Amazon.com Inc (NASDAQ:AMZN) has announced a definitive agreement to acquire Globalstar, a mobile satellite services operator, for $11.57 billion.

This strategic move positions Amazon to directly challenge Elon Musk's SpaceX/Starlink in the rapidly growing satellite internet market.

Through this acquisition, Amazon will gain control of GlobalStar's satellite operations, infrastructure, and assets, integrating them with its existing Amazon Leo project, a press release stated.

This merger is expected to accelerate Amazon's efforts to deliver satellite-based internet services, particularly in areas where traditional cellular networks are unavailable.

Separately, Amazon also signed an agreement with Apple to provide satellite connectivity for current and future iPhone and Apple Watch users. And Globalstar currently provides satellite-based safety features, including Emergency SOS and Find My for the iPhone and Apple Watch.

Competition From Musk

While Amazon currently operates a few hundred satellites, Musk’s SpaceX has a significant lead. Through its Starlink business, the company boasts approximately 11,800 deployed satellites and over 10 million active customers. 

Starlink's approach relies on subsidizing user terminals, resulting in higher subscriber acquisition costs. In contrast, Amazon plans to leverage its manufacturing expertise to produce more affordable consumer terminals and reduce costs for customers.

Whether Amazon can position itself as a formidable competitor to SpaceX in the satellite sector remains to be seen.

A key milestone for Amazon will be meeting the Federal Communications Commission's requirement to have 1,618 satellites operational by July.

The acquisition is understood to be closing next year, subject tot to regulatory approvals and specific deployment metrics by Globalstar.

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