Amazon is reportedly in advanced talks to acquire satellite company Globalstar for about $9 billion.
This potential deal is all about catching up in the satellite internet race. SpaceX's Starlink is the dominant player, and Amazon's own project, now called Amazon Leo (formerly Project Kuiper), is facing significant pressure. Amazon has even asked regulators for a two-year extension on its deadline to launch half of its satellite constellation, highlighting the schedule risks it faces.
Buying Globalstar is a strategic shortcut—a classic 'capital-for-time' move. First, Globalstar already has a proven low-Earth orbit (LEO) satellite network, the same one that powers the Emergency SOS feature on iPhones. Second, it owns valuable and hard-to-get licensed S-band spectrum, a key ingredient for satellite communications. Third, it has an existing ground infrastructure, saving Amazon years of work.
However, this isn't a simple takeover. Apple is deeply involved with Globalstar. In 2024, Apple invested heavily, securing a 20% equity stake and, more importantly, locking up 85% of Globalstar's network capacity for its services. This means Amazon can't just take over the network; it must negotiate with Apple to preserve the critical iPhone emergency services. The acquisition is effectively a three-party negotiation between Amazon, Globalstar, and Apple.
The backdrop to all this is the evolving regulatory landscape. The U.S. Federal Communications Commission (FCC) has already approved a framework for direct-to-device (D2D) services and given the green light to a Starlink and T-Mobile partnership. This sets a competitive benchmark that Amazon needs to meet quickly to stay relevant in connecting satellites directly to smartphones.
In essence, acquiring Globalstar would allow Amazon to de-risk its ambitious satellite plans, gain immediate access to critical assets, and establish a credible path into the D2D market while its own satellite launches ramp up.
- LEO (Low-Earth Orbit): A type of orbit relatively close to Earth (under 2,000 km), which allows for lower latency and faster communication speeds for satellite internet services.
- D2D (Direct-to-Device): Technology that enables satellites to communicate directly with standard, unmodified smartphones on the ground, without the need for special hardware.
- Spectrum: The radio frequencies used to transmit data wirelessly. It is a finite and highly regulated resource, often referred to as the 'lifeblood' of wireless communication.