SpaceX started accepting preorders for its Starlink satellite internet service late on Monday, as the company broadens its beta program to “a limited number of users per coverage area.” Members of the public can now enter their home address and put down $99 for an antenna-router bundle that Starlink’s website says will ship “on a first-come, first-served basis,” depending on location.
The $99 deposits are fully refundable and “may take 6 months or more to fulfill,” the website says. Some locations entered on the website return a notice saying coverage won’t be available until “mid to late 2021,” while some say 2022. The full Starlink kit costs $499 and includes a mountable pizza-sized dish antenna, Wi-Fi router, and power supply.
The expansion comes as SpaceX reports a user base of roughly 10,000 from the invite-only “Better Than Nothing” beta period it started last year and a mix of ongoing pilot partnerships with local governments around the United States. SpaceX also has regulatory approval to operate in Canada and the UK, with plans to expand globally. The company has launched over 1,000 satellites into low-Earth orbit and is racing to make Starlink a profitable consumer-focused business line, and its revenue would help fund SpaceX CEO Elon Musk’s Mars rocket Starship.
The Starlink deposit idea follows a familiar model from Musk’s Tesla playbook: the electric car company has invited potential customers to preorder cars that aren’t fully available yet, collecting cash from modest, refundable down payments to help shore up the company’s balance sheet. The fine print on Starlink’s website says placing a deposit “does not guarantee that the Starlink Kit and Services will be available to you.” It books potential customers a priority spot for whenever Starlink becomes available in their region.
SpaceX needs to pass through a deep chasm of negative cash flow over the next year or so to make Starlink financially viable. Every new satellite constellation in history has gone bankrupt. We hope to be the first that does not.
— Elon Musk (@elonmusk) February 9, 2021
As the preorder update went live on Monday, Musk tweeted, “once we can predict cash flow reasonably well, Starlink will IPO” — floating the same prospect of splitting off and going public that SpaceX president and COO Gwynne Shotwell told a crowd of investors last year.
“SpaceX needs to pass through a deep chasm of negative cash flow over the next year or so to make Starlink financially viable,” Musk tweeted Monday, responding to a Twitter user questioning Starlink’s price. “Every new satellite constellation in history has gone bankrupt. We hope to be the first that does not.”
SpaceX’s Starlink deployment is far ahead of rival networks planned by Jeff Bezos’ Amazon Kuiper project and Canadian telecoms operator Telesat. Telesat’s Lightspeed constellation will launch in 2023, with plans to offer broadband internet to a key government and corporate customer base. Bezos’ Kuiper constellation, a proposed network of over 3,000 satellites that have yet to reach space, is expected to compete with SpaceX for both consumer and government customers.
Both Musk and Bezos have pledged to invest $10 billion into their respective satellite constellations, cementing a head-to-head competition for a slice of the lucrative telecoms market. Officials with Starlink, Kuiper, and other networks have been sparring for months in regulatory filings over spectrum rights and orbital safety issues, with Musk’s ire at Bezos’ network spilling out in the open last month.
Musk hasn’t shied away from admitting his Starlink business faces steep challenges ahead. In 2020, after Shotwell first floated the IPO plans, Musk pushed back on questions about the timing of a public filing, saying SpaceX is “thinking about that zero,” and “we need to make the thing work.” On Monday, Musk tweeted that “Starlink is a staggeringly difficult technical & economic endeavor.”
“However, if we don’t fail, the cost to end users will improve every year,” he said.