As U.S. forces relied heavily on Elon Musk’s Starlink network to guide kamikaze drones against Iranian targets, SpaceX executives pushed the Pentagon to pay significantly higher fees for the service, according to sources and documents reviewed by Reuters.Within weeks of the U.S. launching its bombing campaign on February 28, SpaceX officials argued that the military was underpaying for advanced connectivity on LUCAS suicide drones, seeking to raise the monthly cost per terminal from around $5,000 to $25,000.The Pentagon ultimately agreed to the increase, nearly doubling the cost per drone unit from about $30,000, despite internal unease over the pricing.
Growing Reliance Gives SpaceX Leverage
The dispute highlights the Pentagon’s increasing dependence on Starlink, which has become a critical tool for battlefield communications, precision targeting, and drone operations in remote areas. SpaceX’s constellation of roughly 10,000 satellites now accounts for more than 60% of all active satellites in orbit.
Unlike traditional defense contractors, SpaceX maintains substantial commercial revenue alongside its government contracts, giving Musk significant leverage. The company generates about 20% of its total revenue from the U.S. government, according to SEC filings.
“SpaceX certainly has the U.S. government over a barrel,” said Clayton Swope, a senior fellow at the Center for Strategic and International Studies.
The tensions extend beyond drone operations. The Pentagon has also clashed with SpaceX over pricing for a proposed direct-to-cell Starlink service aimed at helping Iranian civilians bypass government-imposed internet blackouts. SpaceX reportedly proposed charging up to $500 million to launch the capability, plus $100 million per month to operate it.SpaceX did not respond to a request for comment. The Pentagon declined to comment on the pricing disputes or the direct-to-cell plan but said it is actively seeking alternative providers.
Starshieldvs. Commercial Service
The military uses a specialized version called Starshield, which connects to both commercial Starlink satellites and a separate, more secure constellation. SpaceX argued that the LUCAS drones were operating under conditions that aligned with its higher-priced aviation tier rather than standard land or mobility service.
Pentagon officials countered that the $25,000 monthly fee was intended for aircraft, not short-duration kamikaze drones that use the connection for only minutes or hours at a time.
Despite the disagreement, the Pentagon is now considering purchasing more than 3,500 additional Starshield terminals, including 100 at the higher aviation rate, according to documents reviewed by Reuters. The potential deal could generate hundreds of millions of dollars in annual revenue for SpaceX.
Source: India Latest News, Breaking News Today, Top News Headlines | Times Now
