Amazon files to launch 5,105 satellites for mobile phone service, intensifying competition with SpaceX

Amazon has filed an application with the U.S. Federal Communications Commission (FCC) for a license to operate a network of 5,105 satellites that would provide connectivity to mobile phones. The company plans to start launching the satellites in 2028. This move comes several months after Amazon acquired Globalstar's satellite operations, which provide emergency connectivity to Apple iPhones and Internet-of-Things devices.

The filing reveals Amazon's plans to use Globalstar's radio spectrum to expand these services and integrate them with Leo, Amazon's broadband internet satellite network. This sets up increased competition with SpaceX, which dominates both the satellite internet and satellite-to-mobile services market. SpaceX has stated in its IPO filings that it will spend $20 billion to acquire spectrum from EchoStar to build out its mobile constellation.

However, it remains unclear how valuable satellite-to-mobile connections will be. Most offer limited bandwidth, suitable only for text messages or emergency situations. The CEO of T-Mobile, which uses SpaceX satellites to offer satellite connectivity to customers, said this spring that customer interest has been minimal. "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," Srini Gopalan said at a conference in May. "We're seeing it largely focused on the national parks."

Amazon faces an additional challenge: it does not have its own fleet of rockets. The company had planned to rely on Jeff Bezos' space company, Blue Origin, to launch its satellites, but the New Glenn rocket has been delayed and is now grounded following an anomaly that destroyed its launch pad in May. Amazon had to request an extension to the deadline imposed by its FCC license to build out its network.

While Amazon still lags behind SpaceX, its massive capital reserves — $255 billion in current assets on the books as of the end of April — mean that it can keep investing in its network, while SpaceX's capital needs appear far more pressing.