back to article Musk says Starlink will keep providing free service to Ukraine

One problem dealing with a prolifically tweeting billionaire is that the subjects of those mind burps can have the rug pulled from beneath them. This weekend, Elon Musk, Earth's richest being, talked about the operations of SpaceX's Starlink, a broadband satellite constellation, in terms that could unsettle some. The hell …

  1. Anonymous Coward
    Anonymous Coward

    u-turn

    nearly as spectacular as the current double and triple u-turns in the UK's budget :)

    But what interests me re. Musk is whether he got a phone-call to make him see the light (aka 'the broader picture'), or whether he was persuaded during a... personal meeting ;)

    1. DS999 Silver badge

      Re: u-turn

      I doubt he listens to advice from anyone, he probably changes his mind based on how much weed he has smoked in the past 12 hours. Or he might actually be schizophrenic. He shows a lot of the signs.

      1. Anonymous Coward
        Anonymous Coward

        Re: u-turn

        well, there's certain advice that you can not refuse. Being a businessman (re. 'a broader picture')

  2. The Indomitable Gall

    Thunderf00t is a wazzock...

    Thunderf00t may be an irritating blowhard, but he's good with numbers.

    Here, he discusses Musk's figures:

    https://www.youtube.com/watch?v=3qGg6wiXoSc&t=620s

    Summary: Musk's alleged "costs" seem to be ticket price rather than cost price. Thunderf00t speculates that this is creative accounting aimed at turning it into a massive tax write-down that will be net profit for SpaceX. He also speculates that SpaceX may be in the financial trouble that Musk himself predicted not too long ago...

    1. iron Silver badge

      Re: Thunderf00t is a wazzock...

      It is worse than that, he's also charging the US gov double the cost to consumers.

      1. Jellied Eel Silver badge

        Re: Thunderf00t is a wazzock...

        It is worse than that, he's also charging the US gov double the cost to consumers.

        The CNN article he cited had some interesting numbers, like charging $4,500 a month for the service. Also the number of terminals actually supplied by Musk/SpacX vs supplied by the UK, other countries and NGOs.

        But I do wonder if a SpacX terminal would give me a more reliable news feed?

        https://www.bbc.co.uk/news/world/europe

        https://www.bloomberg.com/news/articles/2022-10-13/french-energy-union-cgt-plans-oct-18-strike-for-higher-wages

        One mentions the French national strike due tomorrow, one.. doesn't.

    2. Mishak Silver badge

      "ticket price rather than cost price"

      Are all the arms manufacturers supplying weapons to Ukraine at a loss? Didn't think so.

      I can understand why Musk might be p****d that Starlink is treated differently when he doesn't play the game of "supporting" the political classes?

  3. Paul Hovnanian Silver badge

    Universal Service Fund

    Musk's comment may indeed have been triggered by the refusal by our FCC to fund Starlink rural access. But what he needs to understand is that this fund was negotiated between the US government and the incumbent telecoms. For the benefit of the latter. It is not to be shared with newcomers who might seek to put up a few microwave towers. Or satellites.

    The FCC rejected Starkink's application, claiming that they failed to demonstrate the ability to provide the promised service. Well, Ukraine can serve as that demonstration. But it won't matter. Because the telecoms have repeatedly failed to demonstrate the same sorts of service delivery despite the reciept of piles of cash.

    1. Aitor 1

      Re: Universal Service Fund

      So, in short, corruption.

      I wonder if Starlink will get something or they are threatening him with prison.

      1. Paul Hovnanian Silver badge

        Re: Universal Service Fund

        "I wonder if Starlink will get something"

        Shirley, you jest. All that money was promised to the incumbents. And reallocating any will trigger a response akin to taking a cookie from a toddler.

        "or they are threatening him with prison."

        Not until they can seal a deal to line up someone else to launch NASA payloads.

  4. The Dogs Meevonks Silver badge

    Oh look, it's a Narcissist acting like a Narcissist

    Currently the worlds second biggest narcissist is having a tantrum because he got called out by the people for his whiny, pathetic, please worship me bullshit.

    A quick timeline of last week....

    1: Wanted to stop funding starlink for Ukraine

    2: Posted poll on twitter asking people to vote on 'peace' options that included ceding territory to Putin, did not include driving Nazi Russia out of Ukraine

    3: Got annoyed that people didn't vote the way he wanted them to and called him on his bullshit

    4: Tweeted that it's unfair that companies get billions in subsidies and tax breaks and that spacex has to fund starlink for Ukraine... whilst his companies like SpaceX and Tesla get billions in subsidies and tax breaks.

    5: Finally had enough of people calling him out and hurting his fragile ego

    6: Decides he is going to carry on funding starlink for Ukraine and desperately posts for attention

    7: Waits to see if people will start loving him again instead of despising him for the toxic, waste of air that he is

    Meanwhile... the BBC is about to start airing some kind of Muskrat propaganda program worshipping the ground he walks on... instead of doing an expose on him.

    1. Ken Hagan Gold badge

      Re: Oh look, it's a Narcissist acting like a Narcissist

      "the worlds second biggest narcissist"

      I guess it would be needlessly inflammatory for you to clarify, but with so many contenders to choose from I'm a little curious to know who you place below him.

      1. Anonymous Coward
        Anonymous Coward

        Re: Oh look, it's a Narcissist acting like a Narcissist

        I'd suspect the small-handed orange-faced soon-to-be-charged-with-treason-etc narcissist that isn't worth giving airtime to.

        1. Jellied Eel Silver badge

          Re: Oh look, it's a Narcissist acting like a Narcissist

          They're finally charging Pelosi and the Clintons?

          1. Def Silver badge

            Re: Oh look, it's a Narcissist acting like a Narcissist

            Have a dried frog pill. They're just there in your dressing gown pocket.

            1. Jellied Eel Silver badge

              Re: Oh look, it's a Narcissist acting like a Narcissist

              Have a dried frog pill. They're just there in your dressing gown pocket.

              Nah, I'd rather have some news about Igor Danchenko's trial. Verdict on that one real soon now. Then it'll be on to Durham's next prosecution. Eventually the media may get around to asking if Danchenko was Ukrainian, or Russian. Or even if Pelosi was in charge of the Captiol's security, or not. That investigation may have to wait until after November though. The economy is strong as hell, so I'm sure it'll be fine. Charles Dolan probably hopes so.

              Meanwhile, Orange man bad! Star man good! Unless he's bad. Get that twitter poll running, while you still can! As for Musk, the Bbc probably couldn't spare any reporters to cover that because they were busy producing a hagiography on Musk.

  5. steelpillow Silver badge
    Trollface

    "It is insanely difficult for a LEO communications constellation to avoid bankruptcy"

    I wonder why. Not because big subsidies are the only way to keep such an expensive commercial loser going, Shirley?

  6. Jan K. Bronze badge

    "...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.

    So... USAID has paid for terminal and some 8 months service fee for their 1500 stations. Excellent. Though I wonder why they accepted to pay over market price?

    Anyway...

    We order another 15000 terminals (or whatever the requested number was) and include let's say a year service for each plus for the ones delivered.

    Struggling with the math, but isn't it 15000x600 + (15000+1500)x110x12 = $30.780.000 ???

    That's peanuts! ...but where the heck does the $400.000.000 come in?

    Please enlighten me, or is that the price when we talk charity?

    1. Zolko Silver badge

      If I'm not mistaken StarLink needs ground-based terminals. Which might not having existed in Ukraine before, and Musk might have counted those also in his budget. Terminals that might have short life-expectations, and must be re-built regularly.

    2. Ciaran McHale

      I'm too lazy to do internet/twitter searches to back up my numbers, but my vague recollection is as follows. Please do internet searches to confirm/refute/clarify my claims since: (a) I think my numbers are only approximately right; and (b) I'm just a random guy on the internet so what I claim should not be taken as being reliable (not because I'm lying, but because I have seen only a subset of the information available).

      1. Starlink terminals costs a few thousand dollars to make, and are normally sold to customers for $500 or $600 plus a monthly subscription fee. The expectation is that, over the course of a few years, the profit made on the monthly subscription fee will pay for the loss on selling the hardware. There is precedent for this type of business model, e.g., "get a free/cheap smart phone when you sign up to our £40/month plan for a minimum of 24 months".

      2. The monthly subscription fee (based on my probably out of date recollection) is usually something like $120 for a stationary installation for a family (limited number of users); $150 for an family (limited number of users) who like to roam (e.g., fit the Starlink terminal to an RV/caravan, or transport it between main home and holiday home); a few thousand dollars/month for a commercial installation that might have hundreds/thousands of users (e.g., a cruise ship that uses Starlink to provide internet access to all its passengers).

      3. Recently, twitter comments revealed that, each month, about 500 of the 25,000 Starlink terminals currently in Ukraine are destroyed due to war-inflicted damage, and need to be replaced. Since those 500 terminals won't be gradually paying off the hardware-sold-at-a-loss via monthly subscriptions, the loss of those terminals is very expensive for the manufacturer. For example, if it cost $2000+ to make each of those terminals (which is my *hazy* recollection), then 500 of them costs $1 million. With this sort of expensive attrition rate, it seems reasonable for SpaceX to request that a donation to fund the cost of a Starlink terminal might be for a substantial part of the manufacturing cost rather than the sold-at-a-substantial-loss price normally charged to consumers.

      4. A recent comment on twitter indicates that individuals in Ukraine who buy a Starlink terminal (rather than getting one via a donation from a large organization) pay only $60/month subscription charge. I assume the majority of these individual purchases will be used by small teams of mobile troops, so $60 is a substantial discount on the $150 normally charged for a roaming family.

      5. A recent tweet from Elon indicates that at least some Starlink terminals in Ukraine are being hooked up to a network infrastructure that can supply internet to about 10,000 or 20,000 people. I *think* the tweet stated the network infrastructure might be mobile phone cell towers to supply connectivity at town scale, but my recollection of the details is hazy. (I'm *guessing* that ethernet-based LAN might be preferred for providing a military base-scale communication network but I'm not a military guy.) I'm *assuming* that this sort of use case is at the high end of what the several thousand dollars/month subscription fee is intended to cover.

      6. My *assumption* is that the Ukrainian military will use a subset of Starlink terminals for town-scale or military base-scale communication, and a subset for smaller scale mobile-army-troops activities. However, rather than configuring a specific subset of Starlink terminals for one use case and another subset of Starlink terminals for a different use case, it is logistically simpler to just configure all the Starlink terminals for the most general-purpose (and hence most expensive) monthly subscription service.

      7. According to recent Elon tweets, SpaceX engineers have been investing a lot of effort into hardening Starlink infrastructure to withstand hacking/jamming attacks from Russia. This represents not only the salary cost of those employees, but also an opportunity cost, since those employees could otherwise be working on profit-making projects for SpaceX. For example, if this anti-hacking/jamming work ends up delaying the maturing of Starship by a few months, then the opportunity cost is basically the profits that could have been made by launching Starship to deploy commercial satellites multiple times during a few months.

      8. There have been some apparently contradictory claims about who is bearing the cost of supplying Starlink to Ukraine. These boil down to claims like "It has cost SpaceX $XXX to provide Starlink to Ukraine" and somebody else saying, "Hang on a minute, [name of organization] has provided $YYY funding for supplying Starlink to Ukraine" and then some people claim "This means Elon is lying since it really costs SpaceX only $XXX - $YYY = $VeryLittle", while another interpretation could be that it costs $XXX + $YYY to supply Starlink to Ukraine. I have no idea which of these contradictory claims about cost are true.

      The take-away point is this. If you assume costs of $600 per Starlink terminal and $60/month subscription charge, then you get a relatively low cost of supplying Starlink to Ukraine. If you assume the higher manufacturing costs per Starlink terminal and the non-subsidised typical subscription-fees-depending-on-the-use-case costs plus the effort invested in preventing hacking/jamming attempts, then you get a much higher cost of supplying Starlink to Ukraine. And that just based on what I have read. It is almost certain that my knowledge of relevant information is incomplete, so treat the above with a grain of salt. At the moment, I think it is too early to confidently claim whether Elon is a good/bad guy in this current controversy.

      1. Jellied Eel Silver badge

        The take-away point is this. If you assume costs of $600 per Starlink terminal and $60/month subscription charge, then you get a relatively low cost of supplying Starlink to Ukraine. If you assume the higher manufacturing costs per Starlink terminal and the non-subsidised typical subscription-fees-depending-on-the-use-case costs plus the effort invested in preventing hacking/jamming attempts, then you get a much higher cost of supplying Starlink to Ukraine.

        That's not really how costs work. At least not in the important sense, like justifying any tax write-downs to the IRS. If it costs $2,000 to make a Starlink terminal and he flogs them for $600, the cost is still £2,000. There may be more tax implications if the terminals shipped to Ukraine were obsolete V1 units that had already been written off.

        If the cost of the tin is being spread across the monthly service charge, then SpacX is going to need to recover $116/month on a 12-month contract, just to recover the cost of that tin. If you're only charging $60/month.. there are problems. If your normal price is $110/month, there are still problems. Unless of course that $2,000 initial terminal cost is very wrong. Either way coverning those costs based on a low MRR gives some hints at the potential margin/profitability of the whole venture given revenues have to cover all SpacX/Starlink's operating costs. So lots of satellites, launches, R&D, marketing, staff, earth station faciltiies, and bandwidth.

        Bandwidth part is probably the smallest given cost of getting fibre to earth stations, then slapping some transit or peering on the end of it. Those are also normal costs of actually being an ISP, along with managing or mitigating stuff like DDoS attacks.

        The suggestion that Ukraine might be trying to connect 10k+ muni nets via single Starlink terminals is also.. interesting given the contention ratios that would result in. Cost of replacing terminals destroyed in attacks is also going to be small, ranging from zero (being hit my a missile is not covered by your warranty/SLA), to $2,000 plus shipping.

        Price is of course different. So there seems to be a few parties involved, so services bought by Ukrainians directly for maybe $60/month, supplied by the UK or USAID at maybe $110/month. Then what seems to be a relatively small number supplied by Musk himself. Pricing for those can be per normal economic rules, ie whatever the market will bear. Consumers aren't going to pay $5,000/month, unless maybe they're for oligarch's yachts. So Musk is free to pluck numbers out of the air and say 'this is costing $400m a year!', but 'customers' like the IRS or DoD won't care, they'll want to look at the costs.

        Investors may care a little more, but the SPACx turds haven't floated yet though, so while those are private, so are the ongoing losses, cash burn rates etc. But Musk had planned to take them public, and does need a few bucks to pay for some intemperate tweets. Future investors may look at the cost vs price vs subsidy demands, and wonder where the business is? Which is pretty normal for Musk's ventures. Economics really doesn't seem to be his strong point.

  7. Anonymous Coward
    Anonymous Coward

    Look at me, look at me!

    Publicity Boy strikes again!

    1. Jedit Silver badge
      Headmaster

      Re: Look at me, look at me!

      It's more bad publicity in this case. Musk was trying to get in on the war subsidies by threatening to cut Ukraine's service if he wasn't recompensed. Someone then pointed out to him in private that it maybe wasn't a good idea to hamper Ukraine's ability to defend itself from an ongoing invasion - particularly when he'd already suggested that the country cede territory to the invaders in exchange for peace.

      Now he's painting his U-turn as a grand act of altruism, when actually it's just that if he keeps siding with Putin he's going to be destroyed.

  8. ShortStuff

    You Gotta Play Ball

    Musk must play ball with the Dems and throw kickbacks their way in order to get some of those Billion$

  9. Ideasource

    Network Christmas

    I would cease to additional gifting and tell ukraine you're welcome for all the free gifts you'll already received.

    I would tell the world press, I wanted to to be an infinite provider for them but it didn't work out. For its humanitarian benefits, It was worth a try. I did for a while. I was glad to give them what I could while I while I did.

    They still had more than they would have had otherwise and hopefully appreciate the bonus help they have received.

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