Amazon Acquires Globalstar in $11.57 Billion Deal to Challenge SpaceX's Starlink Dominance

Amazon (AMZN) has announced it will acquire satellite communications firm Globalstar in an $11.57 billion deal, significantly bolstering its satellite business as it seeks to catch up with Elon Musk's Starlink. The acquisition adds Globalstar's two dozen satellites to Amazon's existing network of more than 200 as part of its Project Kuiper initiative.

The deal comes as technology companies pour billions into the lucrative market for satellite-based connectivity, though matching Starlink's extensive network remains a formidable challenge. According to the table below, SpaceX's Starlink currently has approximately 10 000 satellites in orbit, with a proposed expansion of up to 1 million satellites under an FCC filing. Amazon's Project Kuiper has authorisation for 3 236 satellites, with over 200 currently in orbit. OneWeb operates about 650 satellites, while Globalstar's existing constellation comprises 24 satellites, with near-term expansion planned to approximately 32.

Direct-to-Device Technology and Strategic Positioning

Globalstar's satellite network is designed for reliable, low-data connections directly to mobile devices, known as Direct-to-Device (D2D) technology. This eliminates the need for devices to connect to ground-based cellular towers, making the technology crucial for emergency services and connectivity in areas with limited cellular coverage. The deal will help Amazon deploy D2D services from 2028.

"Amazon has been falling behind Starlink on satellite broadband. Acquiring Globalstar allows them to catch up on their D2D spectrum position and leap ahead on D2D deployment," said Armand Musey, president and founder of Summit Ridge Group.

Starlink already serves more than 9 million users globally and is also developing D2D services through partnerships with telecom operators, including T-Mobile.

Apple Partnership to Continue

Globalstar currently powers satellite-based safety features such as Emergency SOS and Find My for Apple's iPhone and Apple Watch users. Amazon confirmed it has signed an agreement with Apple (AAPL) to continue providing those services. Apple invested approximately $1.5 billion in Globalstar in 2024 to fund the expansion of its iPhone communication services, a deal that also gave Apple a 20% equity stake in Globalstar.

Deal Terms and Market Reaction

Under the terms of the agreement, Globalstar shareholders may elect to receive either $90 in cash or 0.3210 shares of Amazon common stock for each Globalstar share they own, representing a premium of more than 31% to the 1 April closing price, the day before deal discussions emerged. The acquisition is expected to close next year, subject to regulatory approvals and achievement of specific deployment milestones by Globalstar.

Shares of Louisiana-based Globalstar rose more than 10%, while Amazon stock gained 3%. MDA Space, the primary contractor for Globalstar's next-generation constellation, also jumped 9%.

FCC Chair Brendan Carr confirmed in a CNBC interview that the deal will require FCC approval, adding that the agency was "very open-minded" to the acquisition.

Industry Context

Amazon's move follows closely on SpaceX's progress with its initial public offering (IPO) plan. Starlink represents approximately 50% to 80% of SpaceX's revenue, and the company has been deploying satellites at a rapid pace, launching dozens at a time to build the world's largest satellite constellation.

"There has been continued consolidation in the sector in order to compete with SpaceX in the satcom market, given SpaceX's scale and virtually unlimited launch capacity. I expect this trend to continue," said Austin Moeller, director of equity research at Canaccord Genuity.

Market Sentiment:

The sentiment is strategically constructive, reflecting Amazon's recognition that organic development alone cannot close the gap with Starlink's first-mover advantage. The Globalstar acquisition provides immediate access to D2D spectrum and technology, leapfrogging years of internal development. The preserved Apple partnership ensures revenue continuity and validates the asset's quality. At $11.57 billion, the price is substantial but justifiable given the strategic imperative — Amazon needs a credible satellite play to complement its cloud and consumer ecosystems. Starlink's 10 000-satellite network versus Globalstar's 24 highlights the scale disparity, but D2D represents a differentiated segment where Globalstar has established positioning. The FCC's "open-minded" stance is encouraging, though regulatory approval remains a milestone. For investors, this deal signals Amazon's willingness to spend heavily to compete in connectivity, and the consolidation trend in satellite communications is likely to continue as players seek scale to challenge SpaceX. The 31% premium reflects competitive tension and Globalstar's unique assets. Execution will be key: integrating Globalstar, deploying the Apple-backed 54-satellite network, and launching Project Kuiper's 3 200-plus constellation on regulatory timelines. Success would position Amazon as a legitimate number two in satellite broadband and D2D services, but Starlink's lead remains formidable.

Disclaimer:
This content has been generated using AI technology and is intended for informational purposes only. While efforts have been made to ensure accuracy and relevance, this text should not be considered professional advice or an official statement. Always verify information from authoritative sources before making any decisions. This is not financial advice.