Big Tech is going orbital.
Verizon and Amazon have announced a new collaborative effort to substantially expand the carrier's 5G and 4G LTE service networks in rural areas, using Jeff Bezos' answer to SpaceX's Starlink, Project Kuiper, according to a recent press release from the carrier.
But with CEO SpaceX Elon Musk's wealth continuing to reach unconscionable levels, Amazon and Jeff Bezos could have a serious fight on their hands, once they enter LEO.
Amazon's satellite constellation could help fix Verizon's 5G problem
Amazon's answer to Starlink is called Project Kuiper and, named after the ring of icy bodies beyond Neptune left over from the formation of the solar system, its goal is to loft a constellation of 3,236 satellites into low-Earth orbit (LEO). Once there, they will enhance internet access for underserved regions of the world. And the new Verizon-Amazon partnership will pool Verizon's wireless technology with Amazon's Kuiper satellites to provide improved broadband coverage and "new customer-focused connectivity solutions." Verizon is getting a lot from the deal, with expectations high for its 5G and 4G services to strengthen, without building conventional infrastructure like fiber cable networks. This might help it finally make good on its promise of 5G service, which it was first to introduce to the world, but has since fallen behind T-Mobile.
Part of Verizon's issue was its emphasis on mmWave, which, while incredibly fast, doesn't cut it on the question of range. T-Mobile nabbed mid-band spectrum, which has a greater range. But another problem with mmWave for Verizon is how costly it is to scale, since it needs more nodes to compensate for the reduced range. "Project Kuiper offers flexibility and unique capabilities for a LEO satellite system, and we're excited about the prospect of adding a complementary connectivity layer to our existing partnership with Amazon," said CEO and Chairman at Verizon Hans Vestberg, in the press release. "We know the future will be built on our leading 5G network, designed for mobility, fixed wireless access and real-time cloud compute. More importantly, we believe that the power of this technology must be accessible for all. Today's announcement will help us explore ways to bridge that divide and accelerate the benefits and innovation of wireless connectivity, helping benefit our customers on both a global and local scale."
Amazon plans to face off against Elon Musk's SpaceX
But all of this will remain hypothetical until Amazon launches thousands of satellites into orbit, of which not a single one has yet to launch, despite the FCC's permission for Amazon to loft its roughly 3,200 satellites into orbit (with a proviso that half need to be in orbit by 2026). Amazon has said its broadband access will be available after 578 satellites have reached orbit, with the remainder of the LEO constellation slated for orbit by 2029. Amazon has also said it aims to invest $10 billion in Project Kuiper, and already signed a cornerstone contract with United Launch Alliance, for nine LEO missions.
Notably, Amazon nabbed several members of Facebook's now-defunct satellite team, in the latest case of cross-pollination in Big Tech expansion, and Amazon will need all the help it can get to take on SpaceX, especially after its CEO Elon Musk made $36 billion in one day after Tesla's market cap soared past $1 trillion, putting it in the company of Alphabet, Microsoft, Apple, and, of course, Amazon.