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I remain convinced that the main successful business model in the satellite communications industry is to wait for the first incarnation of the satellite company to fail / go bankrupt / flounder, and then be part of the 2nd round of financing or ownership that comes in to buy it out and operate it... I don't know why this is the pattern but it seems to have played out several times over the last 2 decades that I've casually watched this syndrome.
If you haven't read Eccentric Orbits: The Iridium Story you should. The system was operational, but Motorola's dysfunction and impossible sales goals leading to disillusionment meant that Dan Colussy & team was able to pick it up for $25 million (development price: $5 billion)
They were about $3 billion in the hole when they went through bankruptcy in 2002 and the new owners bought it for $43 million (from Wikipedia). In 2025 they earned a return of $-8 million on that investment (plus any other money raised since then, such as $1 billion from Apple). So even the second incarnation doesn't seem to be a good business model even with free satellites.
The business model that works seems to be spectrum gambling. Do the minimum amount of satellite investment for decades until someone with a real business plan comes along and has to go through you to get it.
Or become a major investor on a largely public funded project with commitments set to start at a delayed time in order to benefit from R&D before bearing financial burden. (See [1].)
[1] https://www.ft.com/content/8e75ed31-0c72-4160-b406-1ca6aa36a...
The only real viable long-term business model for these constellations are for the military or other socialized use.
They are completely unprofitable otherwise. Eventually even Starlink will lose money, as more and more rural regions around the world are wired for fiber.
>more and more rural regions around the world are wired for fiber.
Ecuador has the highest rate of cell phone ownership in the world, because they never built landlines and just went straight to wireless.
Same with electricity in many African countries -no grid, straight to local solar.
When I see comments like this it’s obvious you’re talking about West Virginia or Nevada as “rural regions around the world”
Go spend time in the Canadian arctic, the Congo, Sudan, Bolivia, Mongolia, Remote Australia and dozens and dozens more if you want to see where starlink shines and is rapidly changing the world.
I find this hard to imagine. There are so many rural customers where it is totally uneconomical to run fiber vs. just paying for Starlink.
> I don't know why this is the pattern but it seems to have played out several times over the last 2 decades that I've casually watched this syndrome.
This is a pretty common pattern in capital intensive businesses. It's often the case that revenue is inline with operating costs, but revenue can't really ever pay for the start up costs. That dooms the initial business, but after bankruptcy it can be viable.
Depending on circumatances, the very visible bankruptcy also helps deter other businesses from joining the market. But if the cost was high due to technology, doing the same business 10-20 years later can work out because the start up costs may be significantly less.
You see the same pattern with railroads from 1860 to 1900.
Iridium was first. It was a cautionary lesson. Listen to Patrick Boyle regarding Starlink. Not everyone was paying attention in class.
> to fail / go bankrupt / flounder
This is exactly what "the Internet" said about spacex when they announced Starlink. Oh, it never worked. LEO constellations were tried in the 90s, ALL of them failed. Haha, it will never work. 14k satellites, that's insane, dreams, lies, hahaha.
... and yet, they are now at ~10k satellites launched, and are serving 9+mil customers, for some unknown billions/year in revenue (should become clear in a few months when they IPO).
> for some unknown billions/year in revenue
Read here on HN yday: they’ve $20B in revenue, but xAI is a drag.
Or also owning a rocket company that launches your satellites at low cost.
It is of course what happened to Iridium. But not all of them go bankrupt.
Clayton M. Christensen (The innovator's dilemma) would agree.
Naive question - let's assume this all becomes a really competitive market and 10+ companies are pumping satellites into orbit.
Are we going to run out of space?
At some point it probably makes the most sense for there to be one wholesaler of satellite connections and then many retailers right? The market skews towards being an international natural monopoly, right?
It would be incredibly unlikely for there to be enough competition at a grand enough scale for it to become a problem. Space is just very big. Earth's surface is ~197 million sq miles. If you move up to a LEO shell at around 550 miles up, the surface area of that sphere is 34% larger than that.
If you were to distribute 100,000 satellites across that shell, each one would have 2,600 square miles to itself. That's like having a single car in the entire state of Delaware. Mind you, that's if we are only considering a 2-D sphere, but space isn't 2-D you can space your orbits between 550 and 650 miles, with each 1 mile vertical increment acting as a "floor" or passing lane. You can now multiply your 265 million sq miles by 100x.
The issue isn't space, it's traffic management. Satellites zipping around at 17,000 MPH would make one hell of a debris field if even one pair of them collide. That's the Kessler Syndrome boogie man everyone is worried about.
The Crash Clock is currently at 5.5 days.
> Mind you, that's if we are only considering a 2-D sphere, but space isn't 2-D you can space your orbits between 550 and 650 miles, with each 1 mile vertical increment acting as a "floor" or passing lane. You can now multiply your 265 million sq miles by 100x.
Yes but don't forget that orbits decline and only satellites with onboard propulsion have the ability to boost them back up. Everything else like cubesats and random debris doesn't and thus doesn't "stay in their lane".
>Are we going to run out of space?
In a certain sense, we do. Pumping thousands satellites to LEO increases probability of triggering the Kessler syndrome. Luckily, LEO orbits are also self-cleaning on reasonable time scales (decades), so I think that some day we will trigger it (potentially, with some "help" from anti-satellite weapons) after which some kind of international regulation will be introduced to prevent repeating it in future.
I'd say there's plenty of room for competitors along multiple dimensions: Geopolitical security (this alone will probably preclude a single monopoly), price and lack of a moat (once a monopolist starts jacking up prices, there's an immediate incentive for an alternative), delivery profile (store-and-forward for IoT-like use cases vs. dumb pipe vs. in-space forwarding), frequency band (L- or S-band for direct to device vs. Ku/Ka band requiring directional terminals) etc.
The only thing that's actually scarce and that could be monopolized rather easily is frequency spectrum. In fact, I suspect this to be a frequency/operating license driven acquisition.
There might be room in orbit for everyone, but not in the night sky without ruining observation, I’m afraid.
Are we going to run out of space?
During the Artemis launch it was very briefly mentioned that the launch window isn't a continuous window, but a series of windows interrupted for short times. I wondered if that was because of the thousands of satellites in orbit.
SpaceX and Amazon seem to be headed for competing with traditional telecoms and ISPs. I'm betting the next acquisition target will be AST SpaceMobile. I also wouldn’t be surprised to see big telecom/ISP mergers pass regulatory approval now that they have competition from the heavens
They'll try. But they are between two forces squeezing the TAM:
The anvil: satellites can't serve most people in a densely populated area, whereas terrestrial wireless can be engineered and deployed to serve any population density, even tens of thousands of people in a stadium.
The hammer: electronics get cheaper faster when they don't have to be space grade, and electronics get cheaper faster than rockets. As they get cheaper, terrestrial wireless will be deployed in more areas that are uneconomical right now.
And that is how the satellite TAM gets slammed.
> SpaceX and Amazon seem to be headed for competing with traditional telecoms and ISPs.
Traditional ISPs already have a nice network of copper and fiber optic cables. I don't think satellites offer any advantage to most people here, except for those living in an area with slow wired connections.
> I'm betting the next acquisition target will be AST SpaceMobile.
Or possibly viasat.
Oh, I missed the memo that Amazon Leo is the new name for Project Kuiper, rebranded in November of last year. I saw a presentation back when it was Kuiper so have still been calling it that
Leo is a dumb name. I still call it Kuiper.
I wonder if there will become a point where these companies will be considered too big and will be forcibly cut up to smaller chunks... If feels like they have tentacles in everything now.
There is no such thing as a company being "too big", it's only a question of market power (eg monopolies) and abuse of that power.
For LEO data it seems that there will be plenty of competition. If you're talking about Amazon, they're in fiercely competitive markets. Them having the capital and cash flow ('size') to launch a competitor to SpazX is only a good thing.
People think that with better D2D technology, emergency and telemetry messages will still be short and to the point. These messages will not be like streaming videos.
When companies work together on things, like spectrum and constellations and handset deals it changes how people get billed.. It does not change the fact that people want to keep the messages small when millions of devices are using the same channel.
I am curious to see if people will still talk about having satellite access or if they will start talking about paying for what they use once this is up and running. D2D technology is still going to be used for these messages.
Spectrum contention is going to be insane in D2D.
Starlink already has to constrain the number of broadband accounts per locale to avoid saturation.
With small enough spot beams, the difference between a large rural cell and a very narrow direct-to-device spot beam footprint is really not that big anymore. Starlink apparently already offers video calling over direct to cell in the US via T-Mobile!
Are we going to be able to see the night sky by the end of this decade?
And what's the effect on cancer rates, etc. from all that toxic pollution to both launch the satellites and then vaporize them in the atmosphere years later?
https://bloomberg.com/graphics/2025-space-orbit-satellites-p...
Sure would be nice if the answers to these questions were not guessing before we do the damage and impossible to fix after
We need to start requiring that for each batch of satellites that goes up, some piece of space junk - hell, any piece of space junk - gets brought back to Earth's surface in one piece for proper recycling.
Related:
Amazon acquires Apple's satellite partner
See also: https://news.ycombinator.com/item?id=47770323 My comment from there:
Interesting, I was expecting Apple to eventually buy them.
Still, makes sense to me: The aging Globalstar satellite constellation itself is probably not very interesting to Amazon, but their global L-band and S-band spectrum is, as are their existing licenses to operate a mobile satellite service in most countries.
Post-Jobs Apple seems paralyzed and unable to commit to any big moves.
It is impossible to overstate the success of the iPhone, but there are so many recent examples where they dipped their toes in only to fail or be left behind (autos, VR, AI, etc).
What will the next 20 years of Apple look like? Just more iPhones?
So, Amazon wants to own the tubes too?
I guess the stack should be completed with this. AWS servers, satellite communications, boxes to view content on TVs, apps on mobiles, content creation studios, advertising, product placement, product sales. Whew!
I guess they also want expertise to launch stuff into space, in case it becomes feasible to run space data centers.
> I guess they also want expertise to launch stuff into space
Blue Origin is Jeff Bezos' private aerospace company
They would also need to protect all this stuff spread globally and into the space. No government will be able to do that - like we've already seen with the datacenters being hit in the Gulf states. Company like AMZN will have all the components for the most modern weapon system - global autonomous drone offense and defense network with the space component (or imagine a 1 GW datacenter in space temporarily rerouting its power into a laser or a microwave effector 80-ies StarWars style :) plus de-facto global intelligence network that each of these companies have, and thus will have and will be able to better protect themselves. Those large BigTechs will unavoidably have to move into defense, for themselves and as-a-service for smaller transnationals.
Amazon seems to have a service for everything, one time I saw they had satellite ground station as a service
Probably for their existing L/S-band spectrum and carrier licenses.
Why space data centers? What advantage this would have? Cooling will be a big issue, while it is easily solved on the planet earth, as we have water, air that can transfer heat away.
Well if they really want to be full stack, they need to also get down into pharmaceuticals and bio-engineering, right?
Any reasonable government regulatory agency would block this aquisition. Amazon just laid off 16,000 people. They are unworthy of further consolidation.