In hunt for Starlink alternative, Ukraine partners with Nokia and satellite maker ICEYE

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After SpaceX restricted use of its Starlink and Starshield satellite internet services in Ukraine, causing fast-moving drones to disconnect and drop out of the sky, Kyiv is looking for alternatives.
Ukraine's Ministry of Defense said on Thursday that it has signed a letter of intent to develop new defense and satellite communication capabilities in partnership with Finnish tech companies Nokia and ICEYE, which makes satellites.
"Modern warfare has proven that reliable communications are a matter of national security," Ukraine President Volodymyr Zelenskyy said in a statement. "We must all rely on capabilities that we can control."
Zelenskyy also announced a partnership with Norway this week 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 "matching Starlink's scale is a longer road."
SpaceX has around around 11,000 satellites in orbit, according to data tracked by astronomer Jonathan McDowell.
Anderson said Starshield may be an even tougher service to replace. "The Pentagon's own contracting documents say SpaceX is the only provider that can meet some of its needs through 2026. Capital isn't the constraint any more. Launch is."
Even Starlink competitors have relied on SpaceX launches to put their satellites in orbit.
As of Friday, Ukraine officials said the country is still experiencing restrictions on Starlink, which cut connectivity for drones or other aircraft traveling at speeds over 100 mph.
Both the Trump administration and SpaceX CEO Elon Musk have shirked responsibility for the unannounced Starlink service changes that Ukraine reported 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 didn't respond to a request for comment.
Lawmakers in the U.S. from both parties are calling for a formal probe of Musk and SpaceX regarding the 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 the sudden Starlink changes are "part of a pattern since Trump came back into office of the United States acting as an unreliable ally."
Shambaugh cautioned that, "over time, that can reduce U.S. exports to the EU if those countries don't want to be dependent on something where the U.S. can cut them off."
Rivals to Starlink are on the horizon, including Amazon's Leo, France's Eutelsat and a forthcoming service from Jeff Bezos' Blue Origin called TeraWave, which has yet to deploy its first satellites.
Beyond Ukraine, several countries are looking into sovereign satellite communications systems. The EU is building IRIS², a constellation of hundreds of satellites, but its first launches aren't expected until 2029.
Since Russia's invasion of Ukraine in February 2022, venture and private equity investors have poured about $8 billion into Starlink and Starshield alternatives, according to research by Anderson, whose firm tracks industry deals. About $3.9 billion of that funding has gone to potential Starlink competitors, mostly Spacesail and China SatNet.
Virginia Burger, senior defense policy analyst with the Project on Government Oversight, told CNBC in an interview that the problem today is there's no drop-in replacement for Starlink, and combat is moving more into "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