(Image: ideogram.ai) The size of Elon Musk’s SpaceX empire has become so dominant that the question is often asked: How is anyone ever going to compete with this guy? The SpaceX IPO, set to happen later this year, is a testament to that — it will value the company at somewhere around $1.5-trillion to $2-trillion, the largest IPO in history by far.
But here is a little-known fact — the lion’s share of the value of SpaceX is not the reusable rockets, or social media, or artificial intelligence. It is his communications company, Starlink. Starlink is no longer a quirky side-hustle bolted onto SpaceX’s Mars dream. It is the commercial engine room. SpaceX generated about $15-billion to $16-billion in revenue in 2025 and roughly $8-billion in Ebitda, with Starlink contributing about 70% of that. In February, its subscriber base had crossed 10 million, and its constellation had grown to more than 10,000 satellites.
And so the announcement last week that Amazon was going to acquire satellite communications company Globalstar set tongues wagging. Was someone with deep enough pockets, experience, chutzpah and nous finally going to take on the Starlink Goliath? As always, it depends on which lens you choose to view the deal.
The first and most obvious problem is not simply that Starlink is much bigger. It is that Starlink’s advantage is structural. SpaceX designs the satellites, manufactures them, launches them on its own rockets, and then launches more when rivals are still haggling for slots. Amazon does not have that loop and may never have it. Reuters notes that Amazon has deployed only 243 of the 3,236 satellites it promised in 2019, and has even had to use SpaceX’s Falcon 9 for some launches.
Globalstar has only two dozen satellites in space, and they do not provide broadband services. They are called “direct-to-device”. That means you do not need a satellite dish (like Starlink does), but can rather receive and transmit data directly from your smartphone. What you give up is bandwidth, because the phone antennas are too weak to schlep lots of bits up and down through space. In other words, no TikTok or YouTube. Voice and texts are okay, but not much more. Great for rural areas that need basics, but of not much interest to the big wireless network providers who feast on data usage.
So why did Amazon do this deal?
Scott Galloway, on the latest Pivot podcast, framed the deal not as a simple Starlink clone but as part of a broader Amazon bundling play. He argued that Amazon could build a viable number two by combining its satellite effort with the consumer relationship it already owns, putting the service in front of roughly 115 million homes and perhaps eventually wrapping connectivity into a richer Prime offering.
In Galloway’s telling, Amazon’s real advantage is not romance-of-rocketry theatre. It is the dull, devastating power of distribution. Amazon does not need to beat Starlink at being Starlink. It needs to make satellite connectivity one more thing that arrives inside the cardboard box of Prime.
Spectrum
There is a second reason the market took the deal seriously: spectrum and the regulators who guard it. Globalstar’s frequencies are scarce, globally authorised, and expensive to replicate. Spectrum is a highly liquid and appreciating asset. It can be quickly sold to any big communications company. It brightens a balance sheet.
Also, the regulatory mood music sounds friendly. Federal Communications Commission (FCC) chair Brendan Carr told CNBC that the agency was “very open-minded” about the transaction; on Pivot, Kara Swisher described the FCC’s stance as “all gas, no brakes” for the US space economy. In other words, this is not one of those acquisitions likely to die in a swamp of official suspicion.
Also significant is that Globalstar already powers emergency satellite services on Apple devices, so Amazon is now inheriting one of the highest-profile consumer satellite applications in the world, installed on hundreds of millions of handsets. That is not a minor detail. Starlink’s comparable direct-to-cell service is built on spectrum it acquired from EchoStar and has only around six million active monthly users, while Apple’s ecosystem represents a much larger, ready-made distribution channel that money alone cannot manufacture.
Vertical integration
And yet, scepticism is warranted. The gap between Starlink and Amazon/Global is a yawning chasm.
Starlink’s advantages are not merely numerical. SpaceX’s vertical integration gives it cost and speed advantages no rival can replicate — it is vertically integrated from rocket design all the way to network operations. SpaceX launches approximately 133 Starlink missions per year and is manufacturing satellites at a rate of more than 4,000 annually. Every quarterly delay for Amazon widens the gap in network effects, terminal cost curves and customer lock-in. The first-mover advantage in satellite internet is not merely a head start. It compounds.
However, we should pause before dismissing the deal as a fool’s gambit. SpaceX is a business with an effective monopoly in satellite communications, but Musk’s political entanglements and mercurial personality have already pushed investors, consumers and governments to seek alternatives. A second credible network would matter not only for prices and product innovation, but for resilience, bargaining power and geopolitics.
So can Amazon catch up with Musk’s Starlink? Not in the straightforward sense, and not soon. Starlink’s lead in satellites, launch cadence, installed base, revenue and operating experience is simply too large. But that may be the wrong test. Amazon does not need to dethrone Starlink in the next three years to make this deal meaningful. It needs to become a credible, well-capitalised alternative with enough spectrum, enough consumer reach and enough regulatory wind at its back to stop Starlink from becoming the space-era equivalent of an unchallengeable utility.
Musk is still far ahead. For the first time in a while, though, someone with genuine heft has at least shown up on the launchpad. DM
Steven Boykey Sidley is a professor of practice at JBS, University of Johannesburg, a partner at Bridge Capital and a columnist-at-large at Daily Maverick. His new book, It’s Mine: How the Crypto Industry is Redefining Ownership, is published by Maverick451 in South Africa and Legend Times Group in the UK/EU, available now.