the cost of its Starlink antennas, a move aimed at improving the company’s profitability, according to Jonathan Hofeller, SpaceX’s Vice President of Starlink and Commercial Sales.

Speaking at the World Satellite Business Week conference, Hofeller revealed that the company has made significant strides in reducing the manufacturing costs of the antennas, also known as user terminals, reports CNBC.

Initially, the terminals cost about $3,000 each to produce. By early 2021, this figure had been reduced to approximately $1,300. Hofeller’s recent comments indicate that the cost has now dropped to less than $600 per terminal. The consumer antennas are sold for $599 each, while specialized antennas for mobile, maritime, or aviation users range from $2,500 to $150,000.

The decision to end the subsidy comes after SpaceX President and COO Gwynne Shotwell announced that Starlink had a “cash flow positive quarter” in 2022. The overall company reportedly turned a profit in the first quarter of 2023. Despite being valued at about $150 billion, SpaceX’s capital-intensive operations had previously led Elon Musk to describe Starlink as going through “a deep chasm of negative cash flow.”

Hofeller did not provide updated figures on Starlink’s global user base but stated that the service has well over the 1.5 million customers it reported in May. The customer base includes both consumer and enterprise clients worldwide, which the company aims to grow “to hopefully millions and millions.”

In related news, European satellite operator SES announced a partnership with Starlink to jointly offer communication services to cruise ships, a market both companies currently serve. The collaboration is expected to expand into other market offerings in the future. To date, SpaceX has launched over 5,000 Starlink satellites and is currently launching at a rate of twice a week.