After EspaceX with restricted use of its Starlink and Starshield satellite internet services in Ukraine causing fast drones to disconnect and fall, kyiv is looking for alternatives.
Ukraine’s Defense Ministry announced Thursday that it has signed a letter of intent to develop new defense and satellite communications capabilities in partnership with Finnish technology companies Nokia and ICEYE, which manufacture satellites.
“Modern warfare has proven that reliable communications are a matter of national security,” Ukrainian President Volodymyr Zelenskyy said in a statement. “We all need to rely on abilities that we can control.”
Zelenskyy also announced this week a partnership with Norway to jointly develop air defense and communications systems that could serve as an alternative to Starshield.
Chad Anderson, founder and CEO of venture capital firm Space Capital, said such an alternative could be “two to three years away” and that “getting to the scale of Starlink is a longer path.”
SpaceX has about 11,000 satellites in orbit, according to data tracked by astronomer Jonathan McDowell.
Anderson said Starshield could be an even more difficult service to replace. “The Pentagon’s own contract documents indicate that SpaceX is the only supplier capable of meeting some of its requirements through 2026. Capital is no longer the constraint. Launch is.”
Even Starlink’s competitors have relied on SpaceX launches to put their satellites into orbit.
On Friday, Ukrainian officials said the country still faces restrictions on Starlink, which cut off connectivity for drones or other aircraft traveling at speeds above 100 mph.
The Trump administration and SpaceX CEO Elon Musk have dodged responsibility for unannounced changes to Starlink service reported by Ukraine more than a week ago. President Donald Trump told reporters at the White House on Friday that he would call on Musk to lift the restrictions.
SpaceX executives did not respond to a request for comment.
US lawmakers from both parties are calling for a formal investigation into Musk and SpaceX over alleged unilateral changes the company made to its services in Ukraine.
Jay Shambaugh, a senior fellow at Brookings and professor of economics and international affairs at George Washington University, told CNBC in an email that Starlink’s sudden changes are “part of a pattern since Trump returned to power, with the United States acting as an unreliable ally.”
Shambaugh warned that “ultimately this could reduce US exports to the EU if those countries don’t want to depend on something the US can cut them off from.”
Starlink rivals are on the horizon, including from Amazon Leo, French Eutelsat and an upcoming service from Jeff Bezos’ Blue Origin called TeraWave, which has not yet deployed its first satellites.
Beyond Ukraine, several countries are studying the possibility of setting up sovereign satellite communications systems. The EU is building IRIS², a constellation of hundreds of satellites, but its first launches are not expected before 2029.
Since Russia’s invasion of Ukraine in February 2022, venture capitalists and private equity investors have invested about $8 billion in Starlink and Starshield alternatives, according to a study by Anderson, whose firm tracks industry deals. About $3.9 billion of that funding went to potential Starlink competitors, primarily Spacesail and China SatNet.
Virginia Burger, senior defense policy analyst at the Project on Government Oversight, told CNBC in an interview that the problem today is that there is no immediate replacement for Starlink, and that the fight is shifting more toward “unmanned systems, drone warfare and other systems that require high-speed Internet.”
— CNBC’s Annie Palmer contributed reporting.
WATCH: Trump reportedly called Musk and asked him to lift Starlink restrictions in Ukraine
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