Amazon announced Tuesday it will acquire satellite communications company Globalstar in a deal valued at roughly $11.6 billion, vaulting the e-commerce giant into direct competition with Elon Musk's Starlink in the race to beam internet and phone service from low-Earth orbit.

The merger, expected to close in 2027, hands Amazon a global satellite infrastructure and mobile spectrum licenses while positioning its Amazon Leo network as a credible second entrant in the direct-to-device market that Starlink now dominates with more than 10,000 active satellites.

Apple deal

Alongside the acquisition, Amazon signed a separate agreement with Apple to provide satellite connectivity for iPhones and Apple Watches. Panos Panay, Amazon's senior vice president of devices and services, said the arrangement will make Amazon the "primary satellite service provider for iPhone and Apple Watch."

Globalstar has powered Apple's emergency SOS satellite features since 2022 on iPhone 14 and later models and the Apple Watch Ultra 3. Greg Joswiak, Apple's senior vice president of worldwide product marketing, said the two companies have "a long and proven track record of working together through Amazon's core infrastructure services" and that the partnership "ensures our users will continue to have access to the vital satellite features they have come to rely on."

Scale gap

Amazon faces a steep climb. Its Leo network has 241 satellites in orbit against Starlink's roughly 10,000, including about 650 direct-to-device satellites already offering mobile service through T-Mobile in the United States and carriers abroad. Amazon has approval from the Federal Communications Commission to deploy 3,236 satellites by July 2029 and said it will launch a next-generation direct-to-device system beginning in 2028.

CEO Andy Jassy told shareholders last week that Amazon Leo has commitments from Delta Airlines, JetBlue, AT&T, Vodafone, DirecTV Latin America, Australia's National Broadband Network, and NASA.

Globalstar stockholders will choose between $90 per share in cash or the equivalent value in Amazon stock. The merger requires regulatory approval; FCC Chairman Brendan Carr told CNBC the agency is "very open-minded to" the transaction and called it "consistent with the long-term vision that we have to make sure that the US leads in this next-gen era of direct-to-cell technologies."

The counterweight

The Washington Examiner framed the deal as a direct challenge to Musk, noting SpaceX deployed 29 additional Starlink satellites from Cape Canaveral on Tuesday alone. No left-leaning outlet appeared in the available reporting; the perspective of consumer advocates or antitrust critics on consolidation in the satellite market was absent from the day's coverage.

The merger's closing hinges on regulatory review and a requirement that Globalstar meet deadlines for replacing portions of its existing constellation before the transaction is finalized.