Amazon files FCC application for 5,105-satellite mobile network, intensifying rivalry with SpaceX's Starlink

The application

Amazon has submitted a request to the US Federal Communications Commission for a license to operate a network of 5,105 satellites that would connect directly to mobile phones. The company plans to start deploying the constellation in 2028, according to the filing. The system would provide voice, messaging, data and emergency services to people living, travelling and working in areas not served by conventional cellular networks.

The service would use radio spectrum obtained through Amazon's acquisition of Globalstar, a deal valued at $11.6 billion that was agreed earlier this year. Globalstar currently supplies emergency connectivity for Apple iPhones and internet-of-things devices. Amazon disclosed an agreement with Apple to support compatible iPhone and Apple Watch models for satellite services.

Amazon looks forward to delivering on the promise of D2D connectivity, including to the millions of people living, travelling and working in places beyond the reach of existing networks today.

A crowded direct-to-device market

The filing marks Amazon's entry into the direct-to-device market, which has until now been led by SpaceX's Starlink service. Starlink operates more than 10,000 active satellites and has signed partnerships with carriers such as T-Mobile US and Virgin Media O2 in the UK to fill gaps in their terrestrial coverage. SpaceX plans to spend $20 billion buying spectrum from Echostar to expand its mobile constellation, one of the growth strategies outlined in its IPO filings.

Other competitors include AST SpaceMobile, which has partnered with Vodafone, and Lynk Global. Amazon named Vodafone, DirecTV and Australia's National Broadband Network among its own partners for the new network. The proposed constellation would use five orbital planes to cover different regions of the globe, with satellites processing signals in orbit rather than merely relaying them.

Tepid demand so far

Consumer appetite for satellite-to-mobile services remains uncertain. The technology currently offers limited bandwidth, suitable mainly for text messages or emergencies. T-Mobile CEO Srini Gopalan told a conference in May that usage was negligible on the carrier's network, which already offers satellite connectivity through SpaceX.

Just to give you an example, we look at our data in May, and satellite usage is 0.0002% of our total network usage. That's three zeros. We're seeing it largely focused on the national parks.

Amazon's launch problem and deep pockets

Amazon faces an additional obstacle: it does not have its own rockets. The company had planned to rely on Blue Origin's New Glenn rocket, but the vehicle has been delayed and is now grounded after an anomaly destroyed its launch pad in May. Amazon was granted an FCC extension in June to a deadline requiring the launch of roughly 1,600 satellites for its existing broadband constellation, Project Leo, by the end of July. More than 390 satellites are already in orbit for that service.

Still, Amazon holds $255 billion in current assets as of the end of April, giving it substantial capital reserves to sustain investment in the constellation even as SpaceX faces more immediate funding pressures. The company's satellite broadband network, Leo, requires a dish for connectivity and remains far smaller than Starlink's fleet.