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Amazon To Launch Satellite For Massive Internet

Preparations for a test of a United Launch Alliance rocket/United Launch Alliance. Amazon .  com Inc.’s satellite-powered internet busines...

Preparations for a test of a United Launch Alliance rocket/United Launch Alliance.
Amazon. com Inc.’s satellite-powered internet business is closer to getting off the ground. The company recently unveiled the antennas that future subscribers of its Project Kuiper internet service would need to communicate with the satellites it plans to start mass producing this year. 

It isn’t clear when the first of those satellites will be blasted into orbit, but Amazon has said it expects to begin delivering broadband connections for some customers by the end of 2024. “Amazon’s never put anything into space,” Dave Limp, senior vice president of devices and services at Amazon, said at a satellite industry event in March. “We didn’t know how to do it. We had to build a team. But we’ve made a lot of progress.”

Four years after unveiling Project Kuiper, Amazon has laid the groundwork to get its fleet of satellites into orbit. The company has reserved flights on a launch vehicle from rocket company United Launch Alliance, or ULA, that is already in use. Amazon also made a splash last year when it purchased more than 80 missions over a five-year period on new rockets from ULA and two other providers. Eventually, the company plans to operate more than 3,200 satellites.

ULA had been scheduled to blast two Project Kuiper prototype satellites into orbit on its new vehicle, called Vulcan Centaur, in early May. That mission was recently delayed, however, because of a problem that emerged during a test of the vehicle, a spokeswoman says. During the test, a hydrogen leak emerged, causing a fast-burning explosion, ULA’s chief executive said in a tweet

The rocket provider has completed all other major development activities for Vulcan Centaur’s first launch, which would include Amazon’s satellites and other payloads, the ULA spokeswoman says. An Amazon spokesman declined to comment on the delay.

Taking on Starlink

Amazon is one of several companies that either are offering or plan to offer high-speed, low-latency internet connections via satellites orbiting relatively close to Earth. They say that kind of performance will distinguish their offerings from other internet services that depend on satellites stationed farther away, where beams cover more of Earth at once but face longer times sending and receiving signals.

Still, Project Kuiper and the others will have competition from within the satellite industry, as well as from companies that have built out on-the-ground internet infrastructure. One such competitor is Starlink, the satellite-internet unit operated by Elon Musk’s SpaceX, which has several thousand satellites in orbit already and has more than one million subscribers. OneWeb, a London-based company partially owned by the U.K. government, in March completed the deployment of its initial fleet, after an Indian launcher blasted a batch of its satellites into orbit. 

The first stage of a United Launch Alliance rocket being prepared / United Launch Alliance.
Some governments, including China’s, are planning similar constellations. It isn’t cheap to deploy a large, low-Earth-orbit satellite network. Amazon has discussed investing $10 billion on Project Kuiper. Annual operating costs for a fully built-out network are steep, with expenses for replacing satellites running to at least $1 billion annually, assuming the satellites have a five-year lifespan, according to an estimate from McKinsey & Co. 

At Amazon’s 2021 shareholder meeting, Jeff Bezos said he couldn’t guarantee that the company’s bet on Project Kuiper would generate returns. “I believe it will, and we’re working hard to ensure that’s the case,” said Mr. Bezos, who at that time was still the company’s chief executive. 

Amazon’s current CEO, Andy Jassy, indicated in a recent letter to shareholders that Project Kuiper has the potential to become a big business, considering the hundreds of millions of households and businesses around the world that don’t have reliable internet access. What’s more, few companies have the technical expertise and investment wherewithal to serve such a large market, he said in the letter. “We believe Kuiper represents a very large potential opportunity for Amazon,” he wrote. 

Eye on costs

Scaling up the business is important to getting toward profitability, given the significant startup costs, says Naveen Kachroo, head of product and business development at Project Kuiper.  Project Kuiper has been focused on minimizing costs that could pose hurdles to adoption, he said in a recent interview: “Performance and cost, for us, have been sort of our driving, tip of the spear, design points.” To that end, Project Kuiper has worked to create satellites that are able to deliver significant amounts of salable internet capacity, Mr. Kachroo says. “We’re trying to reduce the number of satellites we need,” he says.

Project Kuiper’s user antennas also have been developed with cost in mind, he says, and will need relatively less power to form a link with satellites. In March, Project Kuiper displayed the antennas for the first time. The standard customer terminal measures about 11 inches square and weighs roughly 5 pounds not counting the mounting bracket. Amazon has said it believes it can manufacture these terminals for less than $400 each. 

There is also a larger terminal for business clients that need more bandwidth and a smaller one that will provide less speed but at a lower price.  Prices for hardware and monthly service haven’t been disclosed. One benchmark for residential customers is SpaceX’s Starlink, which charges households in the U.S. $90 a month or $120 a month for service based on location, following a $599 one-time hardware fee. Costs for subscribers in developing countries are less, according to Starlink’s website.