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Space

Tech Giants Bet Big on Satellite-Based Global Broadband Connectivity

Amazon and SpaceX face off in the race to build a private communications network in space

A photo of Amazon founder Jeff Bezos at a dinner in October 2010. (Image Credit: Steve Jurvetson/Flickr)
A photo of Amazon founder Jeff Bezos at a dinner in October 2010. (Image Credit: Steve Jurvetson/Flickr)

The great race in space is going small. With small satellites, specifically. And an emerging niche within the industry is satellite-based broadband. Several large American technology companies—including Amazon, Boeing, OneWeb, and SpaceX—are competing against each other to send small satellites into space and build a global broadband network for potential customers down on earth. They’ve all announced plans to invest money and manpower into projects of this nature in recent months.

Reuters reports that Amazon wants to launch over 3000 satellites into a low-earth orbit with an aim to provide low-latency, high-speed internet connectivity. Its rival SpaceX, according to Seeking Alpha, has obtained permission from U.S. federal authorities to build a constellation of more than 11,000 such satellites. Smaller competitors like One Web and Boeing want to put 650 and 1400 broadband satellites into space for a similar purpose respectively.

Companies in the United States are required to gain permission from Federal Communications Commission or FCC before sending payloads into orbit. Even the number of satellites each company hopes to send into space has to be cleared by FCC. However, after getting approval for the initial numbers outlined above, some companies appear hesitant to follow on to their original plans—indicating the uncertainty that looms over the industry’s future.

For example, Boeing—according to a report in Space News—has done little to build satellites since obtaining permission from regulatory authorities to send thousands into space. OneWeb—a space start-up based in the United States backed heavily by Japanese investors—promised to roll out services in Alaska as early as 2019, but now appears to have pushed back that target by more than a year.

The skepticism surrounding these investments in space technology has a history going as far back as the 1990s. In that decade, several startups aimed to build low-orbit satellites for improved internet connectivity but eventually failed. Among these failed startups included Teledesic, a company founded by Bill Gates. In 2015, Facebook decided against investing in a satellite that would provide internet to underserved regions in Africa, opting to lease services of another satellite, which was destroyed in a launch failure.

Regulatory and technological hurdles regarding small satellites are rapidly disappearing in the face of increased investment in the private space industry. The potential benefits of a space-based wireless broadband network across the globe include lower latencies, truly wireless services (some companies plan to beam signal straight to mobile phones), and lower pricing. The potential profits for parent companies are large.

However, since the margin for loss is also huge, big companies will most likely be the only winners of this new space race. Billionaires Jeff Bezos and Elon Musk, who own Amazon and SpaceX respectively, are two industry titans the markets will follow closely over the next few years as they look to commercialize the final frontier.

Amazon wants to send more than 3000 satellites into space for high-speed internet connections, a mission codenamed Project Kuiper by the company. The proposal to build, launch and operate the satellites will cost the company billions of dollars, according to CNBC. SpaceX plans to launch dozens of test satellites next month as part of the Starlink broadband network, a report reveals. Starlink network envisions the launch of a constellation of more than four thousand low-earth satellites in the first phase.

Both SpaceX and Amazon have an advantage over their business competitors, in that they also own private space firms that develop launch vehicles for taking satellites into space. This lowers the cost of sending a payload into orbit considerably, as compared to other companies. Also, the two tech giants are among the most valued companies in the world and have investors willing to back their risky undertakings.

Amazon founder Bezos plans to spend more than a billion dollars on Blue Origin every year, the company subsidiary which develops rockets. It has also signed a deal with Canadian firm Telesat earlier this year to launch a communication satellite constellation. In December, SpaceX said it would raise more than 700 million in investment as the needs of the Starlink program grew, a report suggested.

Leaps in satellite technology, mostly made by private space firms, have made it cheaper and quicker to send payloads into orbit compared to the previous decade. Starlink satellites proposed by SpaceX were likely to be the smallest ever built. And this is a key advantage for the company as weight is a factor that can lower launch costs. The number of satellites in orbit has effectively doubled since 2011, according to Lipper Alpha Insight. The Union of Concerned Scientists states that there were around 2000 operating satellites in orbit last year.

Since Amazon has not shared a timeline for the plan, industry analysts project that Project Kuiper will take well over a decade to take off. Lipper Alpha Insight claims that the company is at least a year behind its closest rival, SpaceX. Morgan Stanley assesses that if successful, the potential profits of the projects of Bezos and Musk will likely be in the billions of dollars. And so for many companies, satellite-based broadband is well worth the gamble.

Usman Kabir covers science, space, and technology for Globely News. As a kid, he would make models of the solar system and take part in water rocket competitions. His childhood obsession has led him to a degree in Space Science. Usman likes to spend his free time watching reruns of "Curb Your Enthusiasm" and "Seinfeld."

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