SpaceX is spending $1,500 to make each Starlink terminal but customers will only be charged $499, its president says

Elon Musk's Starlink terminal
Elon Musk’s Starlink terminal.

  • Each Starlink terminal used to cost SpaceX $3,000 to make. Now, they’ve been reduced to $1,500.
  • SpaceX president Gwynne Shotwell said the firm won’t charge users the overall cost of the terminal.
  • She said the price of the terminal should fall to a few hundred dollars in the next year or two.
  • See more stories on Insider’s business page.

SpaceX president Gwynne Shotwell on Tuesday said the aerospace company has reduced the cost of each Starlink terminal from $3,000 to $1,500 each.

Starlink customers have to pay $499 for the kit, which includes the user terminal -also known as “dishy” – indicating that SpaceX is covering the remaining cost of $1,000 for each one it produces.

SpaceX didn’t immediately respond to Insider’s request for comment but industry experts told Insider in December it’s not possible for the company to make each terminal for under $500. They said it could actually cost SpaceX nearly $2,000 on each one.

Shotwell confirmed on Tuesday during a virtual panel discussion for the Satellite 2021 LEO Digital Forum that the company had to pay $3,000 for each terminal, before reducing the price to $1,500.

Starlink
$499 Starlink kit displayed in box.

“We’re not charging our customers what it costs us to build those terminals,” she said, adding that SpaceX has “made great progress on reducing the cost” of each Starlink terminal by half the original amount.

At, present Starlink costs users $600 upfront for the “Better Than Nothing Beta” test – that includes a $99 monthly subscription and $499 for the kit, which customers set up at home. It comes with a tripod, WiFi router, and terminal which connects to the Starlink satellites.

While it’s not confirmed how many terminals have been sent out to the beta test subscribers, SpaceX noted in February that Starlink had more than 10,000 users in the US and abroad.

The company also “just rolled out a new version two that saved about $200 off the cost” and is expecting the price of each terminal to reduce to “the few hundred dollar range within the next year or two,” according to Shotwell.

spacex starlink user terminal phased array consumer satellite internet dish antenna ufo on a stick roof los angeles california website
Each Starlink terminal initially cost SpaceX $3,000 to make.

Read more: Starlink’s $499 starter kit fee comes nowhere close to covering SpaceX’s costs for the satellite-internet electronics, telecom experts say

This is good news for Starlink users looking for lower service costs.

For US customers, $600 upfront isn’t bad, since it can be cheaper than the major internet providers. But in the UK, paying £439 for the kit and £89 subscription fee for 150 megabits per second (Mbps) is expensive in comparison with some national providers, which are offering speeds of up to 516 Mbps for £79 per month.

SpaceX CEO Elon Musk has spoken out in the past about the difficulties with financing Starlink.

The billionaire tweeted in February that the company “needs to pass through a deep chasm of negative cashflow over the next year or so to make Starlink financially viable.”

He added that Starlink is “a staggeringly difficult technical & economic endeavor” but if it succeeds, the cost for users would improve each year.

Starlink’s 10th mission this year blasted off on Wednesday, sending a batch of 60 satellites into orbit to expand SpaceX’s ever-growing constellation. The aerospace company has more than 1,350 satellites in orbit and plans to launch 42,000 by mid-2027.

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A beginner’s guide to broadband internet, the most popular type of internet in the US

High speed internet
Broadband is the most popular type of internet access around.

  • Broadband internet is another name for high-speed internet service, usually defined as 25Mbps or faster.
  • There are four major types of broadband internet: cable, DSL, fiber, and satellite.
  • The average broadband speed in the US is 124Mbps, but DSL is much slower at about 35Mbps, and fiber is the fastest at 1,000Mbps.
  • Visit Insider’s Tech Reference library for more stories.

Simply put, broadband is any high-speed internet service. Broadband is the most common kind of internet service available, and that’s been true in most populated regions of the US for a couple of decades.

If you’re reading this, there’s an extremely good chance that you’re using broadband internet.

Broadband internet, explained

Prior to the widespread availability of broadband, most internet was delivered to residential homes via dial-up service – the same technology used for telephone calls. This meant that picking up the phone would turn off your internet access, and internet speeds were pathetically slow – about 0.056 megabits per second (Mbps).

These days, nearly every home in the US uses broadband. And in contrast to dial-up, the average broadband speed in the US is about 124Mbps, according to DecisionData.org – that’s about 2,200 times faster.

Router on laptop keyboard
Broadband speeds vary depending upon your location, service provider, and service plan.

While the average broadband speed is 124Mbps, actual broadband speeds vary dramatically depending upon where you live, your service provider, and your actual broadband service plan. Since 2015, the Federal Communications Commission has defined broadband as any service that delivers at least 25Mbps download speed and 3Mbps upload speed, though broadband can also reach “gigabit” speeds – 1,000Mbps.

Broadband isn’t the same thing as Wi-Fi. Wi-Fi is the wireless network that broadcasts internet signals around your home or office. “Broadband” describes the type and speed of those signals, which are delivered to your home and then passed through a router. The router can then send the internet to your computer and other devices via Ethernet cable or wirelessly via Wi-Fi.

The four major types of broadband internet

There are four major kinds of broadband service. Not only do they use fundamentally different technologies to get the data to your door, but they vary by speed and price. Here is a brief overview of each:

Cable

Coax Cable modem
Broadband cable internet uses a coaxial cable to transmit internet signals.

Broadband cable internet uses the same coaxial cable that brings cable TV into your home; it’s become a popular form of broadband because it lets consumers use the same company for their television and internet access.

Cable is fairly fast, usually able to reach speeds as high as 500Mbps (depending upon the service plan you choose). Cable’s bandwidth is shared among everyone in a service area, though, so you might find it slows down in the evening when everyone is at home and streaming video.

DSL

A laptop and router
DSL isn’t as fast as other broadband types, but is still better than dial-up.

Digital subscriber line (DSL) uses phone lines to send and receive data and is championed by traditional phone service providers to leverage their infrastructure.

It’s relatively slow, especially compared to cable, generally limited to about 5Mbps to 35Mbps. But in rural areas, it’s often the most available option.

Fiber

Fiber internet line
A fiber optic technician splices together fiber optic cables for house connections.

As the name suggests, fiber uses fiber optic cables to transmit data using light rather than electricity.

It’s generally the fastest residential internet you can buy, topping out at 1,000 Mbps (which is referred to as a “gigabit” service). Like cable, fiber shares bandwidth across groups of customers but carries so much data that customers should never notice a slowdown.

Fiber isn’t available in many areas but is slowly spreading to new cities.

Satellite

Starlink Satellite Internet
Starlink Internet communication satellites seen in the night sky.

Satellite internet isn’t common because it’s typically the most expensive service per megabit, offering the lowest overall value. It’s most often used in rural regions that are poorly serviced by DSL, cable, and fiber.

The economics of broadband satellites might be changing, though, as SpaceX deploys its Starlink constellation of broadband internet satellites. While still being deployed and operating in a limited beta capacity, Starlink costs $99 per month and is expected to eventually offer download speeds of 300Mbps.

Related Article Module: SpaceX’s Starlink internet satellites could make astronomy on Earth ‘impossible’ and create a space-junk nightmare, some scientists warn

However Starlink has also proved controversial, as its satellites are clearly visible from Earth, attracting complaints from scientists and environmentalists about light pollution and space junk.

‘Why isn’t my internet working?’: How to identify why you can’t connect to the internet and troubleshoot accordinglyHow to boost your internet speed at home in 8 ways, and make sure you’re not being overcharged for low speeds‘What is a good internet speed?’: The internet speeds you should aim for, based on how you use the internetHow to use a Google speed test to check how fast your internet speed is

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How helpful is SpaceX’s customer support when Starlink customers run into problems? Users gave Insider their verdict.

  • Starlink users told Insider how efficient and helpful Starlink’s customer service team was.
  • Some users thought it was quick, but others had long delays and had to cancel Starlink altogether.
  • “My only wish is that [Starlink] was a bit cheaper,” said one customer from Canada.
  • See more stories on Insider’s business page.

Starlink users gave Insider mixed responses about the speed and effectiveness of SpaceX’s customer support team when they ran into problems.

Some users said Starlink’s help was quick but others experienced delays, leading to cancellations of the satellite internet service.

Since the launch of its beta test in October, Starlink has accumulated more than 10,000 users worldwide and operates in more than six countries. SpaceX has more than 1,200 satellites in orbit but the goal is to have up to 42,000 by mid-2027.

Starlink’s beta test is called the “Better Than Nothing” beta and SpaceX warned users in an initial email to expect speeds to range between 50 Megabits per second (Mbps) and 150 Mpbs.

Although users told Insider that setting up the kit is very easy, it’s still possible to run into problems with connectivity.

Rayce Townsend, who is based in Montana, contacted the Starlink team twice via email. He wanted to know whether he could take the kit to Texas and install it there. Starlink told Townsend the service wasn’t yet mobile but he could reapply in Texas for the future.

Townsend said the response was “quick, friendly and thorough.” So far, he’s found Starlink “trouble-free.”

Starlink box with the instructions on top
Starlink box with the instructions on top.

Dan Ventrudo from Northern Ontario, Canada, said he contacted customer service twice about the connection and they were also quick to respond. “My only wish is that [Starlink] was a bit cheaper,” he said.

But Jim Glassford from Michigan wasn’t impressed.

He told Insider: “One thing we were not aware of is the distance restriction for the satellite dish and the power supply. The nearest unobstructed location from the house was about 300 feet and you cannot extend the 100 foot long cable included.”

Glassford got in touch with customer support but it took a week for them to respond. After a bad experience, “we had to cancel,” he said. It’ll cost him $130 to send the kit back to Starlink.

When Gary Konkol from Wisconsin came across technical problems with the power box, Starlink customer support assisted him over several days of emailing. He said it was helpful but there were long delays between messages.

SpaceX didn’t immediately respond to Insider’s request for comment about long delays from its customer service team.

Tom Gooch from Montana said: “I have not needed to contact Starlink customer service. Everything has run flawlessly since I started it up.”

“Elon Musk has a reputation for doing things well and it appears that holds true with Starlink,” Gooch added.

Dishy in rural Montana
Dishy in rural Montana.

Have you got any Starlink tips? Get in touch with this reporter via email: kduffy@insider.com

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