Speaker 1: Bloomberg Audio studios, podcasts, radio news.
Speaker 2: Hovering hundreds of miles above Earth is the largest single
Speaker 2: constellation of satellites. It's called Starlink.
Speaker 1: Falcon Starlink LDS go for launch.
Speaker 3: And there is that call out that we are go
Speaker 3: for launch.
Speaker 2: Watch as Falcon nine takes our stack of Starlink satellites
Speaker 2: into orbit. Starlink is part of Elon Musk's company SpaceX.
Speaker 2: It's thousands of satellites provide Internet all over the world
Speaker 2: through portable kits about the size of a home computer monitor.
Speaker 2: The idea is to reach even the hardest to reach places,
Speaker 2: places where other providers can't operate or don't. On its website,
Speaker 2: Starlink proclaims that it's available almost everywhere on Earth, and
Speaker 2: that's a big selling point for the service. But there
Speaker 2: are some places starlink isn't supposed to be.
Speaker 1: If you look at Starlink's website, they have a very
Speaker 1: good map of global coverage. They dutifully have certain countries
Speaker 1: blacked out or they'll have dates when Starlink services will
Speaker 1: become available, and some of the countries where it's more controversial,
Speaker 1: they will have no date available.
Speaker 2: That's alan Crawford, a senior editor at Bloomberg. Some of
Speaker 2: those blacked out countries he's talking about represent places where
Speaker 2: starlink services don't have a licensing agreement, haven't been approved
Speaker 2: by their governments, or where the devices have been barred
Speaker 2: for sale because of US sanctions. But a Bloomberg investigation
Speaker 2: has found that those barriers haven't stopped Starlingk's kits from
Speaker 2: getting into the hands of folks on the ground through
Speaker 2: a burgeoning black market.
Speaker 1: What really struck me was the extent of this issue,
Speaker 1: that it's not just an isolated case here and there,
Speaker 1: it's pretty much everywhere.
Speaker 2: Today on the show, what starlink kits seeping into illegal
Speaker 2: markets could mean for the company and the geopolitical stakes
Speaker 2: of letting that market continue or trying to shut it down.
Speaker 2: Three two one Sarah technician I left at this is
Speaker 2: the big take from Bloomberg News. I'm Sarah Holder. Alan.
Speaker 2: Can you start by just telling us about starlink.
Speaker 1: Well, Starlink is a system of high speed internet. It's
Speaker 1: very dependable, and it's based on satellites. The company is
Speaker 1: launched over five thousand satellites and it's using these to
Speaker 1: provide high speed internet in parts of the world where
Speaker 1: connectivity is not very good.
Speaker 2: Essentially, SpaceX launched the first Starlink satellites in twenty nineteen.
Speaker 2: In just a few years, it's become the largest satellite
Speaker 2: network in orbital space. It's also become a major source
Speaker 2: of revenue for SpaceX, along with government contracts and contracts
Speaker 2: with other companies to launch their satellites.
Speaker 1: The issue here for Starlink is that a lot of
Speaker 1: countries where they don't have good connectivity are kind of
Speaker 1: keen to get access to this for obvious reasons, but
Speaker 1: at the same time, they're not willing to just freely
Speaker 1: give over control to the company, and this has led
Speaker 1: to an issue that it's come up in the reporting
Speaker 1: for the story that there are many countries around the
Speaker 1: world where there's no licensing agreement between the government and Starlink,
Speaker 1: and the trouble is that people are turning to the
Speaker 1: black market to obtain Starlink devices.
Speaker 2: Anyway, your reporting found that Starlink terminals have ended up
Speaker 2: in places that are under US sanctions where Starlink is
Speaker 2: barred from operating, or just where Starlink does not have
Speaker 2: a licensing Can you give us a brief overview of
Speaker 2: what your team found is happening.
Speaker 1: Yeah, I mean the starlink kits. These are the kind
Speaker 1: of dish and receiver. They're widely advertised over social media,
Speaker 1: usually like WhatsApp groups and Facebook groups. There's countries like
Speaker 1: Sudan in North Africa, which is subject to US sanctions.
Speaker 1: There's a brutal civil war underway there and there have
Speaker 1: been allegations of genocide. Millions of people have been displaced,
Speaker 1: and our reporting shows that the rebel forces which have
Speaker 1: been accused of committing these human rights abuses are using starlink.
Speaker 1: Because again, this is like a vast country with poor
Speaker 1: internet systems in parts, but the internet's been brought down
Speaker 1: and the two sides are, you know, accusing each other
Speaker 1: of having done that, and in the meantime they're using starlink.
Speaker 2: What can darlink itself do about these kits ending up
Speaker 2: in the wrong hands.
Speaker 1: Well, that is really the numb of the matter. We
Speaker 1: put a set of quite extensive questions to Sterlink and
Speaker 1: they have yet to respond. Nevertheless, people we spoke to
Speaker 1: who are experts in the industry, who work in the industry,
Speaker 1: they said that it is feasible to geolocate these systems
Speaker 1: as soon as they're activated, you can see where they
Speaker 1: are in theory, you flick the switch and you turn
Speaker 1: it off.
Speaker 2: Right, I mean, is that something they've done in the past.
Speaker 2: They have that capability, they have they used it.
Speaker 1: What we were told was that they have moved against
Speaker 1: illegal use in South Africa, and so the technicalities of
Speaker 1: how they're doing that are not clear, but they have
Speaker 1: attempted to clamp down on the illegal use there. But
Speaker 1: equally we were told that it hadn't been very successful,
Speaker 1: that they had only managed to shut down some ten
Speaker 1: percent of the terminalist we're in use.
Speaker 2: Sudan is just one of the conflict torn countries where
Speaker 2: starlink terminals are being used and where they're banned. It's
Speaker 2: not just that militias want communications devices. It's also that
Speaker 2: ordinary people need access to the Internet, and that dynamic
Speaker 2: is not so unique to Sudan. All over the world,
Speaker 2: in places under crisis where blackouts and connectivity issues are common,
Speaker 2: people are trying to get their hands on starlink kits.
Speaker 2: You mentioned Sudan, and you've got a lot of detail
Speaker 2: about how starlink is getting into Sudan, and then how
Speaker 2: it's being used there. Can you walk us through that trajectory.
Speaker 1: In terms of Sudan, there are intermediaries who are obviously
Speaker 1: looking to make money in selling this in the black market,
Speaker 1: and they're bringing it in from Gulf countries that are
Speaker 1: apparently bringing it through Dubai and there are roots that
Speaker 1: they go through Darfur and South Sudan and bring them
Speaker 1: into the country that way. You know, when you buy
Speaker 1: a Starlink system, you get the physical equipment and then
Speaker 1: like I'm mobile phone, you get a tariff a plan
Speaker 1: and you can pay extra for roaming, and they're using
Speaker 1: it in these territories where there's no agreement to do so.
Speaker 2: So they're buying a kit in a place where Starlink
Speaker 2: does have a licensing agreement, but they're buying this roaming
Speaker 2: plan so they can use it in places that are
Speaker 2: perhaps not under that agreement.
Speaker 1: Exactly. The reporter Sam and Marxy actually caught up with
Speaker 1: traders and spoke to them in person, and so in
Speaker 1: terms of social media, these are essentially like small traders
Speaker 1: that are online that are taking advantage of a loophole
Speaker 1: or black market to import these devices and sell them
Speaker 1: at a markup. In some cases we found they were
Speaker 1: offering advice on how to shelter these devices so that
Speaker 1: they're not detected by the authorities, not digitally but physically.
Speaker 1: You know, they were giving advicely, don't put it in
Speaker 1: obvious part of your roof, you know, keep it to
Speaker 1: one side. And at certain times.
Speaker 2: This raises questions about local regulators and their responsibility to
Speaker 2: catch that these kids have been smuggled in and are
Speaker 2: being used.
Speaker 1: Governments and countries like South Africa where there is no
Speaker 1: licensing agreement with Starlink, then they have issued the Telecoms
Speaker 1: Regulator has issued clear warnings against people using this because
Speaker 1: it's illegal.
Speaker 2: Let's talk about the implications of this, Especially in a
Speaker 2: conflict like the Russia Ukraine War. Starlink can have a
Speaker 2: massive impact on battlefield communications. What role has starlink played
Speaker 2: already in the Ukraine Russia War?
Speaker 1: At the onset of the war back in February twenty
Speaker 1: twenty two, Elon Musk offered the starlink system to the
Speaker 1: Ukrainian government military, which they were obviously more than happy
Speaker 1: to accept. There was subsequently a deal done between the
Speaker 1: Pentagon and Ukrainians, and in terms of that were never
Speaker 1: made public. But nevertheless, we've seen plentiful evidence that starlink
Speaker 1: terminals are used in Ukraine. But what is new is
Speaker 1: that as of February this year, the Ukrainians said that
Speaker 1: Russia is now starting to use it as well, which
Speaker 1: would be very much against US sanctions. And Musk said
Speaker 1: on X his social media platform that they were not
Speaker 1: knowingly selling any terminals to Russia. But nevertheless, there are
Speaker 1: posts on Twitter or video of Russian soldiers opening starlink its.
Speaker 1: It's impossible to verify these, but the point is that
Speaker 1: it's a widespread phenomenon.
Speaker 2: Finding the technology and shutting it down is one thing,
Speaker 2: but any attempt to systematically address the problem could mean
Speaker 2: dealing with the big man at the top. When we
Speaker 2: come back, how SpaceX's controversial CEO Elon Musk factors into
Speaker 2: any attempts to rein in Starlink's black market boom We're
Speaker 2: back Bloomber Senior editor Alan Crawford has been telling me
Speaker 2: about how starlink kits have been circulating in countries where
Speaker 2: the system doesn't have agreements in place, and efforts to
Speaker 2: rein that in haven't been wholly successful. But there's one
Speaker 2: person we haven't really talked about much. Yet who's a
Speaker 2: big factor Elon Musk himself. He's the CEO and founder
Speaker 2: of SpaceX, the private company behind the Starlink satellite system.
Speaker 2: Here's what Alan had to say about Musk.
Speaker 1: Musk is known to weigh in on not just the
Speaker 1: war in Ukraine caused by Russia's invasion, but on various
Speaker 1: different aspects of US foreign policy. And that's what gets
Speaker 1: to some of the concerns that we heard voiced. There's
Speaker 1: the perception of a potential conflict of inter interest because
Speaker 1: Elon Musk is a private sector he is a supplier
Speaker 1: of services to the US government, notablay NASA, and he's
Speaker 1: taking these satellite payloads for the US government into space.
Speaker 1: And so there are obvious national security implications if a
Speaker 1: company like Starlink where to lose control of a satellite
Speaker 1: based system, or where even just to exercise limited patrolling
Speaker 1: of its own system.
Speaker 2: To dig into these possible security risks and the broader
Speaker 2: question of Musk's role in all of this, I spoke
Speaker 2: with my colleague Dan Flatley, a national security reporter at
Speaker 2: Bloomberg who's covered the government contractor relationship between Musk and
Speaker 2: the US.
Speaker 3: Musk has a ton of contracts. I mean, there's there's
Speaker 3: an argument that could be made that Elon Musk would
Speaker 3: not be Elon Musk without the US government. I mean
Speaker 3: he is, you know, starting in the early two thousands
Speaker 3: with SpaceX, done lots of contracts with NASA, with other
Speaker 3: parts of the US government in terms of launching satellites
Speaker 3: and other types of things into space. He does business
Speaker 3: with the military. Starlink is being used in Ukraine, but
Speaker 3: he also has links to the Chinese government through Tesla,
Speaker 3: so he's sort of has his hands in a lot
Speaker 3: of different spaces.
Speaker 2: How could starlink terminals bypassing sanctions, for example, cause national
Speaker 2: security concerns for the US if they're so entangled with
Speaker 2: Elon Musk's companies.
Speaker 3: So, you know, starlink is both a tool of communication
Speaker 3: and could be viewed as something that's an asset in
Speaker 3: terms of national security by the US, but it could
Speaker 3: also be a detriment to US national security depending on
Speaker 3: how it's used. And when you have someone who's as
Speaker 3: unpredictable and mercurial as Elon Musk is, but is also
Speaker 3: so technically proficient and offers a service that nobody else
Speaker 3: offers you're sort of right on the bleeding edge of
Speaker 3: what could be used for good or what could be
Speaker 3: used for ill. And I think that what US national
Speaker 3: security officials that we talked to in Washington, d C.
Speaker 3: Feel like is that they don't have enough of a
Speaker 3: sense of where Elon Musk is on any given day
Speaker 3: on a lot of these issues. That he is both
Speaker 3: a trusted partner and somebody that US national security officials
Speaker 3: are somewhat wary at the same time. But there's no
Speaker 3: alternative really to him for a lot of things, especially
Speaker 3: against SpaceX and stuff like starlink. You know, there's not
Speaker 3: a lot of other comparable sort of providers out there.
Speaker 2: What could it mean for Musk and his companies if
Speaker 2: they aren't able to address this issue, If it does
Speaker 2: become more of a priority of the US government to
Speaker 2: stop this and Starlink is enable to stop it.
Speaker 3: That's a really good question. I think you have to
Speaker 3: start with the question of does the US government want
Speaker 3: to stop this? And it's not totally clear whether they do,
Speaker 3: because there are some instances where the US government actually
Speaker 3: wants to encourage the use of starlink in some countries,
Speaker 3: whether it's Ukraine or Iran potentially. You know, there is
Speaker 3: a school of thought that more communication in some of
Speaker 3: these countries is better because it sort of opens it
Speaker 3: up to US markets, and you know, sort of the
Speaker 3: US way of thinking about certain things. I think the
Speaker 3: question is, are these terminals being used for military operations,
Speaker 3: are they being used to coordinate attacks, are they being
Speaker 3: used in some way that would represent a significant threat
Speaker 3: to national security? And at that point, does the government
Speaker 3: have a vested interest in getting involved. You know, anytime
Speaker 3: you have a technology like starlink that is so far
Speaker 3: advanced compared to what else is available out there, you're
Speaker 3: going to have people trying to get their hands on it.
Speaker 3: And that's one of the things that in some cases
Speaker 3: the US government wants to prevent and in other cases
Speaker 3: wants to encourage. Take Venezuela for instance, where Starlink terminals
Speaker 3: are showing up. Venezuela is under heavy US sanctions, but
Speaker 3: not every individual in Venezuela is sanctioned. So you know,
Speaker 3: if somebody is using a starlink terminal to access the
Speaker 3: Internet and they're not under sanctions and they're not under
Speaker 3: export control restrictions, then that's really a question for that
Speaker 3: country's government. If they are unders export controls, then that
Speaker 3: is a question for the US government.
Speaker 2: Yeah, it's a really complicated web of responsibility, global interests,
Speaker 2: and ultimately it comes down to who has the control
Speaker 2: and who has the will to exert that control.
Speaker 3: It seems like yeah, absolutely, And again, this is not
Speaker 3: a traditional company, This is not a traditional individual that
Speaker 3: you're dealing with. I think, by any metric, Elon Musk
Speaker 3: is not your typical, you know, entrepreneur. He's very outspoken,
Speaker 3: he's very unpredictable, and at the end of the day,
Speaker 3: the government, the US government in this case, is relying
Speaker 3: on him for a lot of different things and is
Speaker 3: not able to exert as much control over his activities
Speaker 3: as it might in a more traditional relationship.
Speaker 2: This is the Big Take from Bloomberg News. I'm Sarah Holder.
Speaker 2: This episode was produced by Adrianna Tapia. It was edited
Speaker 2: by Aaron Edwards and Shelley Banjo. It was mixed by
Speaker 2: Veronica Rodriguez. It was fact checked by Naomi. Our senior
Speaker 2: producers are Naomi Shaven and Elizabeth Ponso. Nicole Bumsterbor is
Speaker 2: our executive producer. Sage Bauman is our head of Podcasts.
Speaker 2: Thanks for listening, Please follow and review The Big Take
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