Amazon's $10 billion acquisition of Globalstar, "buying spectrum," faces off against Starlink

Author: Claude, Deep Tide TechFlow

Deep Tide Guide: On Tuesday, Amazon announced that it would acquire satellite operator Globalstar for $11.57 billion, gaining scarce mobile satellite spectrum in one fell swoop, approximately 24 in-orbit satellites, and a long-term service agreement with Apple. It plans to deploy a direct-to-device (D2D) satellite system in 2028, directly challenging Elon Musk’s Starlink network of thousands of satellites. After the deal was announced, Globalstar’s stock jumped by more than 9%, and Amazon’s rose by 3%.

Amazon has officially thrown a major bomb into the satellite internet market.

According to Reuters on April 14, Amazon announced on Tuesday that it would acquire satellite operator Globalstar for $11.57 billion to accelerate its pursuit of Musk’s Starlink. Globalstar shareholders can choose to exchange for $90 in cash per share or 0.3210 shares of Amazon common stock. According to Bloomberg data, this price represents a premium of nearly 117% over the stock price before Bloomberg first reported last October that Globalstar was exploring a sale.

The deal was not without signs. Less than two weeks earlier, the Financial Times reported that Amazon was in talks to acquire Globalstar, with an estimated deal size of about $9 billion at the time. The final price that ultimately landed was significantly higher than the rumor, showing that Amazon was determined to make it happen.

Buying spectrum, buying time, buying Apple’s partnership: one deal solves three problems

The core logic of this acquisition, in the words of Armand Musey, founder and president of Summit Ridge Group, is that Amazon has long lagged Starlink in satellite broadband, and acquiring Globalstar allows it to quickly catch up in D2D spectrum positioning and achieve a leap in D2D deployment.

Globalstar is a longtime operator in the global mobile satellite service (MSS) sector, holding globally authorized L-band spectrum licenses. This kind of spectrum is a scarce resource, and securing it through applications and auctions may take years. Through a single transaction, Amazon bypassed the lengthy regulatory approval process.

Even more critical is the Apple tie-up. In 2024, Apple invested about $1.5 billion in Globalstar, acquiring a 20% stake, to expand iPhone satellite emergency communication capabilities. As part of the acquisition agreement, Amazon Leo will provide satellite feature support for future iPhones and Apple Watch devices, including Emergency SOS, messaging, Find My location, and roadside assistance services.

Apple Senior Vice President Greg Joswiak confirmed the cooperation arrangement in a statement and said he expects to deepen collaboration with Amazon on the expanded Amazon Leo network.

In other words, by acquiring Globalstar, Amazon gains spectrum assets, on-orbit satellite infrastructure, and a long-term service tie-in with the world’s largest consumer electronics brand in one move.

243 satellites vs 10,000 satellites: the satellite-count gap is still a hard problem

Although the strategic logic is clear, the challenges facing Amazon at the execution level are just as enormous.

Amazon currently has deployed only 243 satellites, even though it promised in 2019 to send 3,236 satellites into low Earth orbit. By comparison, Starlink operates a network of about 9,500 satellites, serving more than 9 million users.

The approximately 24 satellites added by the Globalstar acquisition (currently being expanded to 54) offer limited help in narrowing this gap. The real bottleneck lies with launch rockets.

According to Reuters analysis, shortages of rockets, manufacturing disruptions, and launch delays have severely constrained Amazon’s deployment pace, even forcing it to use SpaceX’s Falcon 9 rockets for launches. Gregory Radisic, a senior lecturer at Bond University, bluntly said: “Unless Amazon can solve the problems of deployment speed and launch capability, the gap will remain structurally impossible to close.”

Earlier this year, Amazon applied to the FCC to extend the deployment deadline for about 1,600 satellites by two years (originally due in July this year), but the FCC has not made a ruling yet. This means Amazon has not even completed deployment of the constellation size it has already been approved for.

Amazon’s long-term solution may come from Blue Origin founded by Jeff Bezos and its New Glenn heavy-lift rocket currently under development, but the rocket has yet to prove whether its launch frequency can meet the needs of large-scale constellation deployment.

Direct-to-device satellites: competing from emergency communications to everyday services

The strategic significance of this acquisition is not limited to broadband internet.

Amazon plans to launch its own direct-to-device (D2D) satellite phone service in 2028, allowing phones to connect directly to satellites for voice, messaging, and data communications without relying on terrestrial base stations.

D2D is the next battleground in satellite internet. SpaceX has completed testing of Starlink Mobile’s messaging functions through its partnership with T-Mobile, giving it a first-mover advantage. Amazon, through its acquisition of Globalstar, has gained immediate capability, bypassing the long spectrum approval process.

In a statement, Panos Panay, Senior Vice President of Devices and Services at Amazon, said the company will work with mobile network operators and is committed to extending reliable, high-speed connectivity to every corner of the world.

However, Amazon has not disclosed its target throughput, latency benchmarks, or how its L-band architecture specifically compares in performance with SpaceX’s approach.

Market reaction and the backdrop of SpaceX’s IPO

After the deal was announced, Globalstar’s stock rose 9.6%, closing at about $79.68 (still leaving about 13% of upside arbitrage versus the $90 acquisition price, reflecting uncertainty around deal completion and time costs). Amazon’s stock rose 3%, and Globalstar’s next-generation satellite prime contractor MDA Space also jumped 9%.

The timing is worth noting. Amazon’s acquisition closely follows SpaceX’s progress on its IPO plans. Starlink is believed to contribute approximately 50% to 80% of SpaceX’s revenue, and the upcoming listing is expected to become one of the largest IPOs in history. By locking in Globalstar in this window, Amazon is making both a strategic move and sending a competitive signal to the capital markets.

The deal has already received written approval from Thermo Funding II, the major shareholder that holds more than 57% of Globalstar’s voting rights, and the transaction is expected to close in 2027.