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3 Takeaways From The SpaceX Starlink Beta Test

3 Takeaways From The SpaceX Starlink Beta Test

In the past couple of weeks, SpaceX has begun sending out invitations for users to beta test its Starlink low-earth orbit (LEO) internet service. On Thursday, DataTrek Research co-founder Jessica Rabe outlined three major takeaways from the Starlink beta test.

The primary goal of the Starlink service is to use a fleet of about 900 SpaceX satellites to bring high-speed broadband internet to parts of the world where it isn’t otherwise easily available. Beta testers have paid a one-time, up-front fee of $499 for equipment and a monthly fee of $99 to access the service. So far, user reviews on the internet have been largely positive.

Starlink Beta Takeaways: Rabe said Thursday that there are three early takeaways:

  1. Starlink represents “classic disruption.” Assuming the beta test continues to go smoothly, Rabe said she expects the service to eventually gain market share from traditional cable companies.
  2. Starlink could be a stable and sizable source of cash flow for SpaceX to tap to fund its expensive research and space exploration projects. Starlink revenue will likely play an important role in valuing SpaceX if and when the company decides to go public.
  3. Lowering Starlink’s cost will be a critical part of leveraging the company’s first-mover advantage over competing satellite internet fleets, such as Project Kuiper by, Inc. (NASDAQ: AMZN). Cost will likely play a key role in Starlink’s long-term success.

“The company is trying to gain rural-internet subsidies from the U.S. government, but Starlink’s ultimate success will come down to lowering the terminal cost and ramping up subscriber growth,” Rabe said.

Benzinga’s Take: Tesla Inc. (NASDAQ: TSLA) investors have been following Elon Musk’s SpaceX closely, although they will not have an opportunity to invest directly in the company until it goes public. Tesla appears well on its way to being a significant player in the global auto industry, and SpaceX may end up playing a similar role in disrupting the global internet service business.

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