SpaceX currently sells its Starlink terminals to subscribers for $499 apiece. It takes a loss on each terminal sold, though it has managed to bring the cost of manufacturing them down from $3,000 to about $1,300. At the ongoing 36th Annual Space Symposium, SpaceX president Gwynn Shotwell says that it could cut the sale price of Starlink terminals to $250 by the end of the year, and then eventually to $125.
This price cut for the one-time fee for the equipment needed to access the satellite Internet service could cause the already impressive demand for Starlink to shoot up drastically. SpaceX already has a waitlist for access to Starlink that includes more than 500,000 potential subscribers in 12 countries who made a deposit for access. Apparently, it can only make the terminals so fast, and Shotwell cited the same shortage of semiconductor chips that is hitting the automotive industry so hard as one of the chief challenges in manufacturing them. Some areas like northern Virginia are already seeing wait times that could push back the delivery of residents’ terminals to 2023 if SpaceX doesn’t ramp up its production capacity.
SpaceX has also put a pause on launching new Starlink satellites in order to complete an upgrade to the satellites that it refers to as the Starlink Gen2 System in new regulatory filings. The upgrades include a new laser system that may also require an upgrade to the terminals. The company expects that it could resume launches of Starlink satellites in a few weeks, however.
The price reduction for terminals could be good news for residents of low-income regions who are eager to finally gain access reliable, affordable high-speed Internet. Elon Musk has said that SpaceX would be willing to consider a lower-cost monthly subscription plan for low-income customers even though it wouldn’t be based on the traditional speed tiers of other Internet service providers.
SpaceX has also worked with a few school districts, less advantaged communities, and even countries like Chile to provide early to Starlink for residents in low-income or isolated communities. This initiative has been praised for closing the “Digital Divide” and providing new online opportunities for these residents.
The main obstacles for delivery of Internet service to areas that have previously been left out by lack of investment in Internet infrastructure could be regulatory ones. While SpaceX says that it could have global coverage for Starlink by September, actual regulatory approval for providing Internet service would have to be done country by country. Russia has already said that it will fine residents who use Starlink rather than its state-owned satellite Internet service.
The upfront might have also seemed prohibitive to people living in some areas, but Shotwell expressed confidence that this could be addressed at the recent Space Symposium event: “We’ve made tremendous progress on the user terminal, but those are still expensive. But again, I think they’ll be about a quarter of the cost to us right now in maybe a year.”