While SpaceX and its Starlink service have been receiving the lion’s share of the headlines when it comes to satellite internet news, competition is on the horizon. Perhaps the stiffest potential competition comes from Project Kuiper, and Amazon is set to launch its first two satellites in 2022.
Kuiper Systems is a subsidiary of Amazon. Project Kuiper is an ongoing program through which that company will launch low-orbit Earth satellites. That constellation will then be used to provide internet service to customers in rural areas. Satellite internet is now seen as a key component in closing the digital divide not just in America but throughout the world. There is a great deal of money to be made here, and other competitors include OneWeb and Boeing. Amazon plans to launch its first two prototype satellites in the fourth quarter of 2022.
Amazon is still in the early stages. It has permission to launch 3,236 satellites and a 2026 deadline. But the two prototypes being launched are exactly that. The Project Kuiper design has never been tested in space and only on the ground. If all goes well, Amazon plans to spend $10 billion launching more.
SpaceX Far Ahead
Starlink is far ahead of Amazon and the other competition. SpaceX has already launched 2,000 satellites, and it has the approval to launch many more. While it has certainly run into its share of problems as the project has evolved, the Starlink beta program has exceeded the most optimistic expectations. The beta test only began in the fourth quarter of 2021, but they already have thousands of customers and look to be on pace to go fully live with the program in 2022
Reusable Rocket Boosters
A key reason that SpaceX is far ahead of everyone else is that it has its own reusable rocket boosters that it can use to launch its satellites. Amazon does not have this resource yet. Many people presume it does due to Blue Origin, but Blue Origin has a different scope than SpaceX and one that is not as wide. The first two Amazon prototypes—KuiperSat-1 and KuiperSat-2—will be launched by ABL Space Systems.
ABL is a small startup among a number of similar small startups that have been established to meet the demand that all of these satellite companies have. Amazon has a multi-launch agreement in place with ABL and has recently made an agreement with United Launch Alliance for another nine launches. It is also negotiating with other companies for more. Interestingly enough, one of those companies is SpaceX, which is often seen as its primary competition.
Testing Connections With the Ground
If the prototype launch is successful, Amazon will be testing connections between those launched satellites and ground antennas. It has sites in Central Texas, South America, and the Asia-Pacific region. During this test period, the Project Kuiper team will not only need to demonstrate that the prototypes work and achieve speeds fast enough to deliver high-definition video but will be under intense pressure to minimize costs going forward. Affordability is a key characteristic of the Amazon brand. In addition, at $100 a month, Starlink is already more affordable than many industry insiders were expecting.
One of the main challenges facing Amazon and all of these companies is the cost of the antennas that end-users will need. It is the reason Starlink charges a $500 equipment fee. The original cost to make each antenna was $3,000. Starlink has lowered that cost to $1,500, but that still means it is losing $1,000 per customer and will not begin turning a profit on a new client until the 11th month of service.