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Through use of re-usable rockets and expanding satellite arrays, global connectivity is on the rise. We have looked at this before, highlighting how it also presents a lucrative opportunity for forward thinking investors, with satellite broadband forecasted to become an $84B market within a decade. Recognizing this, Amazon – one of the worlds most identifiable companies – set out in 2019 to make its own mark on the sector with Project Kuiper.
4 years later, and Amazon has unveiled an early look at what Project Kuiper's $10B budget was able to achieve, announcing a trio satellite receivers geared towards customers on the move, along with both residential and enterprise/government scale applications.
Manufacturers and Innovators
Despite the potential behind satellite broadband, there are only a select few companies with the financial and technological wherewithal to capitalize on it. The following are a couple publicly traded examples of those that fit the bill, and are working hard to support our growing needs for connectivity.
For years now, the world has been using a growing satellite array which provides global voice and data services. In 2019, Iridium underwent the process of decommissioning its original fleet of communication satellites by lowering their orbit, and allowing for them to burn up in the atmosphere. Upon doing so, its next generation fleet was deployed, which is currently comprised of 75 deployed (66 of which are in use), and an additional 6 which are grounded as spares.
Notably, various firms including Barclays Capital, Morgan Stanley, and more, have each listed IRDM stock as a ‘Strong Buy‘ at time of writing. Over the past 12 months, IRDM shares have risen by ~51.39%, with the company boasting year over year increases in revenue in its latest 5-year trend.
Iridium Communications (IRDM) was founded in 2001, and operates out of the State of Virginia, United States.
Over the past decade, Amazon has become one of the worlds most recognizable brands. While the company is most well-known for its online merchant platform, its reach extends in to a plethora of industries – including telecommunications with endeavours like Project Kuiper.
Notably, nearly every major financial firm has listed AMZN stock as a ‘Strong Buy' at time of writing. Over the last fiscal year, Amazon boasted a revenue of $513.98B, and while the company was forced to lay off nearly 20,000 employees in early 2023, its stock remains up over 13% YTD.
A Cost-Effective Trio
As it stands, SpaceX and its Starlink service is head and shoulders above its competitors with the services it has on offer. It boasts the most expansive array, which provides impressive speeds at a reasonable cost when compared to current alternatives.
In the coming years Starlink will have its work cut out for it though, as Project Kuiper looks geared to be serious competition based on its now unveiled satellite receivers. Promisingly, Amazon has already indicated that it has achieved manufacturing costs of less than $500 for its standard model – already besting what SpaceX has reported for its own devices.
The first model is arguably the most intriguing for the everyday user. Boasting speeds of 100Mbps, this device weighs 1lb, and it built with portability in mind. It is a mere 7×7″, and will be the most cost-effective of all models.
Set to be the most commonly purchased option, the standard satellite receiver will boast speeds of 400Mbps, is under 5lb, and built with the residential application in mind. Slightly larger than its more portable variant, this model is 11×11″.
Project Kuiper is set to service more than the average user and those on the move. With that in mind, it has built its premium offering for enterprise and government use-cases. This model boasts speeds up to 1Gbps, and comes in at 19×30″.
Building the Array
Low-cost receivers are only one piece of the puzzle. A expansive accompanying array is also needed to truly facilitate global connectivity. As of 2020, Project Kuiper was given a regulatory ‘thumbs-up' to build just that.
Project Kuiper indicates that once complete, its scheduled array will be comprised of 3,236 satellites, all residing in low Earth orbit (LEO). Of those set to launch, at least 1,618 will be operational by 2026. Each of these will work alongside a dozen ground-bound sites to provide fast and reliable services to regions of the globe previously isolated from such technologies.
As a LEO array, the satellites of which it is comprised will reside between 367 and 392 miles above Earth. These satellites are set to be deployed through use of ‘heavy-lift' rockets on offer via partnerships already established with companies like Blue Origin, Arianespace, and more.
Competition is always a good thing. It fosters innovation and continued forward momentum. Starlink will always be the company that made such services possible, striving to make the world a smaller place. However, that is not enough to remain atop the pack. If Amazon and Project Kuiper can pull off what it intends to, Starlink, Iridium, and others offering satellite broadband services will not be able to rest on their laurels, but continue innovating if they intend to remain competitive.