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With thin margins on rocket launches, SpaceX may look to satellite Internet business to boost revenue

Private space exploration is a relatively new thing, and it came up very suddenly too. It seemed as if, one moment rockets and space were something only government backed companies dealt in and the next, you had a whole bunch of companies –SpaceX, BlueOrigins and so on– offering to place your satellite into space.

Amid all the companies that are offering to send your load to space, SpaceX has emerged as one of the leaders. The company has managed to achieve this position by virtue of a lot of factors — chief among them its economy. Measures like reusable rocket technology have enabled the company to practice an economy to scale that has allowed it to offer some of the cheapest prices for sending stuff into space, out there.

However, when you are dealing with rockets and satellites that cost in the hundreds of millions of dollars each — well, a single accident is enough to setback all your hard work. The September explosion that destroyed SpaceX’s Falcon 9 rocket along with the satellite, probably impacted the company’s finances in a big way.

And those  finances aren’t too great either. Sure, SpaceX has managed to sign contracts for almost $10 Billion worth of Rocket Launches however, it is not seeing that Money just yet. Plus, the company has been able to attract this amount of contracts because among other things, it is one of the cheapest options available. And it is among the cheapest because the company’s margins are significantly lower than those of competitors.

Add to that the two explosions the company faced in 2015 and 2016 and you find yourself looking at a business that is very expensive to run. Sure, Elon Musk is rich, but no one is going to keep pumping money into a business that keeps returning losses. Plus, accidents are something you will pretty much have to keep as a factor. They can happen anytime and the more launches you do, the more is the probability that something will go wrong.

So yes, the company may be looking at other prospects and if SpaceX’s fillings with the FCC are anything to go buy, the space venture firm may be turning to focus its attention upon something that has been the object of attention for almost every other tech major: Global Internet.

Facebook and Google are only two of the companies trying to research ways of providing Internet to the world. Hot air balloons, Drones and other such devices are being tried. However, SpaceX’s plan aims a bit higher — literally.

In its filings with the FCC, the company requested to be allowed to deploy over 4,000 satellites into space, each the size of a small car. Together, these satellites are expected to be able to provide Internet to a significant portion of the world. And the company is apparently banking upon this plan to work, so that it can offset its losses from everywhere else and start generating profits.

As for why it needs those profits, well its a business and businesses are meant to generate profits however, we must also factor in Elon Musk’s obsession with setting up a civilization on Mars. The Tesla, SpaceX founder and CEO is fixated upon the task and considering all that he is already achieved, it wouldn’t surprise me if he actually succeeds in backing humanity’s first steps on the red planet.

However, it is not going to be an easy task and as Musk himself noted, it will require a lot of money. Speaking about SpaceX’s satellite manufacturing plant that was being set up in Seattle, Musk had said,

This is intended to be a significant amount of revenue and to help fund a city on Mars. Looking at the long term, what’s needed to create a city on Mars? Well, one thing’s for sure – a lot of money. So we need things that will generate a lot of money

And those things, might just number somewhere around 4,000. With Google’s shutdown of Project Titan, SpaceX’s satellites are looking more relevant than ever.

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With thin margins on rocket launches, SpaceX may look to satellite Internet business to boost revenue


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