The Federal Communications Commission (FCC) Chair Brendan Carr approved Amazon.com Inc.‘s (NASDAQ:AMZN) acquisition of Globalstar Inc. (NASDAQ:GSAT) on Tuesday, signalling the importance of competition in the space-based internet sector.
‘We’re Very Open-Minded,’ Says FCC Chair
In an interview with CNBC, Carr shared that the FCC wanted to foster growth in the sector. “We’re very open-minded to it,” Carr said, adding that the FCC would be reviewing the paperwork involved in the deal. Carr said that the deal was consistent with the “long-term vision” of having the U.S. lead in the satellite internet space.
When asked how the deal could affect the likes of AT&T Inc. (NYSE:T), Verizon Communications Inc. (NYSE:VZ), T-Mobile US Inc. (NASDAQ:TMUS) and more, Carr said that the technology, in its current iteration, was a “complement” to traditional network operators. “From my perspective, it’s all about the consumer and the consumer here is a big, big winner” due to the “competitive pressure” in the connectivity sector.
“We think that a healthy, three-player direct-to-cell market can be really good for the country and our leadership,” Carr said, outlining SpaceX, Amazon and AST SpaceMobile Inc.‘s (NASDAQ:ASTS) roles in the sector.
Space-Based Datacenters
Carr, during the interview, was also asked about SpaceX’s push for orbital datacenters. He highlighted the FCC’s “all gas, no brakes” approach to the space economy.
He shared that the agency was open to space-based AI compute and that the agency was reviewing Starlink’s 1 million-satellite application, but added that there were other companies submitting datacenter requests at the FCC.
Amazon’s Globalstar Deal
The Jeff Bezos-founded e-commerce giant announced it had reached an agreement to acquire Globalstar, which is a mobile satellite services operator, in a deal worth $11.57 billion. Following the deal, Globalstar’s satellite network would be integrated into Amazon’s Leo satellite constellation.
Amazon has also signed an agreement with Apple Inc. (NASDAQ:AAPL) to continue providing satellite connectivity for current and future iPhone and Apple Watch users, something which Globalstar did with the Emergency SOS features, as well as Find My on Apple devices.
Amazon Leo vs Starlink
Separately, Leo recently unveiled its Aviation Antenna, which is in direct competition with Starlink and is designed to deliver satellite internet speeds of up to 1 Gbps download and 400 Mbps upload to airline passengers and crew on flights. Delta Air Lines Inc (NYSE:DAL) also signed a deal with Amazon to bring its low-Earth orbit satellite Wi-Fi to over 500 aircraft in its fleet from 2028.
Meanwhile, Starlink has deals in place with Virgin Atlantic and United Airlines Holdings Inc. (NASDAQ:UAL), as well as a possible deal with American Airlines Group Inc. (NASDAQ:AAL) to provide its satellite internet service on board the operators’ aircraft.
According to Benzinga Edge Rankings, Amazon offers satisfactory Momentum and Value, while also providing a favorable price trend in the short, medium, and long term.
Price Action: AMZN surged 3.90% to $249.25 at during the after-hours trading session on Tuesday.
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