The close relationship between President Javier Milei and tech billionaire Elon Musk continues to solidify following official confirmation that the Argentine government will award Starlink the contract to provide internet connectivity to 6,000 rural schools across the country for at least three years.
The agreement between the National Communications Agency (in Spanish, ENACOM) and Starlink, which includes a joint investment of approximately US$22 million, was announced in late July.
Starlink will provide 6,000 satellite connectivity kits, which include two years of priority service, at an estimated cost of US$10 million.
The government will contribute the remaining US$12 million to fund installation, technical support, network monitoring, and the third year of service.
Once the third year is over, the provinces and municipalities that have joined the initiative will be responsible for covering the cost of Starlink’s corporate service.
The agreement, however, quickly drew scrutiny.
Critics have pointed to the absence of a public bidding process and the lack of public information regarding Starlink’s proposal. Beyond stating that the education ministry will inform what schools will be included in the program, the government has offered no information.
The exclusion of other companies that could have participated in a potential bidding process is another point under the spotlight. This includes the state-owned company ARSAT, which has been defunded by the current government and possesses a satellite capable of providing the services that Milei requested from Elon Musk’s company.
Questions over costs
Since there was no government bidding process and no public offer from Starlink, the actual cost of the project is not known with certainty.
Telecommunications market analyst Enrique Carrier noted in a recent report that the costs for the first three years “are not so linear,” as there is a “discount” in the first two years that is recouped in the third.
According to his estimates, the cost during the first two years would be US$30 per month, rising in the third month to US$166.
This would mean that the average over the three years would amount to a monthly cost per school of US$74.
According to Carrier, this could serve as a “benchmark” for provinces and municipalities once the third year is over. However, there is no official confirmation that this will be the case.
The issue of the actual cost is no minor matter, given Milei’s close ties to Musk and the fact that internet service providers operating in Argentina told the Herald that the US$166 service cost is much higher than what is offered on the market.
A hand-picked company
The way the contract was awarded is a major point of contention.
Standard procedure when the Argentine government needs to hire a service from a private company is to conduct a public bidding process.
Interested companies submit their technical and financial proposals, which are public information. An evaluation committee analyzes each proposal, and the competent authority awards the project to the most suitable bid, based on a combination of price, quality, track record, and compliance.
Carrier acknowledged that it is understandable that the direct commission to Starlink might generate “controversy.” For that reason, he argued that it would have been more “thorough” to issue a call for bids.
For Martín Becerra, a Conicet researcher and communications expert, the fact that ENACOM awarded the contract to “a company the president never tires of praising” has not gone unnoticed either.
He also noted that the Argentine government was not the one who pitched the deal. On July 15, Starlink Argentina sent a letter of intent detailing the proposal. Just nine days later, the agreement was approved.
“For anyone familiar with the pace of the Argentine government, nine days is a nanosecond — it’s very unusual,” Becerra told the Herald, adding that there was neither a technical evaluation nor a consultation regarding which 6,000 schools would be included in the plan.
He also pointed out that state funding will come from the Universal Service Fund (FSU), a fund administered by ENACOM.
This fund is financed by 1% of the contributions made by all telecommunications companies, including Musk’s company, although in its case it has been operating for a relatively short time, since 2024.
“A significant portion of that funding has been provided, in some cases, by Starlink’s competitors. Now, they are upset because Starlink is accessing funding they contributed to — and doing so through a handpicked process,” he added.
Sector complaints
Telecommunications companies in Argentina also expressed their dissatisfaction, pointing out that the government will partially finance Starlink’s operations through the FSU fund while implementing policies that make it impossible for them to compete.
For Gonzalo Berra, director of the internet service provider Servicio Satelital S.A., the Milei administration “lacks a predictable policy regarding the satellite services sector in Argentina.”
He added that Argentine companies providing satellite internet service are being “crushed” by the opening of the market to foreign companies and the “lag” in the exchange rate.
“Our costs are in pesos, and our prices are in dollars,” Berra told the Herald.
This means that if the Argentine peso appreciates against other currencies, including the U.S. dollar, it becomes cheaper for Argentines to purchase goods and services from abroad. However, it also becomes more difficult for Argentine companies to export goods and services.
Despite this situation, Berra stated that Starlink’s prices starting in the third year “are higher than what any of us are charging,” arguing that the service could cost US$100.
“The sector is under a lot of pressure, and the signal the government is sending is that it’s stepping in to finance the very company that’s putting us out of business,” he added.
Pablo Mosiul, CEO of the satellite connectivity services company Orbith — one of Starlink’s main distributors in Argentina — struck a more conciliatory tone, telling the Herald that Musk’s company offers a “very high-quality” solution.
He noted that moving forward, there is “a good opportunity” to complement these initiatives “with the operational capabilities that already exist locally.”
Mosiul did not give a precise figure when asked how much it would cost to provide a service similar to Starlink’s but stated that Orbith is “very cost-efficient” and would be “very competitive” in terms of price.
Why was ARSAT left out?
A question that quickly arose after Starlink’s partnership with the Argentine government became public was why wasn’t the contract awarded to state-owned telecommunications company ARSAT, given that some schools are already connected to its service.
Carrier argued that several factors work against that possibility.
He mentioned that the technology of the ARSAT 1 and 2 satellites, which provide the company’s connectivity service, is “vastly outdated.”
While ARSAT speeds range between 1 and 10 Mbps, Starlink offers 80 Mbps, an important feature when there are “multiple concurrent users.”
Carrier also argued that Starlink kits are “significantly cheaper and easier to install.”
Both ARSAT 1 and 2 are also nearing the end of their service life, with estimated closures coming in 2030 and 2032, respectively. This could have been resolved with the launch of the ARSAT 3 satellite, which would be capable of providing broadband satellite internet.
Its development, however, has already faced a decade of delays.
Construction began in 2015 — the final year of former President Cristina Kirchner’s second term — but was paused in 2016 by the Macri administration.
The project was then resumed under then-President Alberto Fernández in 2020, who set a target launch date of 2023. However, only 50% of the construction was completed.
Deadlines have been postponed again under Milei, with the project scheduled to become operational in 2028.
For Becerra, while this delay cannot be attributed solely to Milei, his administration exacerbated it by defunding the scientific system — a hallmark of his austerity plan.
The expert also noted that the government froze international funds that many of these programs rely on. In this case, a US$243 million loan from the Development Bank of Latin America and the Caribbean, which was approved in 2021. Of that total, US$160 million has already been disbursed.
ARSAT sources confirmed to the Herald that the construction and financing of the third satellite were put on hold during the first two years of Milei’s administration.
They added that, although activities partially resumed in 2026, many problems persist. Among them, an US$80 million debt the government has still not cancelled and a 20% reduction of the company’s workforce.
The reason for the latter? ARSAT employees have lost 50% of their purchasing power since the change in government.
Facts Only
* The Argentine government awarded a contract to Starlink for internet connectivity to 6,000 rural schools for at least three years.
* The agreement involved a joint investment of approximately US$22 million between the National Communications Agency (ENACOM) and Starlink.
* Starlink will provide 6,000 satellite connectivity kits, including two years of priority service, estimated at US$10 million.
* The government will contribute the remaining US$12 million for installation, technical support, network monitoring, and the third year of service.
* Provinces and municipalities will cover Starlink’s corporate service costs after the third year.
* Critics pointed to the absence of a public bidding process for the contract.
* The government provided no information regarding which schools would be included in the program.
* ARSAT was excluded from the potential bidding process.
* Cost estimates suggest monthly costs during the first two years might average US$30, rising to US$166 in the third month.
* Telecommunications companies expressed dissatisfaction with the government’s policies concerning satellite services and competition.
* ARSAT’s satellite technology is noted as "vastly outdated" compared to Starlink’s speeds.
* The construction of the ARSAT 3 satellite faced delays, with scheduling postponed under the Milei administration.
Executive Summary
The Argentine government and Starlink entered an agreement in late July involving a joint investment of approximately US$22 million to provide internet connectivity to 6,000 rural schools for at least three years. Starlink will supply 6,000 satellite connectivity kits including two years of priority service at an estimated cost of US$10 million, with the government contributing the remaining US$12 million for installation, support, monitoring, and the third year of service. After the third year, provinces and municipalities will cover Starlink's corporate service costs.
Scrutiny arose due to the absence of a public bidding process and lack of public information regarding Starlink’s proposal, despite the government stating only that the education ministry would inform which schools were included. The exclusion of other potential bidders, including state-owned ARSAT, was also noted.
Cost estimations vary; one analyst suggests costs for the first two years would average US$30 per month, rising to US$166 in the third month, resulting in a three-year average monthly cost of US$74 per school. Concerns exist regarding the actual service cost, as some providers suggest the US$166 rate is higher than current market offerings.
Telecommunications companies expressed dissatisfaction, citing that the government is partially financing Starlink via the Universal Service Fund while simultaneously implementing policies that hinder their competition in the sector.
Full Take
The awarding structure reveals a tension between executive action and procedural fairness. The deviation from standard public bidding protocols suggests a deliberate prioritization, which invites scrutiny over due process and the selection criteria that favored a specific private entity. Furthermore, the exclusion of ARSAT, despite its existing infrastructure and potential for upgrading, points toward an outcome defined more by political alignment than purely technical or economic optimization.
The cost analysis introduces another layer of contention: the reported high service rates in the third year contrast sharply with market expectations, suggesting that the structure of the deal may be designed to secure a favorable arrangement for the parties involved rather than reflecting pure cost efficiency. The narrative concerning ARSAT’s stalled project reveals a systemic friction where governmental policy shifts—specifically austerity measures and funding freezes—directly impede long-term infrastructure development for state assets. This illustrates how macro-level political decisions translate into tangible delays and constraints for public goods.
The dynamic between the private provider, heavily associated with political figures, and state entities operating within a framework managed by regulatory bodies creates an environment where transparency is selectively applied. The subsequent reaction from incumbent service providers highlights a perceived asymmetry: a powerful private entity benefits from streamlined access while established competitors face policy hurdles. Questions remain about who bears the ultimate cost of these expedited deals and whether accountability mechanisms are robust enough to address the underlying structural imbalances created by such rapid, high-stakes agreements.
Bridge Questions: What is the mechanism by which ENACOM determined that a direct award to Starlink was the most suitable administrative path, and what specific criteria justified excluding ARSAT from consideration? How do the cost projections translate into an assessment of whether this arrangement represents a genuine public investment or a private concession masked as a public service delivery? What are the long-term implications for the competitiveness of state-owned infrastructure when regulatory frameworks favor concentrated private access?
Sentinel — Human
The text functions as detailed journalistic reporting, effectively weaving together a specific government contract with expert commentary on economic implications, procedural fairness, and historical context.