ISP Column - June 2026
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The Economics of Spacex
June 2026
Geoff Huston
At the end of June 2026 the share price of SpaceX is some USD $164 per share, and if you multiply that price by the total number of shares in the company, some 13.7 billion, you get a market capitalisation of USD $2.163 trillion. The current estimate of the world's population is 8.264 billion people, so the share price of SpaceX is currently at a phenomenal USD $261 per head.
The average revenue per user (ARPU) for the Starlink business is some USD $66 per month, or USD $792 per year. That's down from the 2023 reported ARPU of USD $1,188 due to international pricing used in developing regions in the world, and a push to improve its market share from terrestrial markets. This company now has a market valuation of $261 per head of population but has market penetration of just 0.0121% (Figure 1).
Figure 1 – ARPU and Market Volume for Starlink, 2024 - 2026
Even if Starlink increases its user base a completely unlikely number of 1 billion users, each user will need to account for some USD $2,000 of value to justify the share valuation. At the same time, the ARPU of the global mobile industry sits at between USD $72 and USD $120 per year, and its steadily declining over time at a rate of around 1.3% per annum. So, in ARPU terms, Starlink is out-performing the global mobile industry by an unsustainable factor of 8 or so.
But so far Starlink is not a direct competitor to terrestrial mobile networks. Starlink can only do limited capacity services to mobiles, and falls far short of the 200Mbps - 500Mbps of the terrestrial 5G networks. If you want to increase the capacity of the services offered to mobile devices you need to use far larger antennae on the spacecraft, and the only provider (so far) in that particular market sector, AST Space Mobile has demonstrated capacity up to 100Mbps by using spacecraft with antennae that fold out to the size of a tennis court! Starlink's antennae in the spacecraft are far smaller and when communicating with a mobile device with its unfocussed antennae the available channel capacity is invariably lower. In the mobile device space, equating Starlink services to today's 5G terrestrial networks Starlink looks like a triumph of exuberant hype over a more sobering reality.
The Starlink prospectus notes that: “Based on the total number of connected devices globally and the mobile ARPU, we estimate the Starlink Mobile market opportunity to be $740 billion," Don't forget that the current designs of the Starlink spacecraft do not use very large antennae, and the available capacity to service a mobile device is severely limited. It appears that a mobile device user is looking at a channel capacity of 4Mbps per second. Now if you are one of the few individuals living in one of the far remote regions of the world, then anything, even this, looks good (although AST looks a whole lot better for direct-to-cell). But to get to the Starlink projection using an industry benchmark of USD $100 annual ARPU means that Starlink will need a significant user population of a billion or more, and with those numbers Starlink is competing head-to-head with terrestrial mobile services with a substantially inferior service. This just doesn't add up.
So perhaps this is all about the terrestrial broadband networks rather than mobile systems. The industry rate of broadband ARPU is approximately double the ARPU of mobiles, at some USD $240 per year.
Starlink has gathered some 10M predominately broadband users to date. SpaceX reported 2025 revenue of USD $18.67 billion. Connectivity services contributed USD $11.39 billion, or 61% of the total.
Here, Starlink's prospects look healthier, in that an ARPU of some USD $1,000 per year is four times the industry benchmarks for fixed broadband. However, Starlink has been positioned so far with a user-terminal based service that generally delivers between 50Mbps - 250Mbps downlink and 20Mbps - 50Mbps uplink. Starlink V3 satellites are reported to have a total of 1Tbps of downlink capacity and 160Gbps of uplink capacity, divided into 48 individual down beams and 16 uplink beams. If you happen to be the only active Starlink user in a cell it may be possible to have a 1Gbps downlink capacity. On the other hand, if you happen to live in an urban environment that is served with fibre cable infrastructure current market offerings are edging to capacities four more times that capacity. A 50G-PON deployment splits a common 50Gbps capacity using a splitting ratio of between 1:32 to 1:64. So the market values such fixed broadband services at an ARPU of USD $240 per year. For a fixed broadband service Starlink is offering an undistinguished access service, and where broadband is already available then Starlink needs to compete for market share on price alone. Starlink's business edge lies in rural and remote, and here its far cheaper than a...