This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.

Space Exploration Technologies Corp.’s (SpaceX) chief executive officer, Mr. Elon Musk, has shared important details about his satellite-based internet service, Starlink. The executive’s comments came during this year’s Mobile World Congress, during which he elaborated on Starlink’s performance goals, how it compares to ground-based internet and other satellite services and the investment it requires right now and in the future.

During his talk, Musk highlighted the investment needed to make sure that his company can establish an extensive service infrastructure of satellites and ground stations and provide users with the dishes. According to him, an investment of at least $5 billion is required to make sure that the service is up and running.

His statements for the investment were as follows:

 

He also confirmed that Starlink’s latency would be similar to that provided by 5G and ground-based services over time. Musk outlined innovations for Starlink’s user terminals and satellites and stated that Starlink is a complement to traditional internet services, and it can even provide telecommunications providers with backhaul capability. Latency and backhaul refer to the time it takes for an information packet to travel from a user to an internet server and back, and data transfer to internet backend servers, respectively.

According to Musk:

He further elaborated on Starlink’s progress by sharing that:

Musk also confirmed that a user terminal costs SpaceX more than $1,000, with taxes and import duties affecting prices internationally and that Starlink is working on next-generation terminals that provide the same capability with lower costs. Over the long term, he remained optimistic about reducing the dish’s cost from $500 to $250.

It is operational, we recently passed the notable number of 69,420 active users and we are on our way to having a few hundred thousand users, possibly over five hundred thousand users within twelve months. So, it’s growing rapidly and we’re continuing to innovate the user terminals, and the satellites, and the ground stations, and the gateways and points of presence. I think we’re operational now in about twelve countries and more being added every month. So it’s a nice complement to fiber and to 5G, and it’s also, although we can’t talk about those deals today our partners aren’t ready to announce them it can to be quite useful to telcos for data backhaul. So you’ll have cellular stations in remote regions using Starlink for data backhaul to their network. It can be a very cost-effective way of doing data backhaul.

And then, notably, for Starlink, relative to say other satellite communications systems, we’re at around 500 kilometers whereas the geosynchronous satellites ate at 36,000 kilometers. So latency for a Starlink system is similar to latency for ground-based fiber and 5G. So we’re expecting to get latency down under 20 milliseconds so you can still do, it feels very fast like there’s no lag. So you can play for example competitive video games on a Starlink system.