Elon Musk has committed his privately owned space exploration and rocket launch company SpaceX to investing up to $30 billion in Starlink, its daughter company building a constellation of satellites. The Starlink system already has 70,000 paying customers across 12 countries and the aim is to offer broadband internet coverage across the whole of the globe, including its most remote corners.

Achieving that will require increasing the number of the 1500 Starlink satellites currently in low orbit around the Earth to a total of around 12,000. However, Musk said that with planned additions to the satellites constellation, Starlink will already be able to beam a broadband internet connection to “everywhere except the poles”, by the end of the year. User numbers are also expected to leap to half a million from the current 70,000 within 12 months.

Describing Starlink’s service via a video link to the Mobile World Congress in Barcelona, Musk said:

“It’s really meant for sparsely-populated regions. We’re really getting to parts of the world that are hardest to reach — the most difficult to reach 3 per cent, possibly 5 per cent.”

However, the $30 billion investment figure forecast as needed to reach the full constellation size is several multiples on previous totals mentioned. At a 2018 TED Talk, Starlink’s chief operating officer Gwynne Shotwell said the expected cost of getting 12,000 satellites into near orbit would be “about $10 billion or more”.

It now seems the figure has been revised up to ‘much more’ but there is clearly a commitment to making the needed investment. Another $5 billion to $10 billion of upfront investment is expected to see Starlink become cash flow positive. Musk summed the capital costs up concisely with “it’s a lot, basically”.

Musk made no comment yesterday on how he currently sees Starlink’s revenue potential but has previously estimated annual income reaching $30 billion by 2025. Setting up a Starlink broadband connection involves an initial $499 cost for a satellite dish, or “terminal” in the company’s jargon, and a monthly subscription fee of $99. Musk says the cost of the terminal is subsidised with the actual cost of the hardware twice what subscribers pay for it.

Starlink has also, said Musk while declining to name them, signed two partnerships with major telecoms companies.

The UK’s OneWeb, which the government has a 42% stake in, will compete directly with Starlink for a share of the satellite-based broadband market. Private companies have been trying to establish commercially viable satellite-based internet services since the 1990s.

So far nobody has succeeded at any scale. But there is a growing belief the new generation of competitors, of which Starlink and OneWeb are currently the two most advanced, will change that, bringing almost blanket broadband coverage to rural and remote areas internationally.