On Saturday, Oct. 24, SpaceX crossed the finish line, achieving the 800 Starlink broadband internet satellites in orbit it needed to offer “moderate” internet coverage to large portions of Earth’s surface. Just two days later, the company officially opened up Starlink to “beta” subscribers, advertising 50Mb/s to 150Mb/s broadband internet service for prices as low as $99 a month (plus a $499 hardware fee).
Demand for the new service in the U.S. has reportedly been brisk, and demand in Canada is about to get even brisker — because just this month, regulators approved Starlink to offer internet service in Canada as well.
Well, how aboot that?
Yes indeed, in a tweet heard all around the northern hemisphere, on Nov. 6 Canada’s Innovation, Science and Economic Development (ISED) Ministry announced that it has granted “regulatory approval for the @SpaceXStarlink low Earth orbit satellite constellation.”
How important is this to Canada, and is $99 for as little as 50 mbps internet speeds really a good deal? With Comcast offering 200 mbps for under $50 in metro locales in the U.S. you might not think so, but here’s the thing: Listening in on tweets from elated Canadian (future) customers, and hearing their lamentations about being forced to pay, for example, $46 a month (presumably Canadian) for 6 mbps, $75 for 5 mbps, or even $95 for a measly 2 mbps, it’s pretty clear that the service Starlink is offering will be a big improvement for a lot of rural users.
What’s more, in an effort to win a $16 billion rural broadband contract from the FCC, SpaceX is working hard to get its speeds up to 1 gigabyte per second — as much as a 20x improvement over the initial capabilities of the beta service.
In the meantime, Canada is a logical market for SpaceX to target with the limited number of satellites it has in orbit (the company wants to eventually put up 12,000 satellites) and bring in some revenue to finance its expansion. Although SpaceX is promising “near global coverage of the populated world” by 2021, the Starlink website explains that, because of where the initial deployment of Starlink satellites are orbiting, SpaceX can really only offer internet coverage to “the Northern U.S. and Canada in 2020.”
That’s a-OK with Canada, however, which is happy to take SpaceX up on its offer. As ISED Minister Navdeep Bains explained, “our government recognizes that high-speed Internet access is no longer a luxury — it is essential.”
Local media began reporting this week on invitations to participate in the beta program going out to Canadian customers. According to these reports, SpaceX is offering Canadians almost exactly the same service price it’s offering in the U.S. — C$129 (about $98 U.S.) for the service itself, and C$649 ($495 U.S.) for the hardware. And Musk recently tweeted out a promised “big expansion” of the service in Canada “in 6 to 8 weeks.”
What it means to SpaceX — and investors
Even such relatively small numbers could add up to big business for SpaceX, however, and a big opportunity for investors. As internal SpaceX documents show, the company hopes to reap as much as $4 billion in annual revenue from Starlink subscriptions as early as next year, and grow that revenue haul to $22 billion annually by 2025, at operating profit margins as high as 60%.
This implies that within just a few years, Starlink — which created no revenue as recently as last year — could grow into a $13 billion profit machine. Oh, and here’s the best part: SpaceX plans to IPO Starlink so that you can own a part of it. The COO said so herself.