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SpaceX does not plan to spin-off Starlink into a separate company —'We're thinking about that zero'

by Evelyn Arevalo March 11, 2020

SpaceX does not plan to spin-off Starlink into a separate company —'We're thinking about that zero'

Featured Image Source: Starlink

SpaceX, the rocket company founded by Elon Musk, aims to further fund its space program by offering satellite broadband internet. SpaceX has been actively launching batches of 60 Starlink satellites atop Falcon 9 rockets for the last months. So far, the company has deployed about 300 satellites out of the 12,000 that will make up the network. Early February, Bloomberg reported that SpaceX President and Chief Operating Officer Gwynne Shotwell told investors, at a private investor conference hosted by JPMorgan Chase, that SpaceX could spin-off Starlink into a separate public company and pursue an IPO. “That particular piece is an element of the business that we are likely to spin out and go public,” Shotwell said, according to Bloomberg. “Right now, we are a private company, but Starlink is the right kind of business that we can go ahead and take public.”

This week, during a fireside chat at the Satellite 2020 conference in Washington D.C. Musk shared that SpaceX has no active plans to spin-off Starlink into a separate business, he said on March 9:

“We're thinking about that zero.” 

So currently, they are not planning in spinning out Starlink from SpaceX any time soon. Musk stated that they are mainly focused on developing a successful Starlink network. "We need to make the thing work," he said - in reference to several telecommunication companies (like Iridium, Globalstar, Orbcomm and Teledesic) who attempted to build satellite constellations in low Earth orbit and went bankrupt at some point. He told the conference moderator:

“Guess how many LEO constellations didn’t go bankrupt? Zero.” 

SpaceX wants to make sure that Starlink won't go bankrupt. “I mean it’s really important to set the stage here for [low Earth orbit] communications constellations." He added -

“That would be a big step, to have more than zero in the not bankrupt category."

During the conference, he assured that Starlink would not compete with other telecommunication (telecos) and internet providing companies. “It’s not some huge threat to telcos,” he said. “I want to be super-clear: It is not. In fact, it will be helpful to telcos, because Starlink will serve the hardest-to-serve customers that telcos otherwise have trouble dealing with.”

“Starlink will effectively serve the 3% or 4% hardest to reach customers for telcos, or people who simply have no connectivity right now, or their connectivity is really bad.”

Starlink will be capable of beaming high-speed internet from space to areas across the world where connectivity is unreliable or non-existent. It will benefit many individuals who live in rural and remote areas.

SpaceX plans to use Starlink's revenue to launch a fleet of Starships to Mars and transform humans into a multi-planet species. The rocket company’s aspirational goal is to build a self-sustainable city on the Red Planet by the year 2050. Musk said:
"The whole purpose of SpaceX is really to help make life multi-planetary... But the revenue potential of launching satellites to the space station.. that taps out about $3 billion dollars a year. But I think providing broadband is more like an order of magnitude more than that, probably $30 billion a year as a rough approximation."

The Vice President of Starlink commercial sales, Jonathan Hofeller, previously stated that SpaceX is manufacturing 6 Starlink satellites per day. The next deployment of 60 Starlink satellites is slated for March 15. SpaceX aims to deploy satellites at least twice a month in order to roll-out Starlink internet service in parts of Northern United States and Canada before the year ends.



 




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