Photo: SpaceX |Edited
Starlink internet has been a life savior for people living in areas without internet connection. While more expensive than landline connections, it’s also more affordable than other satellite-based services. This might not be true going forward since SpaceX announced a new pricing strategy based on the service’s availability in a certain area.
SpaceX started a new chapter when it announced the latest pricing strategy to its customers. Based on this, people living in areas with limited capacity must pay more, whereas those lucky to be in areas with excess capacity will see their bills decrease. This will change dynamically as SpaceX adds more satellites to its network (likely to ease capacity concerns) or more people adopt the Starlink service (causing congestion).
Based on a letter sent to its customers, the monthly fee increases by $10 in areas with limited capacity to $120 per month for residential customers. At the same time, the price drops by $20 in excess-capacity areas to $90 per month. For existing customers, the price change enters into effect from April 24, 2023, although new customers will be billed according to the updated fees immediately. Those who do not wish to continue service under the new prices can cancel their subscription and return the Starlink hardware for a full or half-refund, depending on when they purchased it.
As expected, the price changes SpaceX announced also affect subscribers of the Starlink for EVs service. As a mobile solution, this service can be used in both congested and excess-capacity areas. Anyway, to be on the safe side, SpaceX jacked up the price for all by $15, to the tune of $150 per month. This goes even if you use the satellite dish most of the time in an area with excess capacity.
For now, the price changes are only communicated in the U.S., but SpaceX would likely make a similar move in other markets. What’s interesting is that SpaceX doesn’t offer clues about which areas are considered “limited capacity” and which “excess capacity.” The distinction is in the email inbox for now, so expect surprises. Nevertheless, based on talks on social media, not all customers saw their rates increase.
The new pricing strategy is interesting because it is unusual to charge internet subscribers based on the network capacity. Telcos have been dreaming for years about a way to charge customers based on dynamic factors, such as peak hours and service availability. It is called yield management, but we can talk about geographic yield management in this case. As this sinks in with people in the industry, we will surely see more of this coming from other service providers.
Other services, however, have been historically monetized based on customers’ interests and the time of day. Tesla also charges different rates at its Supercharger stations based on peak and off-peak hours. It further limits charging to 80% at certain congested stations to serve more customers.
Based on a letter sent to its customers, the monthly fee increases by $10 in areas with limited capacity to $120 per month for residential customers. At the same time, the price drops by $20 in excess-capacity areas to $90 per month. For existing customers, the price change enters into effect from April 24, 2023, although new customers will be billed according to the updated fees immediately. Those who do not wish to continue service under the new prices can cancel their subscription and return the Starlink hardware for a full or half-refund, depending on when they purchased it.
As expected, the price changes SpaceX announced also affect subscribers of the Starlink for EVs service. As a mobile solution, this service can be used in both congested and excess-capacity areas. Anyway, to be on the safe side, SpaceX jacked up the price for all by $15, to the tune of $150 per month. This goes even if you use the satellite dish most of the time in an area with excess capacity.
For now, the price changes are only communicated in the U.S., but SpaceX would likely make a similar move in other markets. What’s interesting is that SpaceX doesn’t offer clues about which areas are considered “limited capacity” and which “excess capacity.” The distinction is in the email inbox for now, so expect surprises. Nevertheless, based on talks on social media, not all customers saw their rates increase.
The new pricing strategy is interesting because it is unusual to charge internet subscribers based on the network capacity. Telcos have been dreaming for years about a way to charge customers based on dynamic factors, such as peak hours and service availability. It is called yield management, but we can talk about geographic yield management in this case. As this sinks in with people in the industry, we will surely see more of this coming from other service providers.
Other services, however, have been historically monetized based on customers’ interests and the time of day. Tesla also charges different rates at its Supercharger stations based on peak and off-peak hours. It further limits charging to 80% at certain congested stations to serve more customers.
Wow. Was expecting mine to increase but it actually decreased. Nice! pic.twitter.com/57gIf6pW3u
— Dan Vang ???????? (@Tobi_Dawg) February 22, 2023
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