Amazon to spend $11bn on satellite firm in growing Starlink rivalry

Amazon is escalating its battle against Elon Musk’s Starlink by agreeing to acquire satellite communications firm Globalstar for $11.57 billion (£8.5bn), a massive bet on delivering space-based internet and mobile phone services worldwide. The blockbuster deal, announced Tuesday, will supercharge Amazon’s Project Kuiper—referred to in the company's filings as the Amazon Leo project—allowing the tech giant to populate low-Earth orbit with thousands of satellites. Amazon stated that the Globalstar takeover aligns with its "long-term vision for space-based connectivity" and announced plans to deploy a "next generation" satellite system by 2028. The acquisition sets the stage for a fierce showdown with Starlink, the satellite internet service launched by Musk in 2019. Starlink currently holds a massive advantage, with more than 10,000 active satellites already providing service to over 10 million paying customers. By comparison, Amazon’s current constellation consists of only around 200 satellites. The SpaceX subsidiary is estimated to generate between $500 million and $1.2 billion in individual user fees, bolstering SpaceX's anticipated debut as a publicly traded company this year with a valuation expected to top $1 trillion. While Amazon will absorb Globalstar’s existing constellation of roughly 50 satellites, its primary prize is the company's extensive global infrastructure, which spans operations in Louisiana, Georgia, Dublin, Rio de Janeiro, Toulouse, and two locations in California. Globalstar, which has been operating since 1991, is also a critical partner for Apple. Since 2022, it has powered the "SOS" emergency mode for iPhones and Apple Watches. Apple took a 20% stake in Globalstar last year, and Amazon confirmed it has secured an agreement with Apple to continue providing the "SOS" functionality on its mobile devices. Amazon’s chief executive Andy Jassy highlighted the commercial appeal of the satellite network in a recent letter to shareholders, noting that Project Leo already boasts commitments from major clients including Delta Airlines, JetBlue, AT&T, Vodafone, DIRECTV Latin America, Australia's National Broadband Network, and NASA. Meanwhile, the satellite internet race is getting even more crowded. Blue Origin, the rocket company founded by Amazon's former CEO Jeff Bezos, recently unveiled its TerraWave project, aiming to launch at least 5,400 satellites by late 2027 to serve large businesses. Globalstar, which has hovered around a $10 billion market valuation this year, is being purchased for $90 per share in cash or the equivalent value in Amazon stock.