SpaceX no longer takes losses to produce Starlink space antennas

PARIS — Elon Musk’s SpaceX will no longer bear the cost of the Starlink antennas it sells with its satellite internet service, a company executive said Wednesday, a key move for the company to improve its profitability.

“We used to support terminals but we have duplicated our terminal production so much that we no longer support terminals, which is a good place to be,” Jonathan Hoefeller, SpaceX’s vice president of Starlink and commercial sales, said during a press conference. A discussion session at the World Satellite Business Week conference.

SpaceX sells Starlink antennas to consumers, also known as user terminals, for $599 each. For Starlink’s more demanding customers — such as mobile, marine or aviation users — SpaceX sells antennas with its service in the range of $2,500 to $150,000 each.

When SpaceX first started selling its Starlink service, company leadership said each station cost about $3,000 to manufacture. The company has improved that to about $1,300 per station by early 2021, and Hofeller’s comments on Wednesday indicate that each of the stations now costs less than $600 to set up — a mass production savings that Hofeller credited as “one of the keys to our success.”

SpaceX President and COO Gwynne Shotwell said earlier this year that Starlink “had a positive quarter of cash flow” in 2022. The company overall reportedly turned a profit in the first quarter of 2023.

Although founded more than two decades ago and valued at about $150 billion, SpaceX’s rocket, spacecraft and satellite businesses are capital-intensive. In 2021, Musk said Starlink was going through a “deep hole of negative cash flow” before becoming “financially viable.”

The company last provided an update to its global Starlink user base in May, when it said it had about 1.5 million customers. Hofeller did not specify what that total is now, but he said Starlink has “far exceeded” the 1.5 million mark. This number includes consumer and business customers around the world, with Hofeller saying the service aims to “grow into the millions and millions, we hope.”

To date, SpaceX has launched more than 5,000 Starlink satellites and counting.

“We’re going strong, going twice a week now — which is crazy,” Hofeller said.

Earlier on Wednesday, European satellite operator SES announced a partnership with Starlink to jointly sell its communications services to cruise ships, a market the two companies currently serve. This arrangement is one that the companies expect to build on with subsequent market offerings, SES CEO Ruy Pinto said.