Amazon plans to acquire Globalstar for $11.57 billion (£8.5 billion) to expand its satellite business and provide internet and mobile phone services.

The agreement, which was made public on Tuesday, will enable Amazon to launch thousands of satellites into low-Earth orbit as part of its long-running Amazon Leo project.

According to Amazon, the acquisition of Globalstar aligns with its “long-term vision for space-based connectivity” and it plans to implement a “next-generation” satellite system in 2028.

Starlink Leads the Satellite Race

By doing this, Starlink—an increasingly well-known satellite-based internet and phone service provider founded by Elon Musk in 2019—will become more competitive with Amazon.

Moreover, compared to Amazon's Leo, which presently only has about 200 satellites in orbit, Starlink has a considerable advantage.

More than 10,000 satellites are currently in operation, providing internet and mobile phone coverage to over 10 million paying users, according to Musk's private corporation.

As a subsidiary of SpaceX, Starlink is probably a major source of income for the business, with individual user fees alone possibly generating between $500 million and $1.2 billion.

With an anticipated valuation of more than $1 trillion, SpaceX is getting ready to go public this year.

The Race to Scale LEO Networks by 2028

To reach its target of thousands of operational satellites in orbit by 2028, Amazon Leo will need to drastically increase production, even with Globalstar's present array of roughly 50 satellites.

In an annual letter to shareholders last week, Amazon CEO Andy Jassy stated that Delta Airlines, JetBlue, AT&T, Vodafone, DIRECTV Latin America, Australia's National Broadband Network, and NASA have already committed to using Leo satellites for their operations and offerings once more satellites come online.

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Globalstar Deal Builds Up Amazon's Position

Amazon is acquiring Globalstar's entire infrastructure, including businesses in Louisiana, Georgia, Dublin, Ireland, Rio de Janeiro, Brazil, Toulouse, France, and two locations in California.

In 1991, Globalstar emerged as a satellite communications company. Since 2022, it has provided users of iPhones and Apple Watches with the opportunity to utilise their devices in an emergency “SOS” mode via its satellites.

Apple is one of its noteworthy customers. In 2024, Apple acquired 20% of Globalstar.

Further, Amazon said on Tuesday that it had also reached an agreement with Apple to continue offering the “SOS” functionality on its mobile devices.

Globalstar, like Amazon, is a publicly listed company with a market valuation of around $10 billion. Amazon's share acquisition price is $90 in cash, matching the value of Amazon stock.

Blue Origin, the rocket business founded by Amazon founder and former CEO Jeff Bezos, is another recent participant in the satellite internet race. 

In essence, the corporation stated that its TerraWave satellite project aims to launch at least 5,400 satellites by the end of 2027, with a focus on providing internet connectivity to large organisations.

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