Constellations: Does Amazon have a chance against SpaceX?

Amazon finally unveils its game. After years of uncertainty about Kuiper, its project for a constellation of 3,236 satellites dedicated to broadband, the American e-commerce and cloud giant launched the major maneuvers on Monday 1er november. He announced the launch of the first two satellites of the constellation in the fourth quarter of 2022, kicking off a project in which he plans to invest 10 billion dollars. The group plans to put half of the project’s satellites into orbit by July 2026, and the rest before July 2029. A brand new factory of 20,000m2 emerged from the ground in Redmond, near Seattle, to manufacture the satellites in series. “There are now more than 750 people working on the project, and we plan to add hundreds more next year,” the group said in its statement.

How will Amazon launch its satellites? The new New Glenn heavy launcher, developed by Blue Origin, the space group of Amazon founder Jeff Bezos, was the most logical choice. But Blue Origin has all the trouble in the world to complete the development of the rocket, whose first flight will not take place before the end of 2022, at best. Amazon therefore played it safe for the first shots. Last April, he ordered nine launches of Atlas V, a heavy launcher manufactured by ULA, a joint venture between Boeing and Lockheed Martin. As for the launch of the first two satellites, it will be entrusted to the Californian start-up ABL Space Systems. Based in El Segundo, the company develops the RS-1 micro-launcher. She is one of the most ambitious actors in the new space US, with $470 million already raised and a valuation of $2.4 billion.

The big question remains: Won’t Amazon come after the battle? The American giant has fallen far behind the two most advanced space internet projects, Starlink (SpaceX) and OneWeb. The first, developed by SpaceX, is undeniably the scarecrow of the sector. It has already placed 1,700 satellites in orbit, and launched its first commercial offers to more than 100,000 customers. These benefit from a $99 per month subscription, plus $500 for ground equipment. Starlink’s first two experimental satellites were launched in February 2018: Kuiper is therefore more than four years behind Elon Musk’s group, which can count on its reusable Falcon 9s to launch its satellites at an industrial pace.

4 or 5 viable constellations

OneWeb, which had come close to bankruptcy in 2020, also appears to be much more advanced than Amazon. Co-owned by the Indian Bharti, the French operator Eutelsat, the United Kingdom and the South Korean conglomerate Hanwha, the group has already placed 358 satellites in orbit, and plans a fully operational constellation in June 2022, i.e. before SpaceX. He has also signed several major contracts, notably with the American AT&T, the British BT and the Saudi government, which have given credibility to his status as a challenger to Elon Musk’s group.

Amazon, like the Canadian Telesat, will have to prove that it can find a place in this market. Despite its ignition delay, the group of Jeff Bezos has some solid arguments. On the commercial side, it can rely on the 200 million subscribers of its Prime offer, which could be Kuiper’s priority audience. The financial surface of Bezos, who invests a billion a year in Blue Origin, is another major asset. Satellites in low orbit (590 km for Kuiper) only remain in service for five years. It is therefore necessary to constantly launch replacements to keep an operational constellation, which requires monumental financial means. Bezos obviously has pockets deep enough to last.

Amazon therefore seems to have the means to be among the few winners of the great space internet war, even if the places look expensive. “There should only be 4 or 5 constellations in low orbit really viable”, estimated at the beginning of October the general manager of Eutelsat Rodolphe Belmer, shareholder of OneWeb. This club could, according to a specialist, welcome Starlink, Amazon Kuiper, OneWeb, a Chinese constellation, and possibly the Canadian Telesat if it finds the 5 billion dollars necessary for its take-off.

Starlink valued at 81 billion

However, Amazon will have to whip to catch up with SpaceX. In a study on SpaceX published on October 18, the bank Morgan Stanley anticipated exponential growth in Starlink’s turnover. It would reach 3.5 billion dollars in 2026, 10.9 billion in 2028, 22.8 billion in 2030, and more than 50 billion in 2040, with 300 million subscribers on that date. Morgan Stanley valued Starlink at nearly 81 billion dollars, against only 11.7 billion for traditional launch activities (Falcon 9, Falcon Heavy, Starship).

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