That’s the main problem, yes. Starlink is not going to be useful to anybody living in a city. There’s no need for expensive, low-grade Internet when you can for a fraction of the price just get physical connection. I mean … your apartment building is not going anywhere anytime soon, right? So that’s 60% of your prospective market gone. (The people who travel and want to use it, and the weirdos who orally service Kaptain Ketamine, are a tiny fraction of a tiny fraction of the market size Starlink needs to pay for operations so they can be ignored for analysis.)
So about 40% of the planet lives in rural areas, and that’s the only market of any size that’s going to be a credible one for Starlink. The people who live on the edges of that already have technology available to connect. My uncle, living way off in the boondocks near Vanderhoof, for example, has a direct microwave link. He’s not going to be using Starlink; it’s literally an order of magnitude more costly than what he’s got. Similarly most of mainland China (well in excess of 80%) has 5G coverage with 100% coverage due by the end of the 2025. That’s a sizable chunk of that rural market gone too! So cut away that 40% to … let’s be generous and say 20%. (I’d actually guess closer to 15%.) That’s who’s left for needing a Starlink-like service.
But that’s not the only problem …
Oopsie! It turns out that worldwide about 10% of the world’s money rests in rural areas. (In the USA it’s actually closer to 8.5%, but let’s be generous again. It won’t matter.) The very people who would be the target market for Starlink can’t afford Starlink. So even if all of the 40% rural inhabitants around the world had to use Starlink, most of them wouldn’t because it’s too expensive. And Starlink’s prices aren’t dropping; they’re doing the opposite.
In the mean time, as shown in China, the alternatives aren’t sitting there idle. While Starlink balloons its operational costs and maintenance costs, other countries are also spreading 5G coverage, or microwave relay coverage, or fibre networks, or, or, or. They’re going to cut into Starlink’s revenue either by taking customers away or forcing prices down.
That’s the main problem, yes. Starlink is not going to be useful to anybody living in a city. There’s no need for expensive, low-grade Internet when you can for a fraction of the price just get physical connection. I mean … your apartment building is not going anywhere anytime soon, right? So that’s 60% of your prospective market gone. (The people who travel and want to use it, and the weirdos who orally service Kaptain Ketamine, are a tiny fraction of a tiny fraction of the market size Starlink needs to pay for operations so they can be ignored for analysis.)
So about 40% of the planet lives in rural areas, and that’s the only market of any size that’s going to be a credible one for Starlink. The people who live on the edges of that already have technology available to connect. My uncle, living way off in the boondocks near Vanderhoof, for example, has a direct microwave link. He’s not going to be using Starlink; it’s literally an order of magnitude more costly than what he’s got. Similarly most of mainland China (well in excess of 80%) has 5G coverage with 100% coverage due by the end of the 2025. That’s a sizable chunk of that rural market gone too! So cut away that 40% to … let’s be generous and say 20%. (I’d actually guess closer to 15%.) That’s who’s left for needing a Starlink-like service.
But that’s not the only problem …
Oopsie! It turns out that worldwide about 10% of the world’s money rests in rural areas. (In the USA it’s actually closer to 8.5%, but let’s be generous again. It won’t matter.) The very people who would be the target market for Starlink can’t afford Starlink. So even if all of the 40% rural inhabitants around the world had to use Starlink, most of them wouldn’t because it’s too expensive. And Starlink’s prices aren’t dropping; they’re doing the opposite.
In the mean time, as shown in China, the alternatives aren’t sitting there idle. While Starlink balloons its operational costs and maintenance costs, other countries are also spreading 5G coverage, or microwave relay coverage, or fibre networks, or, or, or. They’re going to cut into Starlink’s revenue either by taking customers away or forcing prices down.
Starlink is not a viable business.