Satellite Internet Race Intensifies! Amazon Eyes Globalstar Acquisition to Rival Musk's Starlink

Amazon is in advanced talks to acquire satellite communications company Globalstar in a move that would significantly boost its ambitions to build a space-based internet business to rival Elon Musk's Starlink, the Financial Times reported.

The news sent Globalstar's shares soaring 12.3% in premarket trading on April 2, extending a rally that has already more than doubled the company's market value over the past year. Amazon's shares, however, slipped nearly 2%.

Why Does Amazon Want It?

Amazon is currently building its own satellite internet network, called Leo, previously known as Project Kuiper, which involves a planned constellation of 3,200 satellites. So far, 180 of those satellites are in orbit. Acquiring Globalstar would give Amazon an immediate boost in infrastructure, customer base and operational experience, all things that take years to build from scratch.

Point to note: Globalstar operates a network of low-earth-orbit (LEO) satellites, enabling faster and more reliable communication than traditional satellites. The company offers voice calls, data services and asset-tracking solutions to businesses, governments and individual consumers.

The target Amazon is chasing is formidable. Starlink, operated by Musk's SpaceX, already has more than 9,500 satellites in orbit and serves over nine million customers globally, ranging from individual households to businesses and US national security agencies. Starlink accounts for 50-80% of SpaceX's total revenue, making it one of the most commercially successful satellite ventures ever built.

The Deal's Complications

According to the FT report, Amazon and Globalstar have been in lengthy negotiations but no deal has been finalised yet, and talks could still fall apart. One key complication is Apple's 20% stake in Globalstar, meaning Amazon will have to separately negotiate with Apple as part of any potential agreement.

Globalstar had reportedly been exploring a sale to multiple potential buyers since at least October last year, with SpaceX also said to have been among the parties that held discussions, according to a previous report by Bloomberg.

Amazon's reported move comes as SpaceX itself is preparing for what could be the largest stock market listing in history. SpaceX has reportedly filed papers through a confidential route for the IPO, potentially targeting a stock market debut by July.

The planned listing follows SpaceX's merger with Musk's artificial intelligence venture xAI. That deal valued SpaceX at $1 trillion and xAI at $250 billion. The combined entity is now being discussed at a potential IPO valuation of over $1.75 trillion, which would make it one of the most valuable publicly traded companies in the world.