Elon Musk's Starlink grows unstoppably in Mexico: more customers, more profits

Elon Musk, through its Starlink satellite internet service, has rapidly positioned itself in the Mexican telecommunications market, surpassing local competitors such as Star Group and BAIT.

During the second quarter of 2024, Starlink billed 638 million pesos, equivalent to US$33 million, a figure that, although modest compared to Telmex's revenues, represents an important milestone for the company in its growth in the country.

This performance places Starlink as the eleventh group with the highest revenues in the telecommunications sector and the sixth company with the most fixed Internet customers. Since it began operations in 2021, it has managed to increase its market presence through a satellite service that covers areas where traditional options are limited or non-existent.

One of Starlink's main strengths lies in its ability to offer high quality service in rural and hard-to-reach areas, areas where telecommunications infrastructure is scarce or inefficient. 

This service has enabled remote homes and meeting centers to have access to the Internet, which represents a key strength in markets such as Mexico's, where a large part of the population does not have adequate access to connectivity services. 

Although the price of satellite internet is higher than other services, the added value of coverage in underserved areas allows Starlink to maintain a competitive advantage in this segment.

In terms of opportunities, the Mexican market remains attractive to Starlink due to the lack of infrastructure in many regions of the country. The demand for internet, especially in rural areas, creates a favorable environment for the expansion of satellite services.

With a base of 160,631 active subscriptions in Mexico, representing 4% of Starlink's overall business, the company has the potential to continue expanding its presence in the country. This trend is also visible in Latin America, where Brazil, with 224,000 accesses, represents 5% of Starlink's business, reinforcing the importance of the region for the company's growth strategy.

However, there are weaknesses that Starlink faces in the Mexican market. The main limitation lies in the high costs of its service, which could slow its mass adoption in urban areas where competition is strong and the rates for traditional internet services are considerably lower. Despite efforts to improve the accessibility of its offerings, price remains a crucial factor for many Mexican consumers seeking cheaper alternatives.

In addition, the competitive environment presents significant threats to Starlink. Telmex, the market leader in the Mexican Internet market, continues to dominate in terms of revenues and number of users.

The growing competition is not limited to the local market; globally, China is moving forward with the development of its own satellite constellation to offer a Starlink-like service, which could create a new scenario of technological and industrial rivalry.

In conclusion, while Starlink has demonstrated its ability to grow in a demanding market like Mexico, it faces both challenges and opportunities. Its strength in rural area coverage and its progress in the satellite Internet market give it a strategic position, but high costs and increasing local and global competition pose challenges that the company will have to overcome to consolidate its success.

Collaboration: Editorial Auge.