A month ago, Musk made claims and comments about Starlink, SpaceX’s satellite communications company, unveiling his future plans to create antennas for the use of trucks, RVs, ships, and even planes, to provide internet service to vehicles of a larger size. But added that cars would not make the cut due to the size of the antennas.
Currently, Musk uses the idle capacity of his rockets to launch waves of up to sixty satellites at one time. This process allows him to have 1,321 satellites in orbit at a significantly lower cost than what is typically associated with these types of operations. Though 12,000 have already been approved, there are roughly 30,000 licenses in current debates.
The satellites are positioned in orbit about sixty times closer to Earth than conventional satellites. And the closer proximity changes the usual approach to satellite communication, and allows it to offer internet access that is drastically faster in speed and relay, with the needed speed to still play competitive video games. With a closer position to the Earth, they are easier to see at night with the naked eye, regardless of the efforts made by the company to reduce the satellites’ luminosity. And can be effectively useful for activities that were otherwise outrageously expensive – until now.
Much like most of Musk’s projects, this is a classic case of leveraging the economies of scale that can be achieved at a later stage in growth. Thanks to SpaceX’s increasingly recycled rocket launches, the satellites can be launched with the potential of cost sharing. On the other hand, the anticipation of drastically reducing the size from the original “UFO on a stick” to the current models capable of being installed to vehicles that meet certain size requirements. The pricing model aligns with these parameters, with an initial connection equipment charge of $499, and a $99 fee each month for service. For users who may not have another option, this is an obvious choice. But the idea is to reduce its cost as scaling allows, which in turn makes it possible to be as competitive, if not more, than the many telecommunications companies in business today throughout the globe.
The U.S. military has taken interest in this concept and went as far as considering the use of Starlink’s constellation of satellites for a new alternative to the current GPS system.
A common misconception is that design changes and/or implementing new economies of scale doesn’t work, and that the rules in place of an industry or business cannot be changed. But if you think you knew everything there is to know about satellites and scaling, then you sorely underestimated Musk and his portfolio.