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SpaceX has proposed charging the Pentagon $500 million upfront, plus $100 million per month, to launch and operate a direct-to-cell Starlink service for Iranian civilians. The Department of Defense, apparently, thinks that price tag needs some workshopping.
The pricing fight, explained
Direct-to-cell is Starlink’s technology that lets satellites communicate with ordinary smartphones on the ground, no special terminal required. The idea here is to provide internet access to Iranian civilians during government-imposed communication blackouts.
The $500 million upfront cost would cover the initial deployment and configuration of the service. The $100 million monthly recurring fee would cover ongoing operations. For context, that monthly fee alone would add up to $1.2 billion per year.
A pattern of escalating costs
This isn’t the first time the Pentagon has found itself on the uncomfortable end of a SpaceX invoice. The company recently raised Starlink terminal fees for military operations from roughly $5,000 to $25,000 per month, a fivefold increase.
Those terminals support LUCAS suicide drones, which have become a key component of the US bombing campaign against Iran that commenced around February 28, 2026. The Pentagon initially resisted the fee hike but ultimately accepted the new terms.
Pentagon documents also suggest plans for over 3,500 additional Starshield subscriptions, the military-specific variant of Starlink, potentially worth hundreds of millions annually.
Why SpaceX can name its price
Starlink generated $11.4 billion in revenue in 2025. Government contracts account for roughly 20% of that total, meaning commercial customers provide the vast majority of SpaceX’s income. SpaceX could walk away from military contracts and still run a wildly profitable satellite business.
The company’s constellation of approximately 10,000 satellites now constitutes over 60% of all satellites in orbit. No competitor, government or private, comes close to matching that infrastructure.
SpaceX is also preparing for a major IPO scheduled for June 2026. A public offering would give the company access to even more capital and, potentially, even less reason to offer the Pentagon a discount.
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