SpaceX Raised Pentagon Starlink Prices During Iran Conflict

U.S. bombing campaign against Iran that began February 28. Senior SpaceX officials told Pentagon counterparts that the military had been paying roughly $5,000 per terminal under a land or mobility plan while the drones operated under conditions closer to the $25,000 aviation tier, according to two sources familiar with the matter and Pentagon documents reviewed by Reuters.

The Pentagon agreed to the higher rate, raising the cost per LUCAS drone from about $30,000 to nearly $60,000.

U.S. kamikaze drone comparable to Iran’s Shahed model that can loiter before diving onto a target. Starshield terminals on the drones connect to both commercial Starlink satellites and a separate secure Starshield constellation under a 2023 agreement.

Pentagon officials initially resisted the increase, noting the drones used the connection for only minutes or hours rather than sustained aviation use, one source said. SpaceX did not respond to a request for comment. The Pentagon declined to comment on the price change itself.

The Pentagon also held talks with SpaceX about a direct-to-cell Starlink service that could bypass Iranian jamming and allow users to connect without ground terminals. SpaceX proposed charging as much as $500 million to activate the capability and $100 million per month to operate it, according to one person familiar with the discussions and Pentagon documents.

Reuters could not determine whether an agreement was reached.

U.S. government, according to an SEC filing. The company operates roughly 10,000 satellites, more than 60 percent of all satellites in orbit. After the Reuters reporting, Elon Musk posted on X that the story was “false” and that civilian Starlink had been improperly used for military purposes.

” The Pentagon’s Commercial Satellite Communications Office is working to identify other commercial satellite providers, a department official said.