Why is Starlink So Expensive? First-time prospective Starlink customers ask why Starlink is so expensive. This question usually comes after looking at Starlink satellite internet plans’ hardware costs and monthly fees.
We can attribute Starlink’s high cost to five main factors.
- High infrastructure maintenance costs
- Regulation and compliance fees
- High satellite launch costs
- Intended market
- Product demand
Besides the initial high equipment fees, Starlink Internet is a smart investment.
We’ll evaluate Starlink plans, costs, why it’s a worthwhile investment and if it will get cheaper.
What Does Starlink Cost?
Starlink currently has five plans. Each plan offers different speeds for different prices.
The Starlink Residential plan makes up the largest chunk of Starlink’s 2 million subscribers.
Starlink Residential costs $120 monthly. You must also cover the one-time $599 equipment cost for the Starlink kit. Besides these two costs, there are no hidden charges when you order Starlink Residential.
Other plans include:
- Starlink RV/ROAM
Starlink ROAM comes with in-car equipment that allows you to receive high-speed satellite internet on the move. It costs $150 monthly with a hardware cost of $599.
- Starlink Business
Starlink Business offers priority internet to businesses. Hence, the service attracts a higher fee. It costs between $250 and $1500 a month plus $2500 in equipment costs.
The Starlink Business equipment features a bigger dish capable of 35% more coverage and better weather resilience.
- Starlink Portability
Starlink Portability is an extra feature of Starlink ROAM, where you can take your Starlink RV kit anywhere globally. However, it costs $25 more than ROAM’s $150.
- Starlink Maritime
Starlink Maritime is a premium service for marine vessels. The Maritime plan is tiered into three segments.
The $250 monthly package offers up to 50 GB of priority data. However, the $1000 and $5000 monthly packages offer 1TB and 5TB, respectively.
Additionally, Starlink Maritime equipment costs $2500 per antenna.
- Starlink Aviation
Starlink Aviation is Starlink’s most expensive plan. It provides direct-to-craft satellite internet to jets and airplanes. It costs between $12,500 and $25,000 a month. The hardware fees are an eye-watering $150,000.
Why Is Starlink Expensive?
Analyzing recurring bills
Before digging into why Starlink attracts such high costs, you must understand how it works. Here are possible explanations for why some users find Starlink expensive.
High Infrastructure Maintenance Costs
Starlink uses low-earth satellites and ground stations. The satellites don’t come cheap. They are a product of years of R&D.
Right now, there are more than 4200 satellites actively orbiting low-earth. A single satellite can cost about $250,000.
Also, about 150 ground stations need periodic maintenance to maintain clear communication.
The end product is billions of dollars of development, building, and maintenance costs. Starlink puts the estimates to be about U.S. $30 billion.
The only way to offset these costs is to charge subscribers a fair fee.
Regulation And Compliance Fees
Starlink is now available in 60 countries. Each country has individual regulations and compliance rules.
Of course, these rules come with fees. In Starlink’s case, operating licenses in every country might be huge due to the nature of the project.
They also incur heavy costs in setting up ground stations in each country. All these fees reflect on the final monthly and equipment costs.
High Satellite Launch Costs
A Starlink satellite launch can land the company in a 28-million-dollar hole in operation costs alone. Furthermore, a rocket like the Falcon behind many Starlink launches can cost up to 60 million dollars.
Starlink plans to load low-Earth with about 30,000 satellites to make their internet fast and low-latency.
To see this ambitious plan through, they must recoup the costs of satellite launches through recurrent subscriber fees and high one-time equipment costs.
Intended Market
Businessman using the internet in a private plane
Starlink is not for everyone. And they have stated that they are not in competition with legacy internet service providers.
Starlink satellite internet is targeted at the underserved. Most are already paying high fees and getting abysmal speeds, anyway.
The segment of people with more affordable options is in areas where Starlink has no intention to compete. ISPs charge about $50 for similar speeds(50-100 Mbps) in such areas. However, the cost-to-benefit ratio in rural areas is negative. They pay a high price for slow speeds and unreliable service.
Starlink hopes to carve a niche market by making satellite internet available to everyone around the globe who doesn’t get the coverage they want.
Product Demand
Starlink has reached 2 million active users with a pending waitlist of about another 1 million waiting customers. That tells you there is a high demand for Starlink’s service. In most areas, the willing subscribers are ready to pay the monthly cost to get the internet service.
There is more demand than there is supply. By economics rules, charging less for Starlink internet would not make any financial sense.
There is a demand for reliable maritime, airborne, and on-the-road satellite internet. However, it would be best if you had serious technological feats to provide this service.
Therefore, charging a premium to provide these high-tech services to their intended customers is justifiable.
Will Starlink Get Cheaper?
Chances are high that Starlink will get cheaper in the future. Here’s why.
Competition From New Satellite ISPs
Starlink may be ahead of older satellite ISPs such as Hughesnet and Viasat, but they will face stiff competition from new entrants, Project Kuiper and OneWeb.
Project Kuiper is Amazon’s project that targets the same client segment as Starlink. With huge financial backing, the project was green-lit in 2021, received $10 billion, and committed 3000 satellites into space.
Project Kuiper estimates its first set of customers will get speeds up to 400 Mbps in 2024.
With such competition, Starlink might consider lowering prices to get new subscribers or maintain existing ones.
Changing Technology
We cited ground station maintenance as one of the reasons for relatively high Starlink fees. Starlink has put in place plans to reduce reliance on ground stations. They are focusing on developing laser-enabled satellites to communicate with each other.
The main cause of moving to laser-assisted satellite-to-satellite communication is drastically reducing latency.
The V2 laser-enabled satellites launched in January 2021 are already servicing Alaska. Also, Alaska is one of the locations that does not have a ground station, whether active or under construction.
Some Services Already Became Cheaper
Starlink Maritime has a history of price changes, usually going up and down. In January 2023, a Starlink Maritime subscription cost about $10,000. It dropped to $5,000 before falling to $2,500 in March of the same year.
A price drop in such a plan indicates that once the business model can support itself profitably, Starlink might cut costs in some areas of the world to rope in more users.
Is Starlink Worth The Cost?
Looking closely at Starlink’s tiers and accompanying costs tells you they have a fair price point.
Compared to similar services, Starlink performs better in speed, latency, and signal uptime. And that’s if you only look at the residential and business plans.
Also, plans such as Starlink RV allow you to access consistent, stable internet on the move and when you settle. Plus, the additional functionality of moving to a different address outside your country makes it a super convenient feature.
Starlink Maritime already has a list of high-level users who rely on high-speed, low-latency satellite internet for critical operations.
Finally, Starlink Aviation drastically cuts the cost of direct-to-craft internet. Such a service is worth every penny for private jets and aircraft.
Conclusion
An FCC report shows that up to 4.4 million people can’t access reliable, fast internet. Starlink bridges the gap between location and reliable, fast-speed, low-latency internet.
The accompanying costs are a fair price for convenience if you rely on the internet in areas where conventional providers haven’t covered.
However, factors such as competition and technology improvements might make Starlink lower internet cos.