
Exclusive: Musk’s SpaceX says it can no longer pay for critical satellite services in Ukraine, asks Pentagon to pick up the tab
- by CNN
- Oct 13, 2022
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Since they first started arriving in Ukraine last spring, the Starlink satellite internet terminals made by Elon Muskâs SpaceX have been a vital source of communication for Ukraineâs military, allowing it to fight and stay connected even as cellular phone and internet networks have been destroyed in its war with Russia.
So far roughly 20,000 Starlink satellite units have been donated to Ukraine, with Musk tweeting on Friday the âoperation has cost SpaceX $80 million and will exceed $100 million by the end of the year.â
But those charitable contributions could be coming to an end, as SpaceX has warned the Pentagon that it may stop funding the service in Ukraine unless the US military kicks in tens of millions of dollars per month.
Documents obtained by CNN show that last month Muskâs SpaceX sent a letter to the Pentagon saying it can no longer continue to fund the Starlink service as it has. The letter also requested that the Pentagon take over funding for Ukraineâs government and military use of Starlink, which SpaceX claims would cost more than $120 million for the rest of the year and could cost close to $400 million for the next 12 months.
âWe are not in a position to further donate terminals to Ukraine, or fund the existing terminals for an indefinite period of time,â SpaceXâs director of government sales wrote to the Pentagon in the September letter.
Among the SpaceX documents sent to the Pentagon and seen by CNN is a previously unreported direct request made to Musk in July by the Ukrainian militaryâs commanding general, General Valerii Zaluzhniy, for almost 8,000 more Starlink terminals.
In a separate cover letter to the Pentagon, an outside consultant working for SpaceX wrote, âSpaceX faces terribly difficult decisions here. I do not think they have the financial ability to provide any additional terminals or service as requested by General Zaluzhniy.â
The documents, which have not been previously reported, provide a rare breakdown of SpaceXâs own internal numbers on Starlink, detailing the costs and payments associated with the thousands of terminals in Ukraine. They also shed new light on behind-the-scenes negotiations that have provided millions of dollars in communications hardware and services to Ukraine at little cost to Kyiv.
The Pentagon confirmed they received correspondence from SpaceX about the funding of the Starlink satellite communications product in Ukraine, a statement from Deputy Pentagon Press Secretary Sabrina Singh said Friday.
Earlier in the day, Singh confirmed the Pentagon had been in communication with SpaceX but did not say whether it was over the funding of the Starlink satellite communication product.
Musk on Friday said that in asking the Pentagon to pick up the bill for Starlink in Ukraine, he was following the advice of a Ukrainian diplomat who responded to Muskâs Ukraine peace plan earlier this month, before the letter was sent to the Pentagon, with: âF*** off.â
Ukraineâs ambassador to Germany, Andrij Melnyk, responded earlier this month to Muskâs claimed peace plan for Russiaâs Ukraine war by saying: âF*** off is my very diplomatic reply to you @elonmusk.â
âWeâre just following his recommendation,â Musk said on Friday, responding to a tweet that referenced CNNâs reporting and Melnykâs comments, even though the letter SpaceX sent to the Pentagon was sent before the Twitter exchange.
Reports of outages
The letters come amid recent reports of wide-ranging Starlink outages as Ukrainian troops attempt to retake ground occupied by Russia in the eastern and southern parts of the country.
Sources familiar with the outages said they suddenly affected the entire frontline as it stood on September 30. âThat has affected every effort of the Ukrainians to push past that front,â said one person familiar with the outages who spoke to CNN on condition of anonymity to discuss sensitive conversations. âStarlink is the main way units on the battlefield have to communicate.â
This photograph taken on September 25 shows an antenna of the Starlink satellite-based broadband system donated by US tech billionaire Elon Musk in Izyum, Kharkiv region, amid the Russian invasion of Ukraine.
Yasuyoshi Chiba/AFP/Getty Images
There was no warning to Ukrainian forces, a second person said, adding that now when Ukraine liberates an area a request has to be made for Starlink services to be turned on.
The Financial Times first reported the outages which resulted in a âcatastrophicâ loss of communication, a senior Ukrainian official said. In a tweet responding to the article, Musk didnât dispute the outage, saying that what is happening on the battlefield is classified.
SpaceXâs suggestion it will stop funding Starlink also comes amid rising concern in Ukraine over Muskâs allegiance. Musk recently tweeted a controversial peace plan that would have Ukraine give up Crimea and control over the eastern Luhansk and Donetsk regions.
After Ukrainian President Volodymyr Zelensky raised the question of who Musk sides with, he responded that he âstill very much support[s] Ukraineâ but fears âmassive escalation.â
Musk also argued privately last month that Ukraine doesnât want peace negotiations right now and that if they went along with his plan, âRussia would accept those terms,â according to a person who heard them.
âUkraine knows that its current government and wartime efforts are totally dependent on Starlink,â the person familiar with the discussions said. âThe decision to keep Starlink running or not rests entirely in the hands of one man. Thatâs Elon Musk. He hasnât been elected, no one decided to give him that power. He has it because of the technology and the company he built.â
On Tuesday Musk denied a report he has spoken to Putin directly about Ukraine. On Thursday, when a Ukrainian minister tweeted that Starlink is essential to Ukraineâs infrastructure, Musk replied: âYouâre most welcome. Glad to support Ukraine.â
âThe gall to look like heroesâ
More than seven months into the war, itâs hard to overstate the impact Starlink has had in Ukraine. The government in Kyiv, Ukrainian troops as well and NGOs and civilians have relied on the nimble, compact and easy-to-use units created by SpaceX. Itâs not only used for voice and electronic communication but to help fly drones and send back video to correct artillery fire.
CNN has seen it used at numerous Ukrainian bases.
Elon Musk pauses and looks down as he speaks during a press conference at SpaceX's Starbase facility near Boca Chica Village in South Texas on February 10, 2022.
Jim Watson/AFP/Getty Images
âStarlink has been absolutely essential because the Russians have targeted the Ukrainian communications infrastructure,â said Dimitri Alperovitch, co-founder of the Silverado Policy Accelerator, a think tank. âWithout that theyâd be really operating in the blind in many cases.â
Though Musk has received widespread acclaim and thanks for responding to requests for Starlink service to Ukraine right as the war was starting, in reality, the vast majority of the 20,000 terminals have received full or partial funding from outside sources, including the US government, the UK and Poland, according to the SpaceX letter to the Pentagon.
SpaceXâs request that the US military foot the bill has rankled top brass at the Pentagon, with one senior defense official telling CNN that SpaceX has âthe gall to look like heroesâ while having others pay so much and now presenting them with a bill for tens of millions per month.
According to the SpaceX figures shared with the Pentagon, about 85% of the 20,000 terminals in Ukraine were paid â or partially paid â for by countries like the US and Poland or other entities. Those entities also paid for about 30% of the internet connectivity, which SpaceX says costs $4,500 each month per unit for the most advanced service. (Over the weekend, Musk tweeted there are around 25,000 terminals in Ukraine.)
In his July letter to Musk, Ukraineâs commander-in-chief, Gen. Zaluzhniy, praised the Starlink unitsâ âexceptional utilityâ and said some 4,000 terminals had been deployed by the military. However, around 500 terminals per month are destroyed in the fighting, Zaluzhniy said, before asking for 6,200 more terminals for the Ukrainian military and intelligence services and 500 per month going forward to offset the losses.
Defense MInistry of Ukraine
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