Exclusive-UK deepens reliance on Musk's SpaceX, spending nearly $40 million on satellite services

By Cassell Bryan-Low

LONDON, Sept 10 (Reuters) - Britain has spent nearly $40 million on SpaceX satellite services, deepening its reliance on Elon Musk's company for military communications despite growing European concerns about dependence on U.S. security infrastructure.

The spending was disclosed to Reuters in response to a freedom of information request and makes Britain the first country outside the U.S. to publicly acknowledge adopting Starshield, SpaceX's service for military and intelligence missions. Starlink is marketed to consumer and commercial users.

Britain's defence ministry said it has about 1,000 Starshield terminals and 500 Starlink terminals. It has spent about £13 million ($17.6 million) on Starshield, including terminals and airtime, and £16.5 million on Starlink. 

The disclosure comes at a time when European governments are seeking to bolster their own defence capabilities amid concerns over Washington's long-term commitment to the continent's security.

Musk repeatedly publicly criticised Britain's government during the premiership of Keir Starmer, who was recently replaced by fellow Labour party politician Andy Burnham.

Britain's defence ministry began using Starlink in mid-2022 and more recently has been shifting operational military communications traffic to Starshield, Reuters reported in June, citing people familiar with the matter. 

Militaries have been adopting Starlink since Ukraine began using the network extensively following Russia's full-scale invasion in 2022, including for battlefield communications and drone operations.

SpaceX has increasingly drawn a distinction between Starlink and Starshield. Musk has said Starlink is intended for civilian use, while Starshield is marketed to government and national security customers. SpaceX did not respond to questions, including which countries have access to Starshield.

Britain's defence ministry said it adopted Starshield after SpaceX mandated that Starlink only be used for morale, welfare, recreation and training purposes. The ministry said Starshield offers "enhanced encryption, military-specific terms of service, the highest level of network prioritisation, flexible licensing arrangements, and expanded coverage."

For the UK, Starshield uses the same satellite constellation, ground stations and terrestrial infrastructure as Starlink but operates through dedicated terminals and separate ground-based network gateways, the ministry said.

According to the ministry's response to Reuters, Britain began using Starshield airtime with existing Starlink terminals in 2024. It purchased its first dedicated Starshield terminals last year.

Britain also has its own military satellite communications network, Skynet, and is a shareholder in France-based Eutelsat, which runs the only major operational low-Earth orbit (LEO) broadband satellite constellation besides Starlink.

MUSK WANTS MILITARIES TO USE STARSHIELD

Starshield can cost substantially more than Starlink, according to pricing information disclosed by the ministry.

It said two Starshield plans are available in Britain: £5,500 a month for five terabytes of data and an unlimited plan costing £25,000 a month. By comparison, UK Starlink business customers can pay £1,830 a month for two terabytes of global data, alongside a range of cheaper plans with lower data allowances or more localised coverage.

Starshield terminals cost between £4,000 and £7,000 each, according to a person familiar with the matter. That is at least double the advertised price of business-grade Starlink terminals.

Reuters reported earlier this year that SpaceX increased fivefold the price charged to the Pentagon for Starlink services used to guide kamikaze drones during operations against Iran, angering some U.S. officials. Musk said the increase reflected the use of Starlink rather than Starshield, which he said should have been used instead.    

At least some other U.S. partners are also evaluating the service. New Zealand is trialling Starshield "to investigate its usefulness" in supporting military operations, a spokesperson for the New Zealand Defence Force told Reuters.

Starshield is based on Starlink technology. In some cases, SpaceX develops dedicated satellite constellations for U.S. government customers. In its most recent quarterly results, the company said the U.S. government had awarded more than $6 billion in multi-year Starshield contracts, primarily through two major U.S. Space Force programmes for LEO constellations.

Since launching Starlink in 2020, SpaceX has built the world's largest low-Earth-orbit satellite constellation. The business has become the company's biggest source of revenue and helped underpin its recent stock market debut, the largest initial public offering on record.

($1 = 0.7387 pounds)

(Reporting by Cassell Bryan-Low in London. Additional reporting by Max Hunder in Kyiv. Editing by Joe Brock and Mark Potter)