Taking on SpaceX, Amazon to invest $10 billion in satellite broadband plan

Amazon.com Inc (AMZN.O) said on Thursday it will invest more than $10 billion to build a network of 3,236 satellites that will provide high-speed broadband internet services to people around the world who lack such access, reported Reuters.

The announcement follows the Federal Communications Commission’s approval of the plan, called “Project Kuiper”, for the constellation of low-Earth orbit (LEO) satellites that will compete with the Starlink network being built out by Elon Musk’s SpaceX. It also comes on the heels of Amazon posting its biggest profit in its 26-year history. [nL3N2F15PH]

“A project of this scale requires significant effort and resources, and, due to the nature of LEO constellations, it is not the kind of initiative that can start small. You have to commit,” the company said in a blog post.

The project will also benefit wireless carriers deploying 5G and other wireless services to new regions, Amazon said.

By comparison, SpaceX has launched over 500 satellites of the roughly 12,000 expected for its Starlink constellation in low Earth orbit and plans to offer broadband service in the United States and Canada by the year’s end. The FCC approved SpaceX’s request in 2018.

SpaceX President Gwynne Shotwell, who in February floated the idea of spinning Starlink off for an IPO in the coming years, has said the Starlink constellation will cost the company roughly $10 billion.

While extremely costly to deploy, satellite technology can provide high-speed internet for people who live in rural or hard-to-serve places where fiber optic cables and cell towers do not reach. The technology could also be a critical backstop when hurricanes or other natural disasters disrupt communication.

The FCC authorization, adopted with a 5-0 vote, requires Amazon to launch half of its satellites no later than mid-2026 and build out the rest of the constellation by mid-2029.

Amazon said it would begin to offer broadband service once 578 satellites are launched.

It had 110 open positions for its “Project Kuiper” posted on its website Thursday. The satellites will be designed and tested at a new research and development facility opening in Redmond, Washington.