Amazon agrees $11.6bn deal to buy Globalstar

• Globalstar will add 24 satellites to Amazon Leo’s constellation
• Amazon plans to launch D2D services from 2028
• Space race is hotting up as Amazon looks to take on Starlink

Amazon is accelerating its satellite plans after reaching an agreement to acquire Globalstar for $11.57bn.

The deal, which was rumoured earlier this month, will add Globalstar’s two dozen satellites to the existing fleet of Amazon’s satellite broadband player, Amazon Leo (formerly known as Project Kuiper), boosting the tech giant’s ambition to compete with Elon Musk’s SpaceX, which had also previously been named as a potential suitor for Globalstar and which is currently lining up a monster IPO. 

The acquisition will also give Amazon Leo a private 5G networks proposition as Globalstar’s portfolio also includes XCOM RAN, which leverages 2.4GHz spectrum band to support private 5G network deployments through a combination of small cells, core, controller and its own-brand gateway terminal. 

Under the terms of the M&A agreement, Globalstar shareholders will receive either $90 in cash or 0.321 shares of Amazon common stock (capped at $90 in value) for each share they own, the companies said. Globalstar shareholders representing about 58% of the combined voting power have approved the transaction by written consent and the transaction is expected to close in 2027 once regulatory approval is attained, according to the companies. 

Perhaps unexpectedly, the news did not send Globalstar’s share price racing to the $90 mark: While news of the M&A deal did send its share price rising by almost 10% in late trading on Tuesday, Globalstar’s share price ended the day at $79.91. 

There’s little doubt that Amazon Leo, which currently has about 240 satellites in orbit and plans to launch commercial satellite broadband services later this year, will boost its scale and prospects if the acquisition is completed. 

However, it has a long way to catch up with SpaceX’s Starlink, which has around 10,000 low-earth orbit (LEO) satellites deployed and about 650 units designed specifically for direct-to-device (D2D) services that connect to regular smartphones. As a result of that scale, Starlink is already providing satellite broadband services to customers around the world and enabling its mobile operator partners, such as T-Mobile US and KDDI, to offer D2D services to their customers, but the Globalstar acquisition will enable Amazon’s satellite arm to add D2D services to its services portfolio.

“There are billions of customers out there living, travelling and operating in places beyond the reach of existing networks, and we started Amazon Leo to help bridge that divide,” said Panos Panay, senior vice president of devices and services at Amazon.

“By combining Globalstar’s proven expertise and strong foundation with Amazon’s customer-obsession and innovation, customers can expect faster, more reliable service in more places – keeping them connected to the people and things that matter most.”

Globalstar first launched in 1991 as a joint venture between Loral and Qualcomm before a major restructure in 2004. It operates a second-generation constellation that provides voice services, internet of things (IoT) connectivity and personal safety services. Perhaps more importantly, it also operates a ground station network spanning 24 global gateways and has licensed spectrum in more than 120 countries.

Amazon said it will leverage the existing footprint plus its own fleet to launch D2D satellite services beginning in 2028. In what looked like a competitive swipe at Starlink, Amazon Leo noted it is promising to “offer substantially higher spectrum use and efficiency than legacy direct-to-cell systems, which translates into faster speeds and better performance for customers”. But by 2028, Starlink will already have next-generation V2 D2D satellites in orbit, a timeline that could cast a shadow over Amazon Leo’s launch – see MWC26: Starlink preps new D2D constellation.

In the meantime, Amazon Leo has its work cut out to meet its near-term obligations. It has permission to launch up to 3,236 satellites, but delays have forced the company to ask the US regulator, the Federal Communications Commission (FCC), for more time to complete the launch of around 1,600 satellites by an agreed July 2026 deadline.

Slice of the Apple pie

Amazon noted it has struck an agreement with Apple, which owns a 20% stake in Globalstar, to provide the tech giant with satellite connectivity for current and future iPhone and Apple Watch features: Globalstar currently provides the satellite service (text emergency services, messaging, location sharing) that is available on the iPhone 14 and later versions of the popular smartphone, as well as Apple Watch Ultra 3. 

Apple’s stake in Globalstar had been seen as a potential stumbling block for Amazon’s takeover, but the new agreement will see Amazon continue to support iPhone and Apple Watch models that currently use Globalstar’s existing and planned satellite constellations, which are manufactured by MDA Space, as well as via Amazon’s expanded future satellite deployments.

Greg Joswiak, senior vice president of worldwide product marketing at Apple, said: “Apple and Amazon have a long and proven track record of working together through Amazon’s core infrastructure services, and we look forward to building on that collaboration with Amazon Leo. This ensures our users will continue to have access to the vital satellite features they have come to rely on, including Emergency SOS, Messages, Find My, and Roadside Assistance via satellite, so they can stay safe and connected while off the grid.”

Satellite sector consolidation

News of the Amazon/Globalstar deal follows a wave of recent consolidation and deals in the satellite sector, including Starlink’s acquisition of S-Band licences from EchoStar, and the merger between Omnispace and Lynk Global.

Tim Hatt, head of research and consulting at GSMA Intelligence, said the Amazon deal is a strong signal of the need for infrastructure and spectrum scale in the sector, which is growing rapidly due to mainstream demand for satellite services.

“In the near term, the value proposition is simple: Coverage where terrestrial networks can’t reach,” Hatt stated. “Amazon’s deeper move into LEO reinforces that satellites are now being treated as core connectivity infrastructure and the centre of gravity is clearly shifting toward players with the capital and regulatory muscle to scale.

“Amazon has a number of options for commercialising satellite services, which could include bundling direct-to-device with Prime, broadband, coverage partnerships with telcos, and connectivity support for its logistics operations. Whatever that pathway, the centre of gravity is clearly shifting toward larger constellation providers with infrastructure scale.”

– James Pearce, Editor, TelecomTV