Pentagon spars with SpaceX over Starlink price hike during Iran war
SpaceX says the drones use a higher service tier and the Pentagon ultimately agreed to pay nearly double per LUCAS unit, Reuters reported.
- On May 26, SpaceX executives concluded the Pentagon should pay significantly more for Starlink access as U.S. LUCAS kamikaze drones guided by the network made visible gains in the Iran war, arguing the military had been underpaying about $5,000 per terminal for service worth closer to $25,000.
- Tensions emerged quickly after the Pentagon launched its February 28 assault on Iran, where Starshield terminals were already deployed across more than a dozen drone systems; SpaceX's constellation of roughly 10,000 satellites accounts for more than 60% of those in orbit, giving the company singular leverage.
- SpaceX proposed charging as much as $500 million up front plus $100 million monthly to operate the capability, prompting alarm from defense officials; Pentagon officials argued the $25,000 price tag was designed for aircraft, not drones using Starlink connection for only minutes before detonating on impact.
- Deputy Secretary of Defense Steve Feinberg and other senior officials remained uneasy despite agreeing to the higher fees; Pentagon officials met with Terrence O'Shaughnessy, a retired four-star Air Force general leading SpaceX's defense business, during an April ceasefire while considering 3,500 additional Starshield subscriptions worth hundreds of millions annually.
- SpaceX's IPO next month could value the company at roughly $1.75 trillion, amplifying Musk's leverage over Pentagon operations spanning satellite launch, Starlink connectivity and military variants, while recalling 2022 when Musk ordered Starlink service switched off in parts of Ukraine, disrupting a key counteroffensive.
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67 Articles
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Elon Musk's SpaceX Reportedly Raised Pentagon Starlink Costs During Iran War
Elon Musk's SpaceX clashed with the Pentagon over a sharp increase in Starlink satellite service costs during the U.S. war with Iran, according to a report that triggered political blowback.
SpaceX vs. Pentagon: The Starlink Price War
The article covers the tensions between SpaceX and the Pentagon over Starlink service pricing, particularly its use in military applications. As U.S. military operations in Iran relied on SpaceX’s Starlink, disagreements over pricing and service tiers arose, prompting the Pentagon to pay higher fees amid increasing reliance on SpaceX.
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