They're competing with Starlink not in the launch market. How the satellite gets into LEO is a different thing - and its own global market.
[edit] There's many ways into space. [1]
[1] https://en.wikipedia.org/wiki/List_of_launch_service_provide...
If you only consider US-allied launches, SpaceX represents a staggering 92% of market share. There are lots of space companies. They are not price competitive. At all.
It costs $2720/kg to launch payload with Falcon 9. The next closest, US-allied launch vehicle costs $9,167/kg. Falcon Heavy will extend the lead to $1500/kg.
You're not going to compete in building a constellation of satellites using launches that cost 3.5-6.1x the price (depending on when they get to launching vs readiness of Heavy)
The AST SpaceMobile BlueWalker 3 weighs 1500kg. They want to launch 243 satellites. The price difference between using Falcon 9 and Ariane 5G is $2.4B. AST SpaceMobile's market cap is $675M.
The Starlink terminal is great for grid-tied residential/RV/ship-sized home internet. It runs in the Ku and Ka bands at something like 65 watts. It's astonishing that they can get some functionality with their T-mobile partnership, but for the most part, it's not optimized for that.
What fraction of Starlink (or, hypothetically, AST SpaceMobile) expenditures is satellite launch cost per kg? The ATT market cap is $120B, if they can partner with/aquihire a $675M satellite company to stay competitive then even a $2.4B extra expense is not a huge deal. Sure, Starlink could do the same, but ATT has a lot of inertia. SpaceX won't knock them out of the market just by flying another set of satellites a little higher with some lower-bandwidth antennas.
If I could get voice and text anywhere on the planet (namely, in the woods in northern Michigan, population density ~1 person per square mile, or offshore on Lake Michigan, population density ~0 per square mile), that would be a game changer. Specifically, everyone knows that the cell networks lie about their coverage maps, this would let them genuinely say they have coverage everywhere. I'm currently using Garmin InReach for off-grid connectivity, not sure I'd dump that hardware and network for an esoteric feature that runs on my less-reliable glass slab, but a lot more people have glass slabs than InReach.
If costs were higher, competitors would probably not launch on SpaceX rockets. They were also not a “safe” choice until recently. They’ve also been able to capture the market and put enormous pressure on their competitors. I’m certain there are other reasons.
I’d love to hear an actual business person weigh in on this.
It's pretty well known nobody pays anywhere close to list price for airplanes from Boeing and Airbus. I've heard discounts as much as 40-50% for planes but the actual numbers are pretty closely guarded. Wouldn't surprise me in the least if this were happening in the launch business.
I'm probably not an "actual business person" though, for whatever definition you're using :)
Sign... this is just not how the space industry works. Europe, China, India and Dod/NASA simply won't let this happen.
Depends on the elasticity of demand. Maybe if they doubled the price the demand would more than halve, resulting in a lower revenue. It’s hard to tell.
They want to grow the industry as a whole. Remember their real ultimate goal is going to Mars and they don't want to be the only space company in existence to want to do that.
Just like the "Paypal Mafia" of old there's starting to be a "SpaceX Mafia" of former SpaceXers rich off of SpaceX stock starting their own space companies and teaming up with SpaceX to move things forward.