Amazon announced on Tuesday that it would acquire Globalstar for $11.57 billion, a move aimed at bolstering its fledgling satellite internet business and challenging SpaceX's dominant Starlink service.
Key Takeaways
Amazon announced it will acquire Globalstar for $11.57 billion to bolster its satellite internet business and compete with SpaceX's Starlink service.
- Amazon acquires Globalstar for $11.57 billion, gaining access to its network of two dozen satellites
- Deal includes cash or stock options for Globalstar shareholders, expected to close next year subject to regulatory approvals
- Amazon aims to deploy 3,200 satellites by 2029, with half required by a July 2026 deadline
- Amazon's current network operates over 200 satellites and will launch services later this year
- Analysts note that rocket shortages and manufacturing disruptions hinder Amazon's ability to compete with SpaceX
The deal gives Amazon access to Globalstar’s network of two dozen satellites, which will support the tech giant’s ambitions to deploy about 3,200 satellites in Earth’s low orbit by 2029. Roughly half of these satellites are required to be in place by a July 2026 regulatory deadline.
Under the terms of the agreement, Globalstar shareholders can elect to receive either $90 in cash or 0.3210 shares of Amazon common stock for each share they own. The acquisition is expected to close next year, subject to regulatory approvals and specific satellite deployment milestones.
Globalstar, based in Covington, Louisiana, powers Apple’s “emergency SOS” feature with its current network of satellites. In a parallel move, Amazon and Apple have signed an agreement to continue powering the satellite-based safety features for iPhone and Apple Watch users. The acquisition is expected to close next year.
In contrast, Elon Musk's Starlink – the dominant satellite-based internet service provider – already serves more than nine million users globally with over 10,000 satellites in orbit. Amazon’s current network operates more than 200 satellites and is preparing to roll out its satellite internet services later this year.
Analysts note that rocket shortages and manufacturing disruptions hinder Amazon's ability to compete with SpaceX. As of now, Amazon has deployed just 243 of the 3,236 satellites it promised in 2019 to put into low-Earth orbit to beam internet to consumers, businesses, and governments. The shortage has compelled the tech giant to tap rival SpaceX's Falcon 9 rockets for launches, highlighting its dependence on third-party providers.
SpaceX, by contrast, has deployed Starlink at a rapid pace using its own rockets, building a commanding lead in scale and coverage with a network of 10,000 satellites. Both Amazon and SpaceX are battling for a lucrative market for internet from space, with potential customers ranging from airlines and cruise ships to remote businesses and the billions without reliable broadband.
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