SpaceX reportedly fed up with providing free Starlink to Ukraine
- Reference: 1665774013
- News link: https://www.theregister.co.uk/2022/10/14/spacex_reports/
- Source link:
Claims that Musk's satellite company were unhappy with the costs of sending Starlink base stations and providing service to Ukraine come [1]via CNN , which reported yesterday that it had obtained a copy of a letter sent by SpaceX to the Pentagon asking the military to start paying its fair share.
It's worth noting that there are number of folks paying for Starlink service in Ukraine, either Ukrainians themselves or donors.
[2]
"We are not in a position to further donate terminals to Ukraine, or fund the existing terminals for an indefinite period of time," that letter apparently stated. Per CNN, which did not share a full copy of the correspondence, SpaceX claimed its Ukrainian operations would cost more than $120 million for the rest of the year, and nearly $400 million for the next 12 months.
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In effect, Musk is saying: here's some free gear and satellite internet services for those suffering in Ukraine, though now that everyone thinks I'm a hero, I might just cancel it and have others pay for it all. At least one US official is [5]exasperated by the threat.
SpaceX's letter to the Dept of Defense was reportedly sent in September, which means that Musk's recent tussles with Ukrainian officials on Twitter, and his suggestion that Ukraine gives in to Russia and ends the war, have all come since. That makes what Kyiv Post correspondent Jason Jay Smart tweeted a bit chronologically off, perhaps, but still relevant to Musk-Kyiv relations.
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Smart [7]said this morning that the SpaceX letter came days after outgoing Ukrainian ambassador to Germany Andrij Melynk told Musk to "f*** off" (in response to Musk's [8]ill-judged Ukraine [9]capitulation plan ) on Twitter.
The September letters to the Pentagon, in which SpaceX threatens to pull the plug on his free service, seemingly predate Melynk's October 3 outburst. Still, Musk's response to Smart today is unlikely to help things: "We're just following [Melynk's] recommendation," Musk said.
Musk also [10]responded several times on other threads around the CNN story earlier today, saying, among other things: "Also, Starlink is still losing money! It is insanely difficult for a LEO communications constellation to avoid bankruptcy – that was the fate of every company that tried this before."
Backing up a step
Musk [11]claimed on October 4 that Starlink had lost more than $80 million (£71m) since entering Ukraine, but those numbers are hard to verify. Musk has also [12]claimed Starlink is "far from cash flow positive."
Of late there has been a significant rise in the [13]price of Starlink equipment and service, which could possibly indicate [14]potential problems with its pricing model and earnings [15]projections .
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Meanwhile, according to The Washington Post, SpaceX isn't keeping close track of how the Ukraine terminals have been funded.
It noted March [17]comments earlier this year from SpaceX president Gwynne Shotwell that she "[didn't] think the US has given us any money to give terminals to the Ukraine."
The WaPo report went on to report that the United States Agency for International Development (USAID) [18]had purchased at least 1,500 terminals from SpaceX, and at a markup.
The paper claimed to have seen documents from USAID showing the agency paid $1,500 per Starlink terminal, while the standard price for consumers is $600 for the kit, and $110 per month for service.
SpaceX has also donated several thousand terminals with three months of unlimited data, WaPo said. All in all, the US government has paid approximately $3 million to SpaceX for equipment shipped to Ukraine.
Souring relations
According to the documents CNN saw, Ukrainian General Valerii Zaluzhnyi asked for an additional 8,000 Starlink terminals in July, which a SpaceX consultant reportedly said wouldn't be financially possible.
It's unknown how Ukraine took that response, but in the months since Musk has seemingly adopted a petulant attitude toward the country, tweeting suggestions about a peace plan for Ukraine that included plenty of Russian appeasement.
[19]Musky scent? Billionaire launches fragrance: Burnt Hair
[20]Lufthansa bans Apple AirTags on checked bags
[21]Pro-Putin goons claim responsibility for blowing US airport websites offline
[22]That thing to help protect internet traffic from hijacking? Here's how to break it
According to the Financial Times, Starlink service in Ukraine has been sporadic and suffered from [23]days-long outages in front-line territory as Ukrainian troops push east and retake land seized by Russia.
While service was restored in several areas not long after initial reporting, the Financial Times [24]said that Ukrainian officials have ruled out technical malfunctions or Russian jamming efforts.
There hasn't been any formal fingerpointing over the outages, and Musk has said that what's happening on the battlefield is classified – so don't expect an official explanation. We might get an inflammatory tweet, though. ®
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[1] https://www.cnn.com/2022/10/13/politics/elon-musk-spacex-starlink-ukraine/index.html
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/science&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y0nb@QC9tY23Jnlx8AJbZwAAAIc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/science&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y0nb@QC9tY23Jnlx8AJbZwAAAIc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/science&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y0nb@QC9tY23Jnlx8AJbZwAAAIc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://twitter.com/DanLamothe/status/1580905962969653248
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/science&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y0nb@QC9tY23Jnlx8AJbZwAAAIc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://twitter.com/elonmusk/status/1580819437824839681
[8] https://www.theregister.com/2022/10/04/it_consultants_sanctions/
[9] https://twitter.com/elonmusk/status/1576969255031296000
[10] https://twitter.com/elonmusk/status/1580806048050343936?s=20&t=uY5A6qrcqhTyjnDRZGFHRQ
[11] https://twitter.com/elonmusk/status/1577081450263769089
[12] https://twitter.com/elonmusk/status/1577339522383241216
[13] https://www.theregister.com/2022/03/23/starlink_spacex_spendy/
[14] https://www.fool.com/investing/2022/02/21/spacexs-starlink-has-a-price-problem/
[15] https://www.fool.com/investing/2021/02/14/elon-musk-predicted-starlink-would-generate-30-bil/
[16] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/science&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y0nb@QC9tY23Jnlx8AJbZwAAAIc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[17] https://www.cnbc.com/2022/03/22/elon-musk-spacex-thousands-of-starlink-satellite-dishes-sent-to-ukraine.html
[18] https://www.washingtonpost.com/politics/2022/04/08/us-quietly-paying-millions-send-starlink-terminals-ukraine-contrary-spacexs-claims/
[19] https://www.theregister.com/2022/10/12/musk_launches_fragrance/
[20] https://www.theregister.com/2022/10/10/lufthansa_airtag_ban/
[21] https://www.theregister.com/2022/10/10/ddos_us_airport_websites/
[22] https://www.theregister.com/2022/10/09/internet_traffic_routing_defense/
[23] https://www.ft.com/content/9a7b922b-2435-4ac7-acdb-0ec9a6dc8397
[24] https://www.ft.com/content/29ed76b9-d6bf-428c-8673-af48b7ed70df
[25] https://whitepapers.theregister.com/
Most of that wealth is tied up in stocks.
His companies have already contributed far more to Ukraine than most others. Many companies have delivered weapons to Ukraine -- how many of them did that pro bono? (tempting to ask how many of them also sold stuff to the russkies, but hopefully we westerners have a handle on that)
> His companies have already contributed far more to Ukraine than most others.
That's a bit of a paradox in the perception of charity. If you donate to charity, and then stop, you get far more shit thrown at you than someone who never donated to begin with.
I'm not even talking about Musk specifically, and also Musk is a weird special case in many ways; it's a generalized problem with how society perceives charity.
See also, for example, Bill Gates - funds charity projects with enormous amounts of money, and gets a lot of flak either because they are not the "right" projects, or because he still has enormous amounts of money yet, or because it's perceived to be just a PR stunt. These might be good points, if not for the fact that, meanwhile, there are other hyper-rich out there who never donated a single dollar, and yet they hardly get criticism for that, if ever.
This is problematic, because it's a disincentive to donating, and an incentive to just staying out of the public eye and enjoying your money.
He's clearly ambivalent at best about Ukraine
His random tweet suggesting Ukraine should just hand over a bunch of its territory (at a time when Russian forces are totally on their heels and retreating on all fronts) is about as pro-Putin as you can get without openly saying so.
Probably the only reason he wanted to donate the Starlink stuff was publicity, now he thinks he's got all the value he's going to get out of that so he's looking for the US government to fund him - no doubt at full retail price when if he's worried about "losing money" he could offer the hardware and service at SpaceX's actual cost.
More and more he proves himself to be a real slimeball who cares only about personal publicity and doesn't really have any empathy for anyone else.
Re: He's clearly ambivalent at best about Ukraine
> Probably the only reason he wanted to donate the Starlink stuff was publicity
Exactly. This is just a repeat of his cack-handed "help" in the case of that Thai cave rescue. Make a gesture, expect to bask in everyone's adulation, and then get peevish when it turns out that reality doesn't let you play the part of the messiah.
As someone said below - brilliant businessman, but he has the interpersonal skills of a petulant 6-year-old.
Maybe he just doesn't want to fund yet another pointless American proxy war?
Ukraine cannot "win" unless NATO gets directly involved. If NATO gets involved it's WW3 and nobody wants to start WW3 over the most corrupt nation in Europe.
Are you sure about that Sergei? Ukraine is pushing Russia back, and I suspect that Putin backing off on missile attacks today has rather more to do with a limited supply of munitions than any change of heart on his part.
After all, if Russia is so all powerful why is it attacking cities with surface to air and anti shipping missiles rather than weapons that are actually designed for the task?
No one wants nuclear war (no one in their right mind wants war at all), but what alternative is there? We let Russia run roughshod over Ukraine. What next? Hungary? Poland? East Germany? Where do you draw the line? France? The UK?
Let us hope that there are enough sane (or saner) minds in the duma and in the Russian armed forces that Putin can be deposed sooner rather than too late. And let’s hope that the leaders in the west will spend money on rebuilding Russia and it’s economy, rather than focussing on punitive reprisals, if that day comes.
"the most corrupt nation in Europe."
That would be Russia, right? Or do we still count it in Europe?
So get your terminals in place for "free" in a PR stunt. Then bait and switch and expect payment for something they're already using and embedded. Utterly dick move from a man who whilst is unquestionably brilliant when it comes to ambition and vision, is also one of the world's greatest morons.
I think it's better than that. Shipped 20,000 terminals, wants $400m, how much does that work out to per month for the service? I thought Starlink only cost around $80/month. But the board or other investors may be asking questions given Starlink is it's own person. I'm sure Musk could look down the back of his sofa and find the money personally to pay the subs, if this was his decision rather than his company. Unless Musk is in the process of losing money faster than Starlink. All those launches can't be cheap, even as inside(r) sales.
Something missing in the math
I'm struggling with the math. Market price on the terminals is $600. Even at 40k terminals that only comes to $24m. The cost of the satellites is a fixed cost. Operating them will remain regardless of whether service is being provided to Ukraine. The $80 or $110 month subscription fee is revenue, not a cost. So is SpaceX paying $375m a year in backhaul just for Ukraine?
If SpaceX isn't turning a profit, tax credits aren't helpful. And I doubt Ukraine is recognized by the IRS as a charity anyway. I personally wouldn't be opposed to the US gov't reimbursing SpaceX retail price on the terminals they donated. (retail, because with supply chain shortages these terminals would have probably been sold). And then verifiable operating costs for Ukraine customers. (not full subscription costs, because in an open market they wouldn't have those customers)
But $400m a year, not a chance. Even at full subscription rate those customers would only contribute ~$53m. (assuming 40k terminals at $110/mo)
What a colossally self entitled prick. A man who flings shit at the wall to see if it will stick - often other people’s shit. Seriously - does anyone think that the Tesla car was his brain child? The battery tech came from Panasonic, the chassis (at least initially) came from Lotus. The software came from hundreds of talented software developers. By and large, the only ideas he’s come up with are the sort of ideas that my kids would have thought up - when they were five. Games for cars to distract the driver, an autopilot (which isn’t) and so forth.
He’s managed to gather extraordinarily talented people around him, and those extraordinary people have made some amazing things (SpaceX, some aspects of Tesla cars). But all he’s brought to the party are a big mouth, narcissism and a bullying attitude.
At this time, Ukraine needs help. But Musk just wants to buddy up with his oligarch pal Putin.
He's simply lying
It is absolutely unclear how much Starlink has actually donated to Ukraine, but the numbers seem to go down every day. Out of the 20.000 Starlink devices that have reached Ukraine, much more than 10.000 seem to have been ordered regularly by people who paid the full price for the device and are paying the full monthly price. Around 5.000 devices seem to have been paid for by the Pentagon at full price.
My tracking table currently only has about 1.500 devices that may have been actually donated, but included only three months of free service, and also have been shipped by the US military at their expense.
So I don't see a single Starlink device in Ukraine that isn't currently already charged the regular monthly fee. Starlink hasn't provided any proof that they exist, but on the contrary has silently updated the numbers on their website and "donation" has turned into "public-private partnership".
Starlink must be in quite some financial trouble if they have to turn such a great publicity stunt into such a desaster just for a bit of money.
How many billions is that schmuck worth? And he won't try to support an oppressed people while he lives in his McPalaces? What a maroon.