Of all the products and services offered by Elon Musk and his various companies, Starlink, the secure satellite Internet access service, has in recent months become globally prominent.
Now available on all continents, Starlink has become a window into the world for people living under dictatorships, in countries devastated by natural disasters, and in countries at war.
The product was propelled to the world stage by the Russian war on Ukraine. Mask sent Starlink terminals to the Ukrainians after the unprovoked Russian invasion on February 24.
Starlink is an expensive service
Starlink is especially used by civilians in areas under attack by Russia and in areas where communications infrastructure has been destroyed. Government officials and armed forces use the service on the ground because it is safe.
The company’s satellites help Ukrainian military aircraft destroy Russian tanks and army trucks. The drones are equipped with anti-tank grenades for firing at targets.
More than 100 cruise missiles were attacked [Ukraine’s] Ukraine’s Deputy Prime Minister and Minister of Digital Transformation, Mikhailo Fedorov, said on Twitter on October 12: “With Starlink, we quickly restored connectivity in sensitive areas. Starlink remains an essential part of critical infrastructure.”
About 20,000 Starlink space units have been shipped to Ukraine. It is provided and partially funded by SpaceX, USAid, Poland, the European Union and private companies, according to Ukraine’s state news agency Ukrinform.
All of this comes at a cost, as Musk recently reminded the world.
On October 7, Musk said providing Starlink in Ukraine “has cost SpaceX $80 million and will exceed $100 million by the end of the year.”
Musk and his space company, SpaceX, which supplies Starlink, are looking to create Starlink, which will generate about $30 billion in annual revenue by 2025, before selling the unit or going public.
SpaceX cannot fund service to Ukraine indefinitely
In this context, the company issued a warning to the Pentagon, saying that it cannot continue to fund the service in Ukraine as it has done so far.
So SpaceX asked the US government to subsidize Starlink’s cost to Ukraine, at a cost of about $120 million for the rest of the year, according to CNN, which transmitted a letter addressed to the Pentagon. The total figure could reach $400 million for the next 12 months.
If the Pentagon does not step in with the funding, the service risks being shut down.
“We are not in a position to donate stations to Ukraine, or fund existing stations for an indefinite period of time,” SpaceX’s director of government sales wrote to the Pentagon, CNN reported.
Musk repeated this warning on Twitter on October 14, after the article was published, which also states that in July Ukrainian authorities asked Musk to acquire an additional 8,000 stations from Starlink.
The tech mogul cautioned that “SpaceX is not asking for past expenses to be reimbursed, but it also cannot fund the current system indefinitely *and* send several thousand terminals that have up to 100 times more data usage than average households.”
“This is unreasonable,” he added.
“In addition to terminals, we have to create, launch, maintain and renew satellites and ground stations, and pay telecom companies to access the Internet through gateways,” he continued. “We also had to defend against cyberattacks and jamming, which are getting more and more difficult.”
He then revealed the total cost: “The burn is close to $20 million a month.”
Starlink is still losing money
He added that Starlink was not yet making money. But he set himself the goal when SpaceX launched the service not to go bankrupt.
“Starlink is still losing money!” Qutb said. “Insanely hard on a [low-Earth-orbit] Constellation Etisalat to avoid bankruptcy – this was the fate of every company that tried it before. When asked about Starlink’s goal at a space conference, I said, “Don’t go bankrupt.”
Finally, the CEO added that by asking the Pentagon to pay for Starlink in Ukraine, he was merely following the advice of the Ukrainian ambassador to Germany, who used an expletive when Musk proposed a plan to end the war between Russia and Ukraine.
The plan, unveiled on October 3, reversed Russian demands. The techno king has asked Ukraine to recognize the Crimea region, which Russia annexed in 2014, as Russian territory.
Under the terms, Kyiv also had to agree to remain neutral on the international stage. Ukraine will have to abandon the idea of membership in NATO and the European Union, two organizations that Russia sees as a threat to its sovereignty.
This plan was widely rejected by Ukrainians, including President Volodymyr Zelensky. But the strongest reaction came from Andrei Melnik, Ukraine’s ambassador to Germany, who said “Fuck” for Musk’s diplomatic efforts.
“We’re just following his recommendation,” Musk said on October 14.