Is Elon Musk defecting to the Putin camp? Dispute over alleged millions of costs

The dispute over US entrepreneur Elon Musk’s Kremlin-related comments is coming to a head: Musk, who continues to insist that he is “pro-Ukraine”, recently drew attention to himself with irritating statements about a possible “peace plan”. However, another development could be much more dramatic: The tech billionaire has threatened to cut off free internet via the Starlink network in Ukraine – allegedly for cost reasons.

The Starlink satellite Internet allows the Ukrainian military to access the Internet even in combat zones, ensuring an important part of Ukrainian military communications. Musk’s company SpaceX, which operates the Starlink network, had made thousands of devices available to Ukraine.

But the entrepreneur no longer wants to pay the costs. SpaceX has millions of dollars in costs that Musk says he can no longer bear alone. At the same time, reports of the failure of Starlink devices at the front are increasing: numerous Ukrainian units report that they had no network in certain areas. Just a technical problem? Or is Musk shutting down individual terminals to thwart Ukrainian advances, as some in Ukraine suspect?

Why is?

CNN, citing documents from September, reported that SpaceX had asked the US Department of Defense to cover the cost of using satellite internet in Ukraine. In July, Ukraine’s Supreme Commander, Valeryi Zalushnyi, requested nearly 8,000 additional Starlink terminals, CNN wrote, citing additional documents.

Why is Musk threatening to take out the satellite?

According to Musk, it is about the high costs: According to its own statements, SpaceX currently has costs of about 20 million dollars (20.6 million euros) per month.

According to a report in the Financial Times, Ukrainian troops recently reported failures of Starlink devices on the frontline. The system therefore plays a central role in the Ukrainian army’s counter-offensive, which has been going on for weeks. In response, Musk tweeted, “What happens on the battlefield is confidential.”

Can Musk Shut Down the Starlink Internet in Ukraine?

Yes. Like all network devices, Starlink terminals each have a unique ID number. For example, Starlink has noted exactly which terminals have been supplied by Musk directly to Ukraine and have since – as Musk claims – caused millions in costs. When it comes to maintenance of the devices, the internet could be turned off for them. Just like Vodafone or Telekom can deactivate an internet connection whose bill has not been paid.

More exciting, though, is whether Musk can block its satellite internet in specific regions as well — and how small-scale this is possible.

He should be able to do that: every Starlink terminal is equipped with a GPS receiver, which can be used to determine the position of the terminal to within a few meters during operation. This is technically necessary so that it is clear with which satellites the receiver must communicate. At the same time, this also makes it technically possible to deactivate Starlink terminals exactly along the course of the front – if this is known.

By the same principle, Starlink operation can also be prevented in entire regions – such as the Crimean peninsula. According to American entrepreneur Ian Bremmer, Musk had personally informed him that he had rejected a Ukrainian request to do so. Musk fears this will lead to an escalation, Bremmer said on Twitter.

How important is Starlink for Ukraine?

A few days after the start of the Russian war of aggression, SpaceX activated the Starlink satellite internet service in Ukraine in late February and provided the necessary reception systems. The system establishes high-speed internet connections via its own satellites. It serves as an important means of communication for both civilians and the Ukrainian military in areas where mobile communications and the internet are no longer accessible due to the destroyed infrastructure.

While Starlink is not the only provider of private satellite internet, it is the only one that can actually be used, especially for the military. Older providers that work with geostationary satellites do not offer enough bandwidth. In addition, the satellite antenna has to be aligned manually, which would be impractical especially in the field.

There are also competing companies, such as Starlink, who rely on low-orbit mini satellites – such as OneWeb, Projekt Kuiper (Amazon) or Telesat. But only OneWeb is already in use, but it hardly uses mobile terminals and is generally not that well developed. Starlink is actually the only real satellite alternative here.

How many devices are in use?

According to a tweet from Elon Musk, there are currently about 25,000 Starlink terminals in use in Ukraine.

CNN, citing the documents sent to the Pentagon, writes that the number of terminals donated by Musk is about 20,000 units. The other devices are likely to be freely purchased terminals.

What do the Starlink terminals and ongoing operations cost?

In Germany Starlink charges 460 euros for the terminal, plus a monthly fee of 80 euros if you want to use the terminal in different locations, 100 euros.

A Ukrainian software developer raising money to support the military tweeted that he had bought about 50 terminals for between $400 and $500 in Poland, the Czech Republic and Germany and is now paying $60 per terminal for the service. Previously it was $120.

Based on these numbers, 20,000 terminals (priced individually at $450) cost a total of $9 million. If one assumes that for all 20,000 devices from March to October an average monthly price of USD 90 would have to be paid (which is clearly an exaggeration), this would have been USD 14.4 million, in that’s a total of 23.4 million US dollars plus shipping costs.

However, Musk tweeted that Starlink has already incurred costs of $80 million so far. The number is either significantly too high or current prices to customers are well below the actual cost to the company.

Who paid for the devices and who bears the running costs?

Exactly that is unknown. Of the approximately 25,000 terminals in Ukraine, probably a few thousand are bought and financed entirely by Ukrainians. CNN reports that, according to the Starlink documents, 85 percent of the approximately 20,000 terminals reportedly donated have been paid for in whole or in part by the United States or other countries.

They also allegedly paid about 30 percent of running costs, which Starlink cited to the Pentagon as $4,500 per unit per month — more than 50 times the price Starlink charges its customers for it.

Melnyk: “Come on, Elon Musk”

Elon Musk had proposed a “solution” to the war in Ukraine earlier this month on Twitter. Musk had said Ukraine should be given neutral status, renounce the Russian-annexed Crimean peninsula and initiate UN referendums on state affiliation with the other Russian-occupied territories. This ‘peace plan’ had been approved by the Kremlin. It is positive that someone like Elon Musk is looking for a peaceful way out of the situation, Kremlin spokesman Dmitry Peskov said.

Ukrainian Ambassador Andriy Melnyk reacted angrily to Musk’s proposal, writing: “Fuck off is my very diplomatic response to you Elon Musk”. (English: «Piss off is my very diplomatic answer to you Elon Musk»)

US political strategist Jason Jay Smart then made the connection on Twitter that Musk’s Starlink announcement came just days after Melnyk’s abusive tweet. Musk indirectly confirmed the process.

Secret conspiracy between Musk and Putin?

Earlier, a message had caused a stir after Musk allegedly spoke to Putin about Ukraine. The Tesla and SpaceX boss shortly afterwards denied the meeting, saying he had spoken with the Russian president about 18 months ago. However, it was about space travel. American entrepreneur Ian Bremmer, who made Musk’s conversation with Putin public in his newsletter, disagreed — defending his statement.

Dmitri Alperovitch also criticized Musk’s behavior: the Russia expert does not see financing as the biggest problem, but the billionaire’s involvement in the war through his statements. “This has implications for the Ukrainian counter-offensive,” he said.

Ukraine will find a way to keep Starlink operational, said Mykhailo Podoliak, an adviser to Ukrainian President Zelenskyy. Musk “helped us survive the war’s most critical moments,” Podoljak said recently. At the same time, he showed understanding for Musk’s turnaround: in business you are entitled to your own strategies. However, Starlink is expected to function stably during the negotiations.

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