[JumpCrisscross]

> I believe that YOU are a bot

I don't believe you were a bot, but there were one or two phrasings that gave me pause. (If I believed you had written that with AI, I'd have just asked that and not bothered engaging.)

> v1 constellation was completed in 2021, and decommissioned from 2024. v2 deployed from 2023, but the sat-to-sat communication is not working, so all of them, will need to be replaced by v3, too

Fair enough. $3.6mm on $2mm--assuming $100,000 per month revenue and $2mm paid up front, which is unrealistically conservative--yields a 22% annualised. Take that out to the increasingly-attained design life of 5 years and it jumps to 25%. To put it bluntly, these are both incredibly high telecom returns.

You've already incorporated launch, maintenance, disposal, et cetera in TCO. So the remainder is customer service (usually 5 to 10% of revenue) and cost of capital. Even assuming 10% WACC, which is on the upper end for a leveraged telecom play, we're still comfortably generating excess return.

Where the comparison fall apart is in respect of fibre. Laying physical infrastructure is hard. You have long periods between capital outlay and return. Also, you have to right scale up front--you can't just launch more birds in a few months as demand scales (or hold them back if it doesn't).

You're not going to replace fibre with Starlink. But the economic case for the latter doesn't fall apart with 20%+ operating returns.

[Fischgericht]

Well, on purpose I have given Starlink very optimistic numbers, yes. :)

And yes, 22% yield sounds nice, but if someone would hand me their pitch deck and give me a SWAT analysis I would just laugh them away: The risks are far too high.

(See for example the article that this very thread is about.)

Of course you can only guess based on that, but it looks that in real life things are worse:

https://arstechnica.com/space/2025/02/starlink-profit-growin...

These data points might be interpreted as "Starlink is getting 40% of their revenue from tax money".

And while "7 million subscribers" might sound impressive on first sight: This is the number of DSL connections subscribed to in the tiny country of Belgium. But for magical reasons Starlink is valuated at a price higher than if you would buy all of Belgium ;)

Your point in regards of laying physical infrastructure is valid for a lot of western countries. But not all of them. Some countries in the EU for example years ago created laws that say that whoever opens the street for any reasons has to put in empty tubes for someone to later put in fiber before closing the street again.

So: This is a regulatory subject really, not physical cost. Fiber is dirt cheap if you are allowed to use existing power poles for example (which is unlike with copper obviously not a problem in regards of signal integrity), or existing underground pipes, or just throw it from house roof to house roof.

[JumpCrisscross]

> I have given Starlink very optimistic numbers

Your revenue figures are consumer only. And while you're generous on utilization factor, we capitalised the TCO up front while amortising revenue, and then reduced asset tenure to worst case observed during development.

Flex up to 4 years, let $1mm TCO be paid up front and the rest amortised, and reduce utilisation to 80% ($80k/month revenue) and IRR shoots up to 73%. Take TCO to $3mm ($1mm up front, $2mm amortised), reduce utilisation to 75% and we're still over 20%.

> while "7 million subscribers" might sound impressive on first sight: This is the number of DSL connections subscribed to in the tiny country of Belgium. But for magical reasons Starlink is valuated at a price higher than if you would buy all of Belgium

Well, yes. Starlink connections are more profitable and you can't scale selling internet to Belgium into a Starshield defence contract. Or selling to airlines and cruise ships and yachts and mining operations, all of which pay more than a Belgian.

> some countries in the EU for example years ago created laws that say that whoever opens the street for any reasons has to put in empty tubes for someone to later put in fiber before closing the street again

Starlink doesn't sense in densely-populated areas of the EU or Asia. (And the equivalent for SpaceX would be ridesharing Starlink on someone else's flight.)

> Fiber is dirt cheap if you are allowed to use existing power poles for example

If you have the scale. You're underestimating the risk that comes from having to place infrastructure up front.

Your analysis is pretty solid. But I don't think it's taking into account the fact that you can build multibillion-dollar telecoms business on a few tens of millions of high-paying customers.

[Fischgericht]

I guess we can agree that the comparison between Sat internet and physical links depends a lot on the physical situation in the target region, and the regulatory frame work.

And please keep in mind that while you are right that there is a risk investing into physical infrastructure also applies to Starlink. It's worth remembering here that all Sat Internet companies prior to Starlink had failed and needed to be rescued with tax payer money.

I don't have exact numbers, and it's a bit muddy due to state subsidiaries, but in Germany the average cost to connect a subscriber in a medium density town with fiber, with given that nothing was prepared and you have to open the street etc appears to be in region of €/$ 2,000 or so.

I don't know if that is done in the US, but also in Europe we now do "trenching". It has some downsides and pitfalls, but this reduces the upfront infrastructure cost for fiber massively.

[JumpCrisscross]

> while you are right that there is a risk investing into physical infrastructure also applies to Starlink

Absolutely. It's why I think assuming the WACC of a highly-leveraged telecom (around 10%) is appropriate.

> this reduces the upfront infrastructure cost for fiber massively

Fibre makes sense where there is density. It's higher capacity and cheaper. That doesn't mean it makes sense everywhere. And a lot of that everywhere will pay a lot of money for connectivity.

The global telecom market generates trillions of dollars of annual revenue [1]. There is a lot of fruit for the picking.

[1] https://www.grandviewresearch.com/industry-analysis/global-t...