Amazon’s Bold Satellite Gamble: Acquiring Globalstar for $11.57 Billion
In a striking move to penetrate the competitive orbital mobile connectivity sector, Amazon has announced its intention to acquire satellite company Globalstar for a staggering $11.57 billion in cash. This strategic acquisition aims to bolster Amazon’s nascent satellite division, known as Amazon Leo, which is gearing up to offer direct-to-device services as it prepares for launch later this year.
The deal, valued at $90 per share, will provide Amazon with Globalstar’s extensive satellite operations, vital infrastructure, and a suite of mobile satellite service spectrum licenses. This acquisition comes on the heels of Amazon CEO Andy Jassy’s recent disclosure regarding Amazon Leo’s expanding clientele, which includes major names such as Delta Airlines, AT&T, and even NASA. To highlight its ambitions, Amazon recently unveiled a cutting-edge satellite internet antenna designed for commercial aircraft, promising passengers high-speed internet during flights.
Amazon Leo has set its sights on a lofty goal: deploying over 3,200 satellites in low Earth orbit. Despite facing some setbacks, the company has managed to launch around 200 satellites thus far. Recently, Amazon sought an extension from the Federal Communications Commission (FCC) on a deadline requiring the launch of 1,600 satellites by this July.
In comparison, Elon Musk’s Starlink currently holds a significant advantage with over 10,000 operational satellites, providing internet access across 150 countries for both individual consumers and businesses, including sectors like maritime and aviation.
Globalstar, the company Amazon is acquiring, operates with a fleet of over 24 satellites in low Earth orbit, and has plans to expand its constellation with an additional 50 satellites, alongside a partnership with SpaceX for launching replacements. This acquisition also aligns with Amazon’s existing collaboration with Apple, as Globalstar currently powers essential satellite features for the iPhone and Apple Watch.
Looking ahead, Amazon Leo plans to roll out its direct-to-device satellite system by 2028, envisioning a vast network of advanced satellites that could connect millions of customers globally. With these developments, Amazon’s entrance into the satellite sector could revolutionize connectivity options for consumers and businesses alike, marking a significant escalation in the ongoing race for space-based internet supremacy.