Why is Starlink Internet So Expensive?

Starlink is the fastest-growing satellite internet provider globally and is a product of SpaceX.

Starlink isn’t a replacement for cable internets such as Comcast, Spectrum, or Optimum. But its primary competitor is HughesNet, Viasat, and other satellite internet providers.

Even Elon Musk — founder of SpaceX — has repeatedly said that Starlink is only meant to provide internet in rural areas where it’s too expensive to provide internet via cable. 

Laying out cable or fiber optic in a densely populated area is profitable. But in rural areas where people live too far from each other, providing internet through cable is unprofitable.

According to an FCC report, 19 million Americans still don’t have broadband internet in their homes. And in rural America, 14.4 million people lack high-speed internet service. Globally, millions of people don’t have access to the internet due to infrastructure issues.

It’s why satellite internet exists. Currently, HughesNet and Viasat use geostationary satellites placed 22,236 miles (35,785km) above the earth to beam down the internet. However, as these satellites are too far from the ground, the internet speed is painfully slow.

Moreover, Geo satellites and rockets’ lunch costs are incredibly high — more than 100 million dollars. Thus, HughesNet and Viasat try to maximize their profit by launching fewer satellites but taking too many customers.

It’s why Elon Musk and SpaceX started the Starlink internet. SpaceX has engineering prowess in designing satellites and has reusable rockets to lower launch costs. Still, each satellite and SpaceX rocket launch costs millions of dollars.

Compared to cable internet, Starlink is expensive. 

Comcast, Spectrum provides high-speed internet with 400-500 Mbps down for less than $100 in most cities and towns. Most of the time, there’s no upfront setup cost. 

However, the initial setup cost of Starlink is substantially high. The antenna and router cost $600, not including the $50 shipping charge and taxes. For the first month, the total service cost is around $800. Even though there’s no long-term contract, this initial price is high. Starlink charges $110/month for its internet.

The setup cost for business users is even higher. Here’s the cost breakdown:

  • Deposit $500
  • Hardware $2,500
  • Monthly Service Cost $500

Starlink internet is so expensive due to the high Falcon 9 launch cost and high cost of Starlink satellites, phased array antenna, ground stations, and R&D. 

Let’s explain.

Rocket Launch Cost

HughesNet and Viasat place their satellites in geostationary orbit for two reasons. It lowers the number of satellites required for global coverage and reduces the business cost. However, geo satellites provide very low-speed internet. On the contrary, Starlink delivers cable rival internet speed. 

Starlink typically places its satellites 350-550km above the earth. Even though it provides fast internet, it needs thousands of satellites. 

According to an initial estimate by SpaceX, they need 12,000 operational satellites to provide worldwide internet coverage. Eventually, the total number would reach 42,000 to increase the download speed up to 1Gbps. 

SpaceX currently has Falcon 9 and Falcon Heavy rockets, and the Starship rocket is in development.

According to the SpaceX manual, a new Falcon 9 rocket launch cost is $67 million. And a reused Falcon 9 rocket costs about $50 million per launch. 

The Falcon 9 can fit 51 Starlink satellites on the upper stage. Therefore, to launch 12,000 satellites, SpaceX needs 12,000/51 = 235 Falcon 9 launch.

At $50 million per launch, the total deployment cost is 235 x $50 million = $11.75 Billion dollar. This initial investment is so monumental that no other company has succeeded in building a global internet service before. Some companies tried but went bankrupt. The monthly Starlink cost must be expensive to recover these huge launch costs. Otherwise, SpaceX would also go bankrupt.

Satellite Cost

SpaceX is vertically integrated to lower its operating and overhead costs. SpaceX hasn’t openly said how much each satellite costs to make, but industry experts say that every Starlink satellite is about $250,000. 

To build 12,000 satellites, SpaceX needs at least 12,000 x $250,000 = $3 billion. 

A Geostationary satellite has an operational lifespan of 15 years, whereas the low earth orbit Starlink satellite has an average lifespan of 5 years. Therefore, SpaceX needs to replace these satellites more often than HughesNet and Viasat. It means more operational costs. It’s another reason why Starlink’s internet is so expensive.

Phased Array Antenna

Starlink uses a Phased Array Antenna for high data throughput. Compared to HughesNet and Viasat antennas, these cost extra. According to a recent report, these Starlink antennas cost $1,000 to manufacture. Even though Starlink charges $600 for the antenna and router, they still lose $400 per customer. 

The Business Phased Array antenna costs even more. According to the report, it costs $2,500 per terminal.  

HughesNet and Viasat don’t charge $600 for their antenna. Their hardware costs $450 and $300, respectively. However, both of these companies have 24 monthly contract requirements and have steep early cancellation penalties.

R&D Cost

In a TED interview, Elon Musk said that SpaceX has 12,000 employees. SpaceX pays billions of dollars in salaries to these highly skilled engineers each year. 

Even though SpaceX is currently using the Falcon 9 rocket to launch Starlink satellites, they intend to use the Starship rocket in the future. All these R&D and development costs are intertwined and expensive. Starlink can’t lower its internet costs. Otherwise, it may go bankrupt. 

Ground Stations

Starlink needs hundreds of ground stations to provide internet. These ground stations are the gateway through which the internet gets up to the satellites and down. HughesNet and Viasat need to maintain only a handful of ground stations, but Starlink needs many. Therefore, increased operational costs that make Starlink’s internet expensive.

Still Cheaper Than Competitors

There’s no doubt the initial setup cost and monthly Starlink service charge are high. However, Starlink internet isn’t for users where cable internet is already available. It’s primarily for areas where it’s too costly to lay down fiber-optic or cable internet.

Starlink provides unlimited internet data. In contrast, HughesNet and Viasat’s internet have a data cap. The following two tables show their service prices and speed.

[Table] HughesNet Service Plan and Prices

Monthly Data CapMonthly PriceSpeed
15 GB$6525 Mbps
30 GB$7525 Mbps
45 GB$11025 Mbps
75 GB$16025 Mbps

[Table] Viasat Service Plan and Prices

Monthly Data CapMonthly PriceSpeed
40 GB$7012 Mbps
60 GB$10025 Mbps
100 GB$15030 Mbps

If you already have an internet where the speed is greater than 100Mbps, and the price is lower than $100, avoiding Starlink is better. Otherwise, Starlink is the best service compared to HughesNet, Viasat, DSL, and cellular internet.