Amazon to spend $11bn on satellite firm in growing Starlink rivalry
Amazon wants to grow its satellite business so it can offer internet and mobile phone services from space. To do this, the company plans to spend $11.57 billion to buy a company called Globalstar. This is a very big deal, and it shows that Amazon is serious about competing in the space industry.
The deal was announced on a Tuesday. It will help Amazon launch thousands of satellites into low-Earth orbit. Low-Earth orbit is the area of space that is closest to our planet. Satellites in this area can send internet and phone signals quickly and with less delay. Amazon has been working on this plan for several years. The project is called Project Kuiper, also known as Amazon Leo.
Amazon says buying Globalstar is part of its long-term plan. The company wants to build a strong network of satellites in space. It also plans to launch a new and improved satellite system by the year 2028. This new system is expected to be faster and more powerful than what Amazon has now.
By doing this, Amazon will compete more directly with Starlink. Starlink is a satellite internet company started by Elon Musk in 2019. It has become very popular in a short time. Starlink already has a big lead over Amazon. Right now, Amazon has only about 200 satellites in space. That is not many compared to Starlink.
Starlink says it has more than 10,000 active satellites. These satellites provide internet and phone service to over 10 million customers around the world. This gives Starlink a strong advantage. It also means Amazon has a lot of work to do if it wants to catch up.
Starlink is part of a company called SpaceX. SpaceX is known for building rockets and sending them into space. Starlink is an important part of SpaceX’s business. It may bring in between $500 million and $1.2 billion just from user fees. This shows how valuable satellite internet services can be.
SpaceX is also planning something big. The company is getting ready to become a publicly listed company. This means people will be able to buy its shares on the stock market. Experts believe the company could be worth more than $1 trillion. That is a huge amount of money.
Even after buying Globalstar, Amazon still has a long way to go. Globalstar currently has about 50 satellites in space. When you add Amazon’s 200 satellites, the total is still much smaller than Starlink’s network. Amazon will need to build and launch many more satellites to reach its goal of thousands by 2028.
Amazon’s chief executive, Andy Jassy, shared more details in a letter to shareholders. He said that many companies are already interested in using Amazon’s satellite service. These companies include Delta Airlines, JetBlue, AT&T, Vodafone, DIRECTV Latin America, Australia’s National Broadband Network, and NASA. They plan to use Amazon’s satellites once more of them are in space.
This is a good sign for Amazon. It means there is strong demand for its service. If Amazon can build its satellite network quickly, it could attract many customers.
As part of the deal, Amazon will take control of all of Globalstar’s infrastructure. This includes offices and operations in several places around the world. These locations include Louisiana and Georgia in the United States, Dublin in Ireland, Rio de Janeiro in Brazil, Toulouse in France, and two sites in California. These facilities will help Amazon manage and run its satellite network.
Globalstar has been around for a long time. It started in 1991 as a satellite communications company. Over the years, it has built a strong reputation in the industry. One of its most famous partners is Apple.
Since 2022, Globalstar has helped Apple offer a special emergency feature. This feature lets iPhone and Apple Watch users send an SOS message even when they do not have regular phone service. The message is sent using satellites. This can be very helpful in emergencies, especially in remote areas.
In 2024, Apple bought a 20% share in Globalstar. This shows that Apple believes in the company’s technology. Amazon has said it will continue working with Apple. This means the SOS feature will keep working on Apple devices even after the deal is complete.
Globalstar is also a publicly listed company. Its market value has been around $10 billion this year. Amazon is offering $90 per share to buy the company. Investors can choose to receive cash or Amazon stock of the same value.
Amazon is not the only new player in this space race. Another company called Blue Origin is also entering the market. Blue Origin was started by Jeff Bezos, who also founded Amazon. The company is working on its own satellite project called TerraWave.
Blue Origin plans to launch at least 5,400 satellites by the end of 2027. These satellites will focus on providing internet services to large businesses. This adds even more competition to the satellite internet industry.
In simple terms, a space race is happening again, but this time it is about internet services. Companies are trying to build large networks of satellites to connect people all over the world. Amazon’s purchase of Globalstar is a big step in this race.
The next few years will be very important. Amazon must move fast to build more satellites and catch up with Starlink. At the same time, new companies like Blue Origin are joining the competition. This could lead to better and faster internet for people everywhere.
