A Consultant’s View of Starlink’s Business Model

In February 2021, Starlink announced that it had amassed over 10,000 users. Starlink is a division within SpaceX that provides Wi-Fi to its users across North America and Europe through satellites. Starlink’s business model hinges on the cost-effectiveness and quality of using thousands of satellites to make the internet easily accessible – both across dense urban and sparse rural areas.

Starlinks Business Model, starlink

Starlink’s Market Penetration

The market penetration for Starlink is estimated to be 0.1% of all internet users by the end of 2021, and is expected to grow to up to 2.3% of the world’s total internet user base by 2025. Estimates are that the total user base could grow to 14.4 million by 2025.

The internet service is expected to be a hit especially in areas where the internet is not easily accessible. The company has launched more than 1000 satellites, with more in progress. The notable growth in users for the beta version shows positive signs for the business.

Customers are charged $99/month for the beta version of Starlink along with an initial set-up fee of $500. The bandwidth for the beta version is between 50 to 150 MB. This makes Starlink pricier and slower than other options, but the goal is to improve with more satellites and government grants.

While Starlink launched its internet service in beta form in October 2020, it also plans to provide voice and emergency line services through the government’s Lifeline program. These plans were laid out in Starlink’s petition to the Federal Communications Commission for designation as an Eligible Telecommunications Carrier (ETC) under the Communications Act. Through the Lifeline program, the plans will be inexpensive for people with low incomes, for which Starlink has won $886 million in U.S. federal funding.

What the Future Holds for Starlink

With the increase of the global population and the importance of the internet, the future looks bright for Starlink. However, with the rise of 5G services, Starlink will face fierce competition on multiple fronts – price, speed and reliability. Another potential threat to Starlink is Amazon’s announcement of its interest in the space. Furthermore, Starlink operates in a heavily regulated industry. Even though the company foresees a positive response from DC, implementing Starlink’s business model will be a challenge not only technically, but politically.


Demand for Starlink seems to be strong. This is illustrated by the fact that nearly 700,000 people paid to join a waitlist in the US, and also by the 10,000-plus participants in the public beta. The company is planning to attract more government funding along with the investments it has already made. Will Starlink catch fire with the masses? It’s hard to tell, but we look forward to seeing what Elon Musk and his company cook up in the near future.

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