The company already runs a broadband satellite internet network called Leo, which competes with SpaceX's Starlink. This new network would be integrated with Leo.
Globalstar delivers emergency communication services for Apple iPhones as well as IoT gadgets. The acquisition gave Amazon access to Globalstar's radio spectrum, which the company plans to leverage to expand its mobile phone offerings and integrate them with Leo.
SpaceX leads the industry in broadband satellite and direct-to-phone capabilities. T-Mobile relies on SpaceX's satellites to provide its customers with satellite-based connections. However, adoption remains low.
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SpaceX revealed in its IPO filing an intention to acquire spectrum from EchoStar at a cost of $20 billion for its mobile satellite network. The value of satellite-to-mobile connections is not yet clear. The majority of these connections provide narrow bandwidth, adequate primarily for SMS or urgent scenarios.
Amazon faces an additional challenge: it does not have its own fleet of rockets. Amazon had intended to rely on Jeff Bezos' aerospace firm, Blue Origin, to launch its satellites; however, Blue Origin's New Glenn rocket encountered delays and became inoperable following a May 2026 anomaly that devastated its launch pad. Amazon was forced to seek additional time beyond the deadline set by its FCC license for constructing the network.
The satellite-to-phone market is still in its infancy, with technical hurdles such as signal latency and power constraints limiting practical use. Amazon's existing Leo network already serves fixed broadband terminals; the new constellation would extend connectivity directly to handsets without requiring specialized equipment. This mirrors SpaceX's Starlink Direct to Cell service, which T-Mobile is trialing.
Analysts point out that while current usage is minuscule, the potential to connect billions of unserved devices in remote areas could drive long-term demand. Amazon's deep pockets give it the ability to sustain investment as the technology matures.
Given the early stage of this market, both Amazon and SpaceX must overcome significant engineering obstacles. For instance, maintaining a stable signal from a low‑Earth‑orbit satellite to a standard smartphone requires precise beamforming and power management, which have not yet been perfected at scale. These challenges explain why current usage remains negligible, but they also represent opportunities for the first mover that solves them reliably.
As of April 2026, Amazon reported $255 billion in current assets. Although Amazon trails SpaceX in current market position, its substantial cash reserves allow continued investment in its own network, whereas SpaceX faces more urgent capital requirements.
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