Taking on SpaceX, Amazon to invest $10bn in satellite broadband plan

Amazon plans to create a network of satellites that will compete with the Starlink network being built by Elon Musk’s SpaceX program, above. (AFP)
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Updated 01 August 2020

Taking on SpaceX, Amazon to invest $10bn in satellite broadband plan

  • Amazon said: The project will also benefit wireless carriers deploying 5G and other wireless service to new regions

WASHINGTON: Amazon.com said that it will invest more than $10 billion to build a network of 3,236 satellites that will provide high-speed broadband internet services to people around the world who lack such access.

The announcement follows the Federal Communications Commission’s approval of the plan, called “Project Kuiper,” for the constellation of low-Earth orbit (LEO) satellites that will compete with the Starlink network being built out by Elon Musk’s SpaceX. It also comes on the heels of Amazon posting its biggest profit in its 26-year history.
“A project of this scale requires significant effort and resources, and, due to the nature of LEO constellations, it is not the kind of initiative that can start small. You have to commit,” the company said in a blog post.
The project will also benefit wireless carriers deploying 5G and other wireless service to new regions, Amazon said.
By comparison, SpaceX has launched more than 500 satellites of the roughly 12,000 expected for its Starlink constellation in low-Earth orbit and plans to offer broadband service in the US and Canada by the year’s end. The FCC approved SpaceX’s request in 2018.

FASTFACT

SpaceX has launched more than 500 satellites of the roughly 12,000 expected for its Starlink constellation in low-Earth orbit.

SpaceX President Gwynne Shotwell, who in February floated the idea of spinning Starlink off for an IPO in the coming years, has said the Starlink constellation will cost the company roughly $10 billion.
While extremely costly to deploy, satellite technology can provide high-speed Internet for people who live in rural or hard-to-serve places where fiber-optic cables and cell towers do not reach. The technology could also be a critical backstop when hurricanes or other natural disasters disrupts communication.
The FCC authorization, adopted with a 5-0 vote, requires Amazon to launch half of its satellites no later than mid-2026 and build out the rest of the constellation by mid-2029.
Amazon said that it would begin to offer broadband service once 578 satellites are launched.
It had 110 open positions for its “Project Kuiper” posted on its website on Thursday. The satellites will be designed and tested at a new research and development facility opening in Redmond, Washington.


S&P 500 inches closer to record high

Updated 12 August 2020

S&P 500 inches closer to record high

  • US stock market index returns to levels last seen before the onset of coronavirus crisis

NEW YORK: The S&P 500 on Tuesday closed in on its February record high, returning to levels last seen before the onset of the coronavirus crisis that caused one of Wall Street’s most dramatic crashes in history.

The benchmark index was about half a percent below its peak hit on Feb. 19, when investors started dumping shares in anticipation of what proved to be the biggest slump in the US economy since the Great Depression.

Ultra-low interest rates, trillions of dollars in stimulus and, more recently, a better-than-feared second quarter earnings season have allowed all three of Wall Street’s main indexes to recover.

The tech-heavy Nasdaq has led the charge, boosted by “stay-at-home winners” Amazon.com Inc., Netflix Inc. and Apple Inc. The index was down about 0.4 percent.

The blue chip Dow surged 1.2 percent, coming within 5 percent of its February peak.

“You’ve got to admit that this is a market that wants to go up, despite tensions between US-China, despite news of the coronavirus not being particularly encouraging,” said Andrea Cicione, a strategist at TS Lombard.

“We’re facing an emergency from the health, economy and employment point of view — the outlook is a lot less rosy. There’s a disconnect between valuation and the actual outlook even though lower rates to some degree justify high valuation.”

Aiding sentiment, President Vladimir Putin claimed Russia had become the first country in the world to grant regulatory approval to a COVID-19 vaccine. But the approval’s speed has concerned some experts as the vaccine still must complete final trials.

Investors are now hoping Republicans and Democrats will resolve their differences and agree on another relief program to support about 30 million unemployed Americans, as the battle with the virus outbreak was far from over with US cases surpassing 5 million last week.

Also in focus are Sino-US tensions ahead of high-stakes trade talks in the coming weekend.

“Certainly the rhetoric from Washington has been negative with regards to China ... there’s plenty of things to worry about, but markets are really focused more on the very easy fiscal and monetary policies at this point,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

Financials, energy and industrial sectors, that have lagged the benchmark index this year, provided the biggest boost to the S&P 500 on Tuesday.

The S&P 500 was set to rise for the eighth straight session, its longest streak of gains since April 2019.

The S&P 500 was up 15.39 points, or 0.46 percent, at 3,375.86, about 18 points shy of its high of 3,393.52. The Dow Jones Industrial Average was up 341.41 points, or 1.23 percent, at 28,132.85, and the Nasdaq Composite was down 48.37 points, or 0.44 percent, at 10,919.99.

Royal Caribbean Group jumped 4.6 percent after it hinted at new safety measures aimed at getting sailing going again after months of cancellations. Peers Norwegian Cruise Line Holdings Ltd. and Carnival Corp. also rose.

US mall owner Simon Property Group Inc. gained 4.1 percent despite posting a disappointing second quarter profit, as its CEO expressed some hope over a recovery in retail as lockdown measures in some regions eased.

Advancing issues outnumbered decliners 3.44-to-1 on the NYSE and 1.44-to-1 on the Nasdaq.

The S&P index recorded 35 new 52-week highs and no new low, while the Nasdaq recorded 50 new highs and four new lows.