Amazon to acquire Globalstar for $11.57 billion

On Tuesday, Amazon announced that it has agreed to acquire Globalstar, a satellite company, for $11.57 billion in cash. Under the terms of the $90-per-share deal, Amazon will secure all of Globalstar’s satellite operations, infrastructure, and spectrum licenses. The acquisition is intended to bolster Amazon Leo, Amazon’s satellite internet business unit, with direct-to-device services ahead of its launch. This business unit already has a customer roster that includes Delta Airlines, AT&T, Vodafone, Australia’s National Broadband Network, and NASA. Amazon CEO Andy Jassy recently highlighted these customers, and on Monday, the company showed off a new satellite internet antenna.

The acquisition is a strategic play to catch up in the orbital mobile connectivity market, where Amazon Leo currently lags behind Starlink, the satellite internet constellation owned by Elon Musk. Amazon Leo is slated to launch with more than 3,200 satellites in low-Earth orbit, but it has faced delays. The company has launched only about 200 satellites so far, while a deadline set by the Federal Communications Commission (the US telecommunications regulator) requires Amazon to have about 1,600 satellites in orbit by July this year.

To compare the scale of the two operations in the orbital mobile connectivity market:

• Starlink: Currently operates more than 10,000 satellites, offering internet services in about 150 countries.
• Amazon Leo: Has launched only about 200 satellites, with a regulatory requirement to reach about 1,600 by July this year.

Globalstar, which has SpaceX as a launch partner, currently operates more than 24 satellites in low-Earth orbit and has agreements in place to acquire more than 50 new satellites. The company also has an ongoing partnership with Apple, which serves as a partner for satellite connectivity services. Amazon plans to use these assets to support its own direct-to-device satellite system, which is slated to deploy from 2028 to serve customers around the world.

Why it matters

Amazon is acquiring Globalstar to bolster its satellite business, Amazon Leo, with direct-to-device services and spectrum licenses. This move helps Amazon compete in the orbital mobile connectivity market currently dominated by Starlink.