Starlink IPO

[willow_hiller]

My only concern is the network quality during storms. If it works in the rain then I am in.

I'm far from an expert on this subject, but I had some concerns about this as well and did a little research. Evidently the current Starlink satellites operate in three different bands of frequencies called Ku, Ka, and V.

Ku is the lowest frequency of the three and as a result it is less suspectable to bad weather; but it also carries data at a slower rate than Ka and V. The current thinking is that Starlink will be modulating between all of the frequencies to try and provide the fastest speeds during storms.

Some more info on those particular frequencies here: https://pdfs.semanticscholar.org/c2f9/a83b6b2fedee1b4aee59fcf9d510896faeb9.pdf

 

[JRP3]

I'm assuming the IPO is going to be insane when it goes live. Getting another piece of Musk and a bit of SpaceX is probably going to drive the share price high on momentum buying. Are there any other previous IPO's which may have traded in a similar fashion to compare with?

 

[HG Wells]

Ok my only question is

How do I get in?

I assume only certain investors get offered the IPO. Then it goes to regular trading.

How do I increase my chances ?
Open new trading accounts ? Have X amount of funds with brokerage X ?
Stand on left foot while reciting the periodic table backwards ?

SEE

 

[VT_EE]

My only concern is the network quality during storms. If it works in the rain then I am in.

According to Wikipedia: It appears Starlink is utilizing Ku, Ka, and V band in numerous orbital shells to provide reliable service. The V band satellites are in the closest orbit and will provide the highest throughout (the gigabit speeds Musk talks about). Unfortunately, these will do terrible in any rain. Ka-band (Direct TV) gets bad in heavy rain, and Ku band should be fairly resilient although with much less throughput. Bottom line: you’ll have connectivity, but it gets significantly slower as the weather worsens.

 

[adiggs]

There are satellite internet providers today. You could sign up with one if you want to move before Starlink is available and switch later.

The area where I live has no cable. Until Verizon put in Fios about 3 years ago, I had a satellite internet connection. It was OK.

The current satellite internet won't work for me. For working from home, I need VPN service, and that needs a low latency connection. Streaming Netflix or other video works fine (as I understand it), but the long latency makes VPN unworkable.

 

[S3XY]

Currently paying $70/mo $840/year on internet only, even $600-700 a year is reasonable.

Yeah, you can tell that Mike is from the Europe. Meanwhile we get raped by monopolies.

 

[mobilesuit818]

Even if Starlink was free to the underdevelop countries to help connect the world, I would have no problem paying for service versus give money to the current infrastructure.

This is clearly competition at another level and this is what the market needs.

Most likely all the companies would be buying the service wholesale and to then resell.

Either way, take my money please.

 

[LN1_Casey]

I think starlink will be my next investment, if it becomes available to us minions.

 

[Cosmacelf]

People keep using very low monthly/yearly revenue estimates for Starlink customers. This will NOT compete with a $70/month urban fiber connection for many reasons. One is that it can't from a technical perspective. Fiber latencies are in the order of 2 - 4 ms. Starlink is 30 ms at best. BTW, current satellite Internet is around 500 ms.

Starlink will be competing against other current satellite Internet. For example (with my zip code), Viasat Exceed:

Viasat Plans & Pricing For 92067. Get Faster Internet & Save Big Today.

That's $200/month for a capped, crappy 100/3 Mbps service that gets congestion all the time. Starlink could sell their service for $300/month and bankrupt Viasat Exceed.

But they aren't going to do that, since Elon's companies always look to expand the market, not just compete in it. My guess is that they'll be offering service at around $125/month. So $1,500/yr revenue per customer for retail, and at around $3,000/yr for commercial (think oil rigs). Rural WISPs might want in too, in which case, revenue is even higher, but there won't be many of those left (Starlink may decimate the WISP market).

To really figure out their pricing, you'd have to do an analysis of market size, segments, etc.

 

[Zaxxon]

Typical Comcast latency is on the order of 10-20 ms. Moving to 30 ms would have exactly zero impact on 99% of customers.

$125 for a solid Starlink connection is quite competitive for a lot of folks.

 

[Cosmacelf]

BTW, one play is to short suppliers that supply the Wireless Internet Service Provider (WISP) market. WISPs are rural ISPs that deliver Internet via radio using small dish antennas on people's houses via some centralized tower or mountain top. They typically charge $150-$200/month and deliver 20-30 Mbps service. We don't know Starlink pricing, but, while WISP service usually is "fine" (unlike satellite Internet which is "crappy"), I suspect Starlink will decimate WISPs.

Ubiquiti (UI) is the only big public company WISP supplier that I know of, and they make a lot of their revenue from the WISP market (they, of course, sell lots of other stuff, including WiFi access points which is solid gear).

Anyways, shorting UI is one possible play. I won't be doing that since UI does have other revenue segments and they have innovative and agile management. Indeed, their recent product introductions can pretty much be read as a way to diversify away from the WISP market.

 

[bkp_duke]

People keep using very low monthly/yearly revenue estimates for Starlink customers. This will NOT compete with a $70/month urban fiber connection for many reasons. One is that it can't from a technical perspective. Fiber latencies are in the order of 2 - 4 ms. Starlink is 30 ms at best. BTW, current satellite Internet is around 500 ms.

Starlink will be competing against other current satellite Internet. For example (with my zip code), Viasat Exceed:

Viasat Plans & Pricing For 92067. Get Faster Internet & Save Big Today.

That's $200/month for a capped, crappy 100/3 Mbps service that gets congestion all the time. Starlink could sell their service for $300/month and bankrupt Viasat Exceed.

But they aren't going to do that, since Elon's companies always look to expand the market, not just compete in it. My guess is that they'll be offering service at around $125/month. So $1,500/yr revenue per customer for retail, and at around $3,000/yr for commercial (think oil rigs). Rural WISPs might want in too, in which case, revenue is even higher, but there won't be many of those left (Starlink may decimate the WISP market).

To really figure out their pricing, you'd have to do an analysis of market size, segments, etc.

They are also competing against the rural DSL carriers, cable internet providers, and the like. I would argue that this is more of their target audience, instead of current satellite users.

Your latency numbers are spot on (I'm in the industry). There is very little you cannot do with a 30-50ms latency that you can do with a 2-4ms latency. Gaming comes to mind, but even that is possible (just not optimal). The numbers actually compare on latency VERY well with DSL and cable (those systems add 30-100ms of latency at the "last mile" - the customer modem and connectivity circuits to the local junction box - which usually uses fiber back to a larger connection point).

 

[favo]

Elon Musk @elonmusk
Replying to @1DarknessSoul5 and @Spacex

Aiming for sub 20ms latency initially, sub 10ms over time, with much greater consistency than terrestrial links, as only ever a few hops to major data centers
2:58 AM · May 27, 2019

 

[Rarity]

Read what I posted above, not talking about the satellites themselves.

I read it. Perhaps you can try again to describe the scenario that you are worried about.

At the orbits of the initial shell of Starlinks satellites, debris is automatically flushed from orbit in as little as less than a year.

 

[mongo]

Fiber latencies are in the order of 2 - 4 ms. Starlink is 30 ms at best. BTW, current satellite Internet is around 500 ms.

2mS does not include the time to get to the server (unless co-located at the the ISP). Starlink bounces between sats and skips the slower terrestrial link. Starlink orbit is ~ 550km, round trip time to/from sat is sub 4mS if overhead.

 

[Cosmacelf]

2mS does not include the time to get to the server (unless co-located at the the ISP). Starlink bounces between sats and skips the slower terrestrial link. Starlink orbit is ~ 550km, round trip time to/from sat is sub 4mS if overhead.

Yes, my ping times to, say 8.8.8.8 are 4 ms with my good fiber connection, not 2 ms.

 

[mongo]

Yes, my ping times to, say 8.8.8.8 are 4 ms with my good fiber connection, not 2 ms.

And you're in San Diego, a metropolis in the same state as Google, of course your ping is low.
My 8.8.8.8 is... 8 mS from Michigan (office just got fiber) which shows Google's DNS is mirrored since Detroit to LA is 59mS.currently.
Ping time between Los Angeles and other cities - WonderNetwork

 

[M3BlueGeorgia]

That is one IPO I would stay away from. Overhead costs to maintain that constellation will be huge. There is also a lot of competition already planned, which will keep costs down. I think it makes sense to have SpaceX owning/running it given their incredibly cheap launch costs, but a stand alone company might not always get such a good deal.

Raising the fairly large amount of capital required by Starlink will be in 2 major future phases.

1) Over the next few months Starlink will get a big investment from private investors, which will allow it to deploy several thousand satellites and start up their ISP business

2) Once the business is proven, appears to be profitable (or on a path to profitability), and requires a boatload of investment to get to having tens of thousands of satellites, they will IPO

To achieve #1 at least cost to StarLink, these private investors will need an exit strategy for their investment, which the IPO will provide.

So the reason for the announcement of a future IPO is primarily to facilitate the raising of the (private) capital to get StarLink to that first viable stage, which also means the SpaceX - Starlink relationship switches to a vendor-customer relationship, which is very good for SpaceX's financial situation. Especially since SpaceX will still effectively be running the show.

Notes:
a) There may be a second or third round of private investment, depending on the viability of the IPO market at the point StarLink needs to start expanding beyond several thousand satellites.

b) The future investors who will make the most money on the IPO will be the people in this first large private financing round, though they are the ones taking the largest risk (ignoring the current SpaceX investors). This is the financing round to get into, IMHO

c) Because of Musk's well known aggravations with the stock market and Tesla, SpaceX needed to formally announce this future intention to seek an IPO, rather than just quietly assuring these private investors that there would an exit strategy for their investment.

 

[Cosmacelf]

Raising the fairly large amount of capital required by Starlink will be in 2 major future phases.

1) Over the next few months Starlink will get a big investment from private investors, which will allow it to deploy several thousand satellites and start up their ISP business

2) Once the business is proven, appears to be profitable (or on a path to profitability), and requires a boatload of investment to get to having tens of thousands of satellites, they will IPO

To achieve #1 at least cost to StarLink, these private investors will need an exit strategy for their investment, which the IPO will provide.

So the reason for the announcement of a future IPO is primarily to facilitate the raising of the (private) capital to get StarLink to that first viable stage, which also means the SpaceX - Starlink relationship switches to a vendor-customer relationship, which is very good for SpaceX's financial situation. Especially since SpaceX will still effectively be running the show.

Notes:
a) There may be a second or third round of private investment, depending on the viability of the IPO market at the point StarLink needs to start expanding beyond several thousand satellites.

b) The future investors who will make the most money on the IPO will be the people in this first large private financing round, though they are the ones taking the largest risk (ignoring the current SpaceX investors). This is the financing round to get into, IMHO

c) Because of Musk's well known aggravations with the stock market and Tesla, SpaceX needed to formally announce this future intention to seek an IPO, rather than just quietly assuring these private investors that there would an exit strategy for their investment.

Makes sense. Is this an educated guess on your part, or do you know this from....

 

[bkp_duke]

So, bear with me here, but I'm thinking of revenue potential beyond just home ISP. I'm sure this has been mentioned before in a Starlink thread (and is probably why Elon gets peppered by the banking types on putting starlink in cars). In theory, it's possible to shrink a satellite transceiver enough to fit into something just a little bit larger than a cell phone. It would be a device thicker than a cell phone, but still smaller than current Sat phones. This would open up 2nd and 3rd world countries with poor quality or expensive cellular systems to a voice and internet service from Starlink. Eventually we could be looking at IoT devices (the cell phone receptor in my SunPower system SUCKS - just as a quick thought) that are outside of covered cellular areas.

Starlink is something that should have a good number of traditional industries (ISPs, rural cell providers, alarm companies that charge outrageous rates for wireless connectivity, etc.) scared shitless.