Main Engine Cut Off - T+309: EchoStar’s Spectrum Sale, Starlink’s Financials (with Caleb Henry, Director of Research at Quilty Space)

Episode Date: September 11, 2025

Caleb Henry, Director of Research at Quilty Space, joins me to talk about EchoStar’s spectrum sales and constellation cancellation, SpaceX’s spectrum purchase, and the financials of Starlink.This episode of Main Engine Cut Off is brought to you by 34 executive producers—Bob, Heiko, Creative Taxi, Josh from Impulse, Russell, Donald, Will and Lars from Agile, Matt, Steve, Lee, Joel, Tim Dodd (the Everyday Astronaut!), Frank, Natasha Tsakos (pronounced Tszakos), The Astrogators at SEE, Better Every Day Studios, Ryan, Kris, Pat, Joakim (Jo-Kim), Stealth Julian, Warren, Theo and Violet, Jan, Joonas, Fred, David, and four anonymous—and hundreds of supporters.TopicsQuilty Space (@QuiltySpace) / XStarlink Financial & Strategic Analysis 2025 1H | Quilty SpaceSign Up Form | Quilty SpaceEchoStar sells spectrum to SpaceX, cancels MDA satellite contract - SpaceNewsEchoStar’s $23 billion spectrum sale clears path for direct-to-device constellation - SpaceNewsEchoStar orders initial MDA satellites for $5 billion LEO constellation - SpaceNewsThe ShowLike the show? Support the show on Patreon or Substack!Email your thoughts, comments, and questions to [e-mail] @WeHaveMECOFollow @[e-mail] on MastodonListen to MECO HeadlinesListen to Off-NominalJoin the Off-Nominal DiscordSubscribe on Apple Podcasts, Overcast, Pocket Casts, Spotify, Google Play, Stitcher, TuneIn or elsewhereSubscribe to the Main Engine Cut Off NewsletterArtwork photo by CMSEOWork with me and my design and development agency: Pine Works

Hello and welcome the main engine cutoff. I am Anthony Colangelo, and I've got one of our favorite guests back with us today. Caleb Henry will be joining us. He is the Director of Research at Quilty Space, focusing on all sorts of different projects, but he certainly knows his way about the satellite industry. And there's been a bunch of news lately that I wanted to catch up with him about. Echo Star has been on a spectrum fire sale, a Bluthian fire sale of spectrum over in the Echo Star

world. So I wanted to talk about that. What it means for SpaceX when it comes to how they might use that spectrum in Starlink, generally just makes sense of what's going on in that world because it is an interesting moment where there's a lot of players that are sort of wondering, should we get involved, should we make our own consolation? At the same time as you have, you know, Starlink being very established at this point. Kuyper's coming online for Amazon, a very dynamic time in the satellite world.

So lots to talk about with him. And also, Quilty Space just released their new version of the Starlink financial model, where they try to make sense of how much money Starlink is bringing in, what the financials look like for SpaceX. So lots to talk about. Let's give Caleb a call. Caleb Henry, welcome back for the bejillionth time. I don't know how long it's been, but it's been too long since we've talked.

So thanks for hopping on with me today. always glad to be here I knew I needed to call you when this Echo Star mayhem began and has continued for several weeks so I'm glad we haven't talked since they started doing all this stuff and I would like to illuminate the things

that they did because it seems like they had a pretty wild August and early September from August 1st they announced a contract award to build 100 satellites for a constellation August 20 something they sold a bunch of Spectrum to AT&T for $23 billion. Everyone assumed they're going to use the money

to pay for the satellites that we talked about at the beginning. And then just a couple of days ago, they sold another $17 billion of Spectrum to SpaceX. Seemingly, and then also canceled the contract for the satellites up front. So it was a very start-to-finish storyline in like six weeks there. Help us figure out which of these things should we care about. How do we understand the whole play there for Echo Star? Yeah, you're right. It was a roller coaster. It was kind of cinematic to me. I think one of the things that I heard a lot when I joined the industry was, oh, you've got to watch Charlie Ergen. He's this famed poker player who's now in the space industry. And so, you know, his brain is playing 3D chess with the rest of us. And I never quite saw it until now.

taking through just the events that you just shared so even back up before that SpaceX was after Ergen's spectrum so Echo Star Ed Dish and Ergen's Empire

had access to a chunk of S-band spectrum which has sort of been kind of the tortured stepchild of spectrum for the satellite industry like most of the time

for satellite communications companies, they are running their services across three bands. There's C, like Colangelo. There's K-A. That's what it's for. Everybody knows that. Everybody knows that. This K-A band, which is used for a lot of

internet services, and there's KU band, which is also used for internet, but can be used for a TV broadcast. C-band is mostly TV broadcast. So those were typically your three, and then you have your mobile satellite services, That's where your S-band is, as well as your L, L's in Larry, and you see a lot of, they've been...

I love that you just happen to pick my dad's name also. Oh, perfect. So, you're just really keeping this familial, yeah. So, uh, Rydium, uh, like the, uh, the Garmin device, right? Isn't that L-band? Exactly. Yes. Okay. That's what Arridium uses. And Ariridium has a really small slice of it. I think they've got thine megahertz. And so it's why you see them be very selective about the kinds of services they can

provide. They do internet of things. They've got voice. It's a really robust signal, but they don't have enough bandwidth to really provide like, you know, an intense broadband experience. And so you hear Eridium on earnings call after earnings call say, hey, we're differentiated because we have optimized our services to be in line with the kind of spectrum we have and the constellation we have, and it's not the same as Starlink. Starlink is broadband. It's gigabits a gigabits of capacity. Iridium is going to be much more on the kilobits to megabits category. But the service, the signal is so strong that they can use it for emergency communications and have it mandated on ships and things like that. Because if you have to make a call in a time of crisis, L-band is not going to fail you.

Or it's very unlikely to failure, you should say. So, tying this back to you. to Echo Star and SpaceX, when this whole direct-to-device thing became big, we saw the world split into two camps. The first camp were your companies that said, we are going to reuse cellular spectrum from your operators, from Verizon, from AT&T, T-Mobile, and where they're not using it to connect your phone, we'll do it all the way from space. It's technically a challenge. Your phone was never designed to talk to something as far away as space. It's meant to talk to a tower. Sometimes you might even see it, but if you don't see it, you know that it's close.

And so this put a lot of demand on what the spacecraft was going to be able to do. Your other camp were the guys who had all of this mobile satellite services spectrum where it had already kind of been optimized for this kind of thing, even though it didn't exist, direct to sell. So originally, again, two camps. They were each pursuing their strategy. MSS spectrum is already licensed around the world for its purpose. From a regulatory perspective, it was much more straightforward to use.

The cellular spectrum reuse was harder and more complicated. But you also had kind of your bigger names going after. This is how SpaceX did their Gen 1, Direct to Cell Constellation. and this is what AST started down the path of, and it's also what Link was and is doing. And some of that was that you could actually do it with unmodified handsets, right? The same phones that you already had in your pocket would be able to use that, whereas some of this stuff that we're about to talk about needs new hardware actually built-in devices.

Absolutely, yes, very important point. You get to today, one of the things that SpaceX has talked about being able to do with their new S-band spectrum that they're getting from Echo Star is providing a much more robust service, expanding beyond texting, beyond a limited set of apps and some Internet of Things services

to providing something similar to, if not the same as the kind of service that you get today with your phone. But they couldn't do that because they were sort of bandwidth constrained with the amount of spectrum that they were able to use from T-Mobile. And we've seen AST do the same thing, taking spectrum from Legato and the L-Band

to make their service more robust. And I just saw it filing the other day where Link is trialing S-Band or plans to trial S-Ban, I think in South Africa. So all three of those players have shifted over, not from one to the other, but as it appears, using both. and by using both types of spectrum, they can provide a much more robust level of service.

It's interesting that SpaceX went after EchoStar so heavily. They basically went to the FCC and said, these guys aren't using it, and you should take it from them and let us use it in our Gen 2 constellation. And so this started as a big regulatory fight, where FCC chairman Brendan Carr looked like he was siding with the SpaceX argument that EchoStar might not be using the spectrum, and one of the worst things you can do in the ISO regulator is squat on spectrum. That gets regulators in a tizzy really

quickly. So you had a lot of adamant back and forth between the two over whether or not the spectrum was being used to its full potential. You had SpaceX throwing in its own measurements, and you ultimately had an ECHOSTAR saying, you are creating a destabilizing function for our business. And then they threatened bankruptcy. They skipped an interest payment that put them on a force to filing Chapter 11. So it looked very much like this was going to go the litigious route as opposed to the transactional one.

And that's where Ergen's poker gamesmanship comes. in. They ultimately didn't go into bankruptcy, but they showed enough of a threat to do so that it made clear the amount of destabilization that was being caused. And I would venture that it went so far as to even make the U.S. look like if they pulled the spectrum away from Echo Star the way they were planning to, that it made the U.S. look like the less stable of a place to do business, which is what Echo Star was arguing and what some of the advocates on Echo Star's side were arguing.

I think you probably would have had Max Poliakov coming in on their side of that as well. Maybe that was another good example of the Firefly situation, feeling very similar in the world of space. Yeah, not the first time a space company would have gotten screwed on the regatory front and perhaps on dubious means. How did you read, though, the

argument that the Echo Star was not using the spectrum that was assigned to them to the, like, what is the guideline for that? To the fullest potential or to the way that they said they would? What is the actual argument? Yeah. So Echo Star, after it merged with DISH, became way less of a satellite and space company and much more of a mobile network operator.

So a lot more of the conversations on their earnings calls are about the boost mobile network. It's about building up this fourth player. now that after Sprint is gone. So this was something that regulators wanted a while back. They said, hey, if we're going to allow consolidation in the telco space, we still want four players. But when you have an early network, you're not going to see as intense use of this trimet

because you still have to populate it. So they spent billions of dollars. I want to say the figure they put in filings was around 40, build like a non-trivial chunk of money to build out these towers and then the subscribers were slowly starting to come in but they don't have a fully populated network

compared to a Verizon or an AT&T so it's not a perfect comparison to say hey this network is empty when it was just built but that my understanding is that's the argument that was being put forward so you get a very angry echo star saying hey, we just took on this responsibility

to build the US fourth network. We just got here and now you're trying to take away you're pulling the oxygen out of the room like the whole network will die if it doesn't have a spectrum. That's kind of where things were initially. The way I saw

this playing out wasn't a transaction. I kind of looked at it. We studied this in one of our reports before. My expectation was either that the FCC was going to force was going to force something to happen with the spectrum. Either it would

allow Echo Star to keep it and shut down from a regulatory perspective. It would give it to SpaceX, which would most certainly have caused a legal fight. Or it would split the ban because you had other players that were watching. You had

Eridium in the comments. You had Fiasat through the MSSA in the comments, Omnispace, Skylo, others, and everyone saying, like, hey, if you're going to put spectrum on the market, like, let's talk. And that is similar to like the C band auction that happened a couple of years prior where they were auctioning off in that case, man, this is stretch of my memory. That was going, the point of that was for like 5G rollout, right, that they were going to

take 500 megahertz or something like that and auctioned it off. And that resulted in huge bids by, I guess at that point, it was like Verizon won one of them. How many of these details am I getting wrong? Am I doing all right? It was C-Band. Man, it's like five or six years ago now. I can't remember all of the spectrum that was given up, but you're right. It was C-Band.

It was previously used for satellite TV broadcast. As that business waned and 5G grew, the decision was made to transfer it. The satellite operators tried to sell it on their own terms. The FCC said, you don't actually own that, so no. We'll take it. We'll auction it. But we'll give you billions in incentive payments, a fraction of what they would have otherwise got, to hastily move out of that spectrum so that we can use it for 5G. And that was all those accelerated launches where they were deploying new satellites up by a certain deadline so that they would unlock these payments.

Correct. And that was like tens of billions of dollars in that auction. So it was. And do you think that this would have resulted in a. similar. I'm trying to assess like the value that that SpaceX paid for it, right? Because jaw dropping amount was like 17 billion and probably the best part for EchoStar was the 8 billion in SpaceX stock. Like I will take that, you know. Um, I'm trying to assess the value that that is versus what Echo Star might have if they were allowed to go this other route of, I mean,

they were allowed to go this route, but if the FCC went the other route of auctioning this off directly, what would we expect to see in terms of its value relative to what we saw at C-band? Yeah, I don't have a good answer for that one because spectrum bids vary. They're all over the place. I made a table of the whole. I'll see if I can pull it up while we're talking, but they are everywhere. But some key differences, the C-band was a much larger chunk of spectrum. So we were talking, I want to say they cleared out of 300 megahertz.

There's a 500 megahertz chunk. They squeeze the satellite operators in the upper 200. and then made the bottom half, or about 60% available for 5G. So we were talking about a larger chunk of spectrum. I think this was really when 5G was a really hot topic. Not that it isn't still interesting, but it was the early days where it was causing pandemics and whatnot.

Yeah, exactly. Yeah, headaches and evolution. $90 billion, something around that on the C-trub. C-Ban Spectrum licenses that Verizon 18 C&T mobile spent to get that. Huge chunk of money. Yeah. That's wild. And then there was also kind of this, the ongoing debate that we see now,

this contest between the U.S. and China. So there was an argument that if we don't move fast, we'll cede 5G leadership to China. And so that was pushing people to move faster than compared to today. And we're still in this kind of, it's the U.S. versus China and a tech race. But I think that it's moved a bit away from like who's first the roll out of 5G network. Interestingly enough, it might end up being more of this directed device and these constellations that end up being a future battleground.

We're just starting to see Chinese megac constellations go up in serious numbers, starting to see them get some market approval in parts of the world in Latin America, Central Asia and the Asia Pacific. And so I do think that we're going to see more competition on that front as things go forward. But yeah, spectrum comparison one-to-one, very difficult. I think EchoStar made out well with the deal that they got. It wasn't clear how they were going to handle their debts, their debt obligations, before they made these two, the $23 billion deal with AT&T,

and now this $17 billion deal with SpaceX. that puts them on a much healthier footing to pursue whatever it is they want to do next. And they've said that they'll reveal their future plan next week. Oh, a little preview here. All right. Well, so that also made me think, like, what is left? What did they not sell? First of all, what did they sell to 18C?

Was that just something that they did not have any interest in anymore? Or was that, like, how did that fit into this whole puzzle for them? Yeah, so that was a different chunk of spectrum. Let me, I'm just going to flip it up so I don't say anything wrong, because I can't remember the specifics right now. 30 megahertz at 3.45, so right around the C band, and then 20 megarets in 6.7. I love listening to you do spectrum math in your head.

This is great. This is the best segment. Yeah, doing math in public. So these are bands that don't see a lot of activity in the space sector. Yeah, 3.4.5 is in the vicinity of the C band, but it wasn't what was used for the broadcast that we were just talking about. And then 600 megahertz and not well versed in. So I would say those were different spectrum assets that they had that didn't play into space. very much. The S-band that we were talking about earlier was key to the direct-to-sell,

the direct-to-device plans that Echo Star had unveiled. It was behind the constellation that they bought with MDA and then the leader canceled. And so it is a good question of, like, I frankly don't know what the future plan is for Echo Star. They still do have the Hughes business. That's where they've been most forward-leaning in the satellite side of thing. They provide a lot of ground infrastructure, the Jupiter platforms, what they call it, that run telecommunications networks for satellites in any orbit. And they've got their own satellites, the Jupiter series, of which Jupiter 3 is still, like, the second most powerful, make it's tied for first, most powerful geostationary satellite in the world.

It's got half a terribute of capacity in it over the Americas. So they still have this business, and they've been working a lot with hybrid communications. How do you get low latency comms when you're in geostationary orbit? Well, you can blend it with terrestrial networks, and that's one of the things they've done. But honestly, I'm very curious what they're going to unveil a World Space Business Week, because I think there's been a realization that they're going to have to make some serious pivots as they go forward. I mean, Starlink is pushing them out of the consumer business, which is what the Jupiter 3 satellite was built for. They just had to change their strategy for direct-to-sell, and giving up a

spectrum is going to directly affect their future plans for the Boost Mobile network. So they're a company that needs to reinvent themselves in several ways, but they're also much stronger from a cash standpoint than they were in the past. So whereas before, I think they still needed to transform, but they didn't know how. They were capital constrained. Now there's been this forcing function of these transactions and increased competition and pivots that make it so that even though they still have

to change, now they have a means to go out and do that and sort of choose their own destiny more so that they could afford. Yeah, and I think if, you know, they're looking at trying to compete with Starlink, with Project Kuiper, these other players in the space that have, I mean, up until they sold $40 billion of stuff, way more assets to go at these very high expenditure projects. At a certain point, you start doing the math, like, which of these ways can I make more money? Owning $8 billion to SpaceX stock seems like a better bet than trying to compete and get these satellites that, you know, schedule-wise, we're going to take over the next

couple of years to even build out the initial 100, and then another 100 beyond that. The timing is bizarre, but I don't think the decision is. That's kind of how it feels from my perspective, not knowing much about the ins and outs of this. Yeah, well, it's just the pressure, because remember, we were saying you need chipsets to go into the phones to make it so that they can use the MSS spectrum. And a lot of that is tied to standards releases

by an organization called 3GPP. Have you heard of them? I'm going to try not to throw out a million. So they have been releasing these standards that are effectively doing the job of stitching together more terrestrial and satellite

spectrum so that it's more interoperable. And the big release that's next is called Release 19. That's being finalized like literally now, late 2025. And then once that standard is finalized, it will

work its way into hardware that will then see in more phones. So one of the things that I may be funny is the wrong word, but Echo Star CEO was on a call saying one of his earnings calls and was saying like

we're waiting on the constellation because the devices aren't ready. And SpaceX used that like a cudgel to just bludgeon them before the FCC saying, hey, they don't even have a constellation plan yet. You know, they're sitting here waiting. sounds like we're not going to say squatting, but what would you call it?

And then Elon goes on the All In podcast and says, yeah, the devices are about two years away. So, you know, we'll do our work in the meantime and wait for the devices to get here. So like, but we have this waiting period between now and when the spectrum will be fully usable. And that's just a matter of getting the standards done and getting pieces of the ecosystem. them ready that are outside of the control of satellite operators to make it fully useful. The Starlink side of this, too, there's, you know, people out there saying this spectrum actually isn't worth that much. They're just trying to, you know, snuff out other competition or be monopolistic. Is that, is that fair? Is that unfair? Is this the case where, like, again, with the ExtraStar,

you know, we don't know what they're going to announce next week. We don't exactly know the Starlink roadmap from here or how they foresee this growing. Maybe you have some insight. considering the fact that you just released the new financial model for Starlink and have some takes from that perspective as well? Yeah, I don't think it was as simple as anti-competitive behavior. And at the beginning of the call, we talked about how all three of the companies who started with the terrestrial reuse strategy have now expanded and pivoted to making use of this mobile satellite services spectrum.

SpaceX was in the same boat as everybody else when they realized they need more spectrum to really fulfill their plans. And if you look back, the last launch they did for direct-to-sell-satellites was in June. They stopped launching them for a period of time and are working on the next generation of the spacecraft,

one that they want, as far as I can tell, to include this S-band so that they can get to a point where they can provide more robust services. Like, the direct-to-sell business, the technology is really amazing. It was thought of as impossible for a while. And a big part of the reason is we were also saying, the phones are not designed to talk to something all the way in space. So to overcome that, you have to make the satellites it's really capable and really powerful,

it behooves SpaceX to put as much more power into the satellite and make the satellite as optimal as possible in order to do this. So now, I don't think it was anti-competitive. I think it's what they needed to do. I do think that they realized the best spectrum for them was in the hands of a very capable competitor. EchoStar was in a unique position of building out a cellular network and building out a space network. So compared to what just about everybody else is doing, they could have had a vertically integrated ecosystem there where they don't have to coordinate, okay, who's using the spectrum when, you know, Verizon, are you using it over here or shut the satellite off?

It just would have all been under the same roof. so it's always been hard to compete with SpaceX I think the industry is seeing that and it's kind of a known thing that it's tough to compete with Elon and tough to compete with SpaceX I do think it'll be even harder now just because the one thing that they needed

they already had the rocket, the manufacturing, the scale, the reach they didn't have the spectrum so now they do and one day we can debate where you're at on the time that Elon was like, we might build a phone too.

And I'm like, you're not doing that. Everybody says that and then nobody does it. Facebook was going to build a phone at one point too. And that never happened. I don't think building a phone is nearly as fun as people think it's going to be going in. No, I don't think so.

Yeah, I mean, I don't know. This is my, the Apple strategy behind this all has been interesting to me. This is a totally random tangent that happens sometimes. the last time you're on the show, we talked about the whole Apple thing. But, you know, years ago, there were rumors of, um, there were some, was it like Boeing that had a license for some spectrum that could have hypothetically been used? And there was theories of some mystery

partner involved. And it was at the time that Apple was really on a big privacy push, not that they never, never were or aren't still, but like this was at the, the height of them were actually running TV ads about privacy and I was like this would be the best privacy angle they could possibly take was operate their own satellite network network that gets around every restriction they could possibly want can let them do end-to-end encryption including in transport like fully own that stack would have been such an apple move and they were one of the only companies that had the money to do it and you know they ended up in this route where it's more this emergency services direction and you know this week they had it the apple watch I get it it's just not as exciting as

I think it could have been if they were also involved in the game. It would have made for a very interesting angle on things, but that's just not the way it panned out. And I don't know that, I feel like, I don't want to say they missed the boat on it, but it certainly feels like they missed this round or this era of satellite constellations, and

that's going to shake out between, you know, Starlink Kuiper and, you know, a Chinese competitor and maybe a handful of other ones that are kind of in the mix somewhere. Yeah, there was a time like a decade ago, where, you know, where all of your fang companies, except maybe Netflix,

I don't know if Netflix was into it, but all of your fang companies had an interest in growing telecommunications infrastructure everywhere. So Google was bankrolling, what later became OneWeb. Facebook was launching the satellites, building up a satellite team.

Amazon, we know, now has Kuiper. And Apple had this mysterious project where they were hiring people across the space industry. We're kind of seeing them disappear into Apple and not really say a whole lot.

I do think that the Boeing filing in that whole situation, my understanding is that was prepared for Apple and ultimately didn't forward. I thought that was like just some horseshit theorizing that was happening and not.

I mean, I've never heard of straight from Apple, so this is um yeah well you never will so on air but second best location you could have heard it the people that i've talked to around this apple couldn't quite it was apple and facebook were sort of in the same boat of like they hired a bunch of people with a lot of skill sets in satellite communications they didn't know for a long time what they wanted to do and so they explored several different avenues

for Facebook ultimately sold their satellite team to Kuiper and Amazon, or not Amazon, Apple partnered with Global Star. And so that's how those things panned out. That's what we see today. It just took a long time for them to reach their decision. And these are big companies, right? So you can see what happens when they throw all of their weight behind it. You get Project Kuiper, you know, the only Leo constellation that's getting anywhere close

to the scale of Starlink. And then when they don't get into it or when they can't quite figure out what the future is, it remains something of intense speculation for the industry because we know the potential. But it's still a tough business. And if you don't have a clear plan for it, you know, it doesn't make sense to launch just a few satellites or do this half bake. You kind of got to be all in. Yeah. All right.

let's uh i don't want to take up too much of your time so let's hear what if your game plug a little bit of the the starlink the new round of starlink research there you're all putting out there at quilty space yeah thanks for the chance so we are now trying to twice a year update our starlink financial model and basically continue our study of how much money do we think starlink is making and what does this business look like as it grows if the first time we did it was looking at 2024, trying to ask the question of does Starlink make money?

Is it sensible as a business? And our answer from that was yes, that 2024 looked like the first year Starlink ever made money. And then there was some activity on Twitter where I think Musk more or less

confirmed it that, yeah, they'd finally reached that tipping point. And now, as we do the study in our third iteration, looking at everything that's changed and passing 7 million subscribers on a

trajectory that very much looks like they will reach double-digit consumer subscribers while becoming a multi-billion dollar defense contractor, and I'm not even talking to the launch business, like just

Starlink. Starlink, Star Shield, yeah. Starlink, Star Shield, yeah, all of that. the business has really grown into something impressive. So we have Starlink generating. I think it's just under $5 billion in free cash flow for 2026. We envision them closing 2026 with around 12 million subscribers

and continuing to grow in ways that reshape basically every corner of the space industry whether it's maritime where they have eclipsed the number of connections by the entire geostationary industry combined. Growing revenues 10% in aviation. And then the interesting thing that we're also waiting to see is how much they grow in the most populous part of the world, the Asia Pacific. They're very close at looks to getting approval to start service in India. we've seen them get approval in Bangladesh, which is also, I want to say, 250 million people. And then Vietnam, which is like 100 million people. So between Vietnam and Bangladesh, that's like an America-sized market that just opened up.

And then India's like four times that that's on the way. The average revenue per user, I think ARPU is one of your favorite terms, if I remember. Oh, God. Well, there's a whole other story behind that. Yeah. So yeah, the revenue per user is going to be significantly lower, but the market size is going to grow considerably. And so we're waiting to see what kind of transformative impact that has on Starlink as well. And then the big question is still, when do we see Starship operational?

Because that's been a gating factor for unlocking even more potential from Starlink. Remember, the V2 satellite was supposed to launch on Starship, what, two years ago, something like that, and ended up not meeting, or the rocket was so far behind schedule. They ended up doing the V2 Mini. It accomplished a lot that wasn't everything that the V2 was envisioned as being. It was supposed to be like a 10x, you know, order of magnitude improvement. Now we're looking at a 10x improvement from the V2 Mini optimized. to the V3 hitting a terabit of capacity per satellite, which is just unbelievable.

It's just crazy impressive. But Starship still needs to hit that 100 metric tons per orbit. And the slides that SpaceX and Musk really showed that the version 2 of Starship was only putting about 35 metric tons, which was a lot less than I thought it would be. And I think some observers have pointed out it's actually below what New Glenn does. So for that rocket to be really transformative

and to enable this next leap in bandwidth, not that Starlink isn't already a juggernaut, but to make it even more so of one, we're really waiting to see what happens with not just the V3 satellite, but the V3 starship that's supposed to really do what Musk has hoped for it to do for some. sometime now. Yeah, V2s have not been

not been kind to SpaceX is what we're learning in this last five minutes, Caleb. V2 is not where they shine, so that's good. What is, here's a weird, here's a bizarre question for your Starlink modeling. What is the biggest criticism that you receive about the Starlink work that you're putting out and how do you defend it?

Because I feel like I see some people tweeting, tweeting like, oh, you're making this up or this is a bad assumption. or like, I read the internet. I see the flack that you get. And I'm curious what you perceive as the biggest criticism you get and what your response to that would be. I probably should pay more attention to...

Okay, that's great. If your answer is not only the comments, this is a successful segment of this show. Yeah, I think good for mental health to not read the comments. We have calls with our subscribers, and they run us through, you know, a lot of companies have built their own... like investors or competitors have their own models and they're trying to figure out whether or not

the Starlink business makes sense too, either for people to invest in or if you're a competitor, how to compete against it. So I would say we get people who try to kick the tires on some of our cost assumptions around how much do we think the satellites cost, how much do we think the launch cost are or their gateway deployment and that's all fair and well i think the internet is probably most critical of the revenue assumptions and the consumer subscriber number and those are two of the easiest things to be critical of right because starlink puts out how many customers loosely that they have every so often, they get a chance to brag about hitting a new

million milestone. So there's the chance that we'll be wrong, and we probably will if we say it's going to be 80 degrees and it's 76, like, we're going to call that a win. I don't think that we'll get exactly what Starlink hits down to the data and the exact

zigfig. But yeah, those are the two. And then there was that report that came out of the Netherlands. Right? Maybe that's what you're referring to. It was the Dutch Starlink report that some viewed as telling how much money the business was making. We looked at that report. I mean, I have a copy of it on my computer. And the more we studied it, the more we came to the conclusion that that was an incomplete assessment of Starlink as a whole. There were just too many pieces of the business that were missing. and so it was insightful on some details like how much of a margin they are or are not making on their hardware, especially as they lower prices around the world from what used to be between $500 and $600 per terminal to between $3 and $400 on average. But, you know, we spend months building this thing. So usually when people come to us nine times out of ten, we have a good and defensible reason

for why we think, what we think about the model. Yeah. Good stuff. I didn't have that question on my list, but then I thought about it. I was like, I wonder what do you would say this? So I appreciate you playing this game, but where should, I got a link at the show notes to the report. Is there anything else specifically, Quilte, you want to point people to? That's our big thing right now.

We're continuing to do research on constellations, on direct-to-device, on spectrum, on whatever things are interesting to the industry. We've got models built for companies that are public, about a dozen of them. So anyone from Planet Labs and Black Sky to Fiasat and Echo Star, so if you

have questions about finance and the space industry, we're your people. That's it, man. I appreciate you hanging out, Caleb. As always, we've got to do another in-person thing one time. We do. I'm going to come back up to Philly. And we'll hang, or Jersey, wherever we are.

Yeah, back to the hometown, and we'll be good. Yes, sir. I'm not far from space fence. I'm pretty close, man, to that weird little space fence installation. I know what you're talking about. Yeah, out of Lockheed. By the Costco. Not too far away.

Yeah, by the Costco, by the cornfield cruiser, the Navy ship that's sitting out in that field. So if you've ever seen that, you're not far from where I'm at. Awesome. man thanks for hanging out i will talk to you next time always a pleasure thanks again to Caleb for coming on the show always awesome to have him on and uh super knowledgeable about all this stuff so very helpful to hear from him directly on all this if you like this episode if you like what i do here head over to manage and cutoff.com slash support that is the place to join up and support the show every single month there are about 900 and something of you over there supporting the show i'm so

thankful for your support this episode was produced by 34 executive producers. Thanks to Bob Heiko, Creative Taxi, Josh from Impulse, Russell, Donald, Will and Lars, from Agile, Matt, Steve, Lee, Joel, Tim Dodd, the Everett Ashtonathe, Frank, Natasha Sackos, the Astrogators at SE, Better Everyday Studios, Ryan, Chris, Pat, Joe Kim,

Stealth, Julian, Warren, Theo and Violet, Jan, Eunice, Fred, David, and four anonymous executive producers. Thank you all so much for the support. If you want to join that crew, help support the show, and also get access to Miko Headlines. Manichikodoff.com slash support is where to go. Miko Headlines, a whole other show that I do.

I run through all the space news going on and filter out the stories that you don't need to care about, talk about the ones that you do. You often get my take on stories a lot sooner than it makes its way to the main feed just because of scheduling or guest scheduling or time to think about it. But sometimes I'm shooting from the hip over there on headlines,

and it's fun to hear my initial take on things a couple days in advance of what you're getting on the main feed here. So that is where to go to check it out. If you got any questions or thoughts, hit me up on email, Anthony at Manage.com. Otherwise, I will talk to you soon, and thanks again for listening.