The two richest people in the world and prominent leaders of publicly traded companies — Amazon Inc AMZN and Tesla Inc TSLA — are engaged in a public fight over the control of satellites.
What Happened: SpaceX is working to convince the FCC that its Starlink satellites be moved to lower altitudes.
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The move is opposed by Amazon and other companies. Amazon said the move by SpaceX is an “attempt to stifle competition.”
“We designed the Kuiper System to avoid interference with Starlink and now SpaceX wants to change the design of its system,” Amazon said earlier this week. The company said the move by SpaceX could create a dangerous environment for collisions and increase radio interference.
Amazon went on to question why the Starlink satellites need to be moved: “SpaceX has indicated that it is capable of operating its system without exceeding 580 km and has not demonstrated why such a condition should not be effective immediately.”
SpaceX and Tesla CEO Elon Musk fired back at Amazon: “It does not serve the public to hamstring Starlink today for an Amazon satellite system that is at best several years away from operation,” Musk tweeted Tuesday.
Why It’s Important: Both SpaceX and Amazon are among companies pushing for high-speed internet from space.
A big difference for investors here is SpaceX is currently privately held while Project Kuiper is part of an investment in Amazon. Project Kuiper is part of the Aerospace and Satellite Solutions division that is under the AWS division of Amazon.
Starlink has over 1,000 satellites in orbit and began beta testing in October. Starlink services cost $99 a month plus $199 in upfront costs for a user terminal and wifi router. Beta testing expanded to the United Kingdom and Canada earlier this month with plans for more international markets coming.
SpaceX is planning on spending $10 billion to complete its satellite launches. Estimates say SpaceX could bring in $30 billion annually from its Starlink business or 10x its rocket business.
Project Kuiper is planning to launch 3,236 satellites in low Earth orbit to compete with Starlink. The FCC authorized Project Kuiper in July. Amazon has committed to spending $10 billion to build out its satellite plans.
Morgan Stanley said the satellite business could be a $100 billion opportunity for Amazon.
The battle between Amazon and SpaceX has attracted the attention of others. Amazon’s Project Kuiper has landed critics like Iridium Communications IRDM, Intelsat, Telesat and Hughes Network owned by EchoStar Corp SATS.
Benzinga's Take: The impact of the battle and the FCC decision could have an impact on who wins the satellite race for connected internet from space. As a private company, SpaceX is harder for investors to profit from their satellite aspirations. If Project Kuiper can complete its ambitious goals, the Amazon-owned division could add value to the parent company.
(Photo: Heisenberg Media, via Wikimedia Commons)
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