Amazon Signs Satellite Pact With Verizon in Challenge to Musk

(Bloomberg) -- Amazon.com Inc. struck a deal to use Verizon Communications Inc.’s network to link up its thousands-strong planned fleet of satellites, stepping up a rivalry with Elon Musk’s StarLink system. 

Amazon’s billionaire founder Jeff Bezos has committed $10 billion to satellite subsidiary Kuiper Systems LLC, which plans to launch 3,236 satellites into low-earth orbit to provide broadband internet access. 

Amazon will now explore ways this so-called “constellation” of spacecraft could link up to Verizon’s terrestrial telecommunications network and connect remote areas and businesses, the companies said in a statement Tuesday. 

The deal will escalate the new space race fueled by billionaire investment. Bezos, the world’s second-richest man, is clashing with the world’s richest, Elon Musk, whose Space Exploration Technologies Corp. has sent more than 1,500 low-earth orbit satellites into space, and also competes with Bezos’s Blue Origin on launch technology. 

Musk recently teased Bezos after his immense wealth surpassed that of the Amazon founder. He’s now worth more than a quarter of a trillion dollars, compared to Bezos’s $193 billion. 

Kuiper Systems in September filed a scathing comment with the Federal Communications Commission, accusing Musk and his companies of flouting regulations with a general attitude that “rules are for other people.”

The bid to provide low-earth orbit satellite broadband is also drawing in other investors, including more billionaires and governments. Ventures like OneWeb, backed by Indian telecommunications tycoon Sunil Mittal and the U.K. government, recently struck a deal with AT&T Inc. to hook up customers via existing land-based networks.

Amazon and Verizon will study technical and commercial models for new services, and will look at expanding Verizon’s network using Kuiper’s satellite broadband. Verizon and Amazon have already collaborated on other communications technology, such as edge computing.

A spokesman for Verizon said it’s a global partnership with Amazon and it’s open to exploring similar deals with other companies, but declined to comment on the finances of the deal.

©2021 Bloomberg L.P.