Amazon’s $11.6B Globalstar Deal Ignites Musk Clash
Amazon.com Inc.’s $11.6 billion deal to acquire Globalstar Inc. intensifies the competition with Elon Musk’s Starlink in the satellite communications sector, a market anticipated to double to $200 billion in the near future. On Tuesday, Amazon revealed its intentions to acquire the satellite operator through a combination of stock and a price of up to $90 per share. The company also stated that in 2028, it will introduce a direct-to-device service, providing connectivity directly to individuals’ mobile devices as an alternative to conventional cell towers. Amazon will acquire radio frequency licenses through Globalstar, which are essential for the company’s progress in satellite-to-mobile services. The e-commerce giant has been striving for years to penetrate satellite services in order to secure new avenues of growth beyond its vast retail and cloud-computing enterprises. However, its initiatives have faced obstacles due to delays from rocket manufacturers and a sluggish commencement of its production activities. Meanwhile, Musk’s Starlink, a division of SpaceX, has rapidly advanced with a network of 10,000 satellites in orbit, serving 10 million people and establishing a reputation for dependable internet service in challenging locations. In a statement announcing the deal, Panos Panay remarked, “customers can expect faster, more reliable service in more places — keeping them connected to the people and things that matter most.” Amazon is providing Globalstar shareholders with a choice of either $90 in cash per share or 0.32 shares of Amazon stock, with the value capped at $90 per share, as stated in the announcement. That signifies an almost 117 per cent premium over Globalstar’s price from late October, prior to report indicating that the company was considering a potential sale.
Globalstar shareholders will have the opportunity to decide if they prefer to receive a combination of cash and Amazon stock. The cash amount will be prorated based on the number of shareholders who choose to receive payment in that manner, with the total cash limited to 40 percent of the shares, as stated in the announcement. The acquisition, Amazon’s second largest following its Whole Foods takeover, is anticipated to finalize in 2027. As previously reported that Amazon was in advanced discussions to acquire Globalstar. The satellite company’s shares surged by 9.6 per cent, closing at $79.91 in New York. Amazon shares experienced an increase of 3.8 percent, reaching a value of $249.02. AST SpaceMobile Inc., a significant player in the direct-to-device segment, experienced a decline of nearly 11 per cent, bringing its value down to $88.57. On Tuesday, Amazon announced that Apple Inc.’s emergency messaging service will move to Amazon Leo, the company’s newly renamed broadband satellite network. Securing Apple as a customer could represent a significant achievement for Leo, which has struggled to keep pace with SpaceX’s Starlink unit in forming partnerships with major players like airlines. Amazon Leo has concentrated on delivering broadband internet services through its satellite constellation, necessitating that customers connect to the system via a personal user antenna. In recent years, the emergence of the potentially lucrative direct-to-device market has presented an attractive opportunity for satellite operators. The technology involves utilizing satellites to deliver connectivity to standard smartphones on Earth.
SpaceX has taken steps to enhance its Starlink broadband system by introducing satellite-to-device capabilities, launching satellites specifically designed for mobile phone connectivity. In 2025, SpaceX entered into an agreement to acquire EchoStar’s satellite spectrum — radio frequencies licensed by the Federal Communications Commission for spacecraft communication — in a $17 billion deal aimed at enhancing its capabilities in this sector. Amazon Leo currently has approximately 200 satellites in orbit conducting limited commercial tests, with the company’s aim of ultimately operating over 7,700 satellites. Earlier this year, Amazon requested that the FCC either waive or extend the deadline for having 1,600 satellites in orbit by July. While Globalstar maintains a satellite system in orbit, the company currently has only a few dozen active satellites in operation. The true worth of the acquisition for Amazon is found in GlobalStar’s spectrum — the radio frequencies that the FCC has licensed for communication with its satellites, stated Caleb Henry. The spectrum, which differs from what Amazon currently employs for its broadband satellite system, will be essential for the company to advance its direct-to-device capabilities. “Amazon has now repeatedly claimed that their satellite system will offer better service than what’s out there now, and so they clearly believe that they are building up a capability that will challenge and beat Starlink,” Henry said. “They’re very bullish on that.” Amazon Chief Executive Officer Andy Jassy “would not be able to make a claim like that without first acquiring spectrum,” Henry added.
Up to this point, the primary contenders in the direct-to-device market have been SpaceX and AST, based in Midland, Texas. SpaceX has partnered with T-Mobile US Inc. to deliver connectivity through Starlink satellites to regions lacking conventional land-based cell service. AST has established partnerships with operators including AT&T Inc. and Verizon Communications Inc., yet it remains in the initial phase of deploying its satellite network. FCC Chair Brendan Carr expressed a willingness to consider the Amazon-Globalstar deal, stating in an interview on Tuesday that the acquisition might introduce a new competitor to an emerging market. Last month, Amazon’s satellite business entered into an agreement with Delta Air Lines Inc., wherein the airline committed to utilizing Leo for in-flight Wi-Fi service. Starlink boasts a wide array of partners, including United Airlines Holdings Inc., Southwest Airlines Co., British Airways Plc, Air France, and Emirates. Globalstar, led by chief executive officer Paul Jacobs, a former Qualcomm Inc. executive. The CEO currently supports satellite service on the iPhone 14 and later models, in addition to the Apple Watch Ultra 3. This functionality enables users to send messages, contact emergency services, request roadside assistance, and share their location. Globalstar faced financial challenges, but with Apple’s backing, it received a “new lease on life,” Henry stated. “Having the backing of Amazon turbocharges their ability to provide direct-to-cell service in a way that might have been too expensive otherwise.”
