> their costs are fixed
Their costs are in dollars. Ceteris paribus, this is coming out of Starlink's margin. (They may also be anticipating a compensating bump in volumes. Or they found some cost savings.)
Their costs are in dollars. Ceteris paribus, this is coming out of Starlink's margin. (They may also be anticipating a compensating bump in volumes. Or they found some cost savings.)
I.e. you are better off if you to have 150 customers who pay 75GBP instead of having 100 who pay 89GBP. You already sent the satellites and you already employ the people who upkeep the infrastructure, so it doesn't matter what currency you use, you always want to have the greatest revenue.
You're describing a monopolist pricing model's revenue curve [1]. Let's complete the model. On the same graph imagine the marginal cost of providing the service (e.g. billing, customer support, peak bandwidth rationing et cetera). Subtract it from the revenue curve. You now have a profit curve. For SpaceX, if we dollar denominate then a rising dollar means the revenue curve moves down; if we local-currency denominate, a rising dollar means the cost curve moves up. Either way, symmetry. (Note: this works even if you assume zero cost elasticity, i.e. a horizontal cost curve.)
Thus, whether SpaceX is buying growth by losing money, hopefully in the short term; buying growth by making less money; or, as you suggest, increasing the quantity demanded on a unit-economically positive game is dependent on the exchange rate.
> already sent the satellites and you already employ the people who upkeep the infrastructure
These systems have marginal costs. Also, last I checked, Starlink has a pre-order backlog.
(My guess: churn is expensive for Starlink. Moreso than most telecoms. Buying goodwill and loyalty amidst rising costs of living is a smart move, despite it likely eating into margin. That or they're about to announce a massive deployment ramp-up.)
[1] https://blog.cambridgecoaching.com/how-to-determine-the-opti...
AFAIK Starlink's bandwidth bottleneck is on customer per area given, which means they are saturated in some hotsopts like SV or maybe London but not saturated in less dense areas.
Besides, they are building infrastructure all the time and even if there's a backlog today they might have seen some softness in the demand that can lead to losing out on competitors down the road.
It's very unlikely that the price change is altruistic.
Nobody suggested this. My original point was this is coming out of margins. It’s not boosting short-term profits. And it’s not aided by the strengthening dollar.
Maybe. But just looked. If I order now, Starlink promises to install at my central London location in 1-2 weeks.
It also describes any product or company that doesn't sell at fixed price and optimizes revenue.
You set your price to maximize total revenue, whether that is positive or negative.
It's the name of a model. Monopoly is a simplifying assumption as one need not consider the dynamics of price changes in a competitive system.
> set your price to maximize total revenue, whether that is positive or negative
Not always! Scaling costs aren't always linear. And service quality isn't inelastic. The revenue-maximizing price may be one at which you're losing money or delivering a shoddy product that will degrade your customer base in the long run.
In each legal domain (country ~ territory) Starlink operates in it has to install and operate one or more ground stations and back-haul into exchanges.
I realise there is a deal with Google for some of that - most likely it varies with the country, data-center locations, and exchange facilities.
But there are presumably ongoing costs to employ and support engineers to watch over the ground station physical assets and ensure back-up systems are always available?