SpaceX, the rocket company run by Elon Musk, has made a name for itself in the space launch services business, launching satellites at a much lower price than incumbents. However, its addressable market remains relatively small. The market for commercial satellite launches stood at ~$5 billion in 2017, with revenues projected to
grow to $7 billion by 2024 - giving the company relatively little room to expand given that launch revenues stood at roughly $2 billion last year.However, SpaceX could see much greater upside from Starlink, the satellite-based Internet that aims to provide Internet access worldwide in a cost-effective manner using a constellation of several thousand satellites. SpaceX President Gwynne Shotwell recently indicated that Starlink could start delivering Internet to customers by this summer. The company has also noted that Starlink is likely to be spun off into a separate entity that could be
taken public over the coming years.
In this analysis, we break down the potential subscriber base, revenues, and valuation for the new satellite-based Internet service by the year 2025. To arrive at our estimates we assume that:Starlink will come into commercial service from 2021, with coverage spanning a bulk of the global population by 2025. Starlink will primarily compete with fixed-line broadband services, as its receivers are expected to be somewhat large for truly portable use (likely