April 14 (Reuters) - Amazon's $11.6 billion deal to buy Globalstar bolsters its space ambitions with satellites and wireless airwaves, but will not fix the crippling shortage of rocket launches needed to build out a network capable of rivaling SpaceX, analysts said.
Rocket shortages, manufacturing disruptions and launch setbacks mean Amazon has deployed just 243 of the 3,236 satellites it promised in 2019 to put into low-Earth orbit to beam internet to consumers, businesses and governments.
The shortage has even compelled the tech giant to tap rival SpaceX's Falcon 9 rockets for launches, highlighting its dependence on third-party providers and the constraints this places on how fast it can build out its network.
SpaceX, by contrast, has deployed Starlink at a rapid pace using its own rockets, building a commanding lead in scale and coverage with a network of 10,000 satellites.
Both Amazon and SpaceX are battling for a lucrative market for internet from space, with potential customers ranging from airlines and cruise ships to remote businesses and the billions without reliable broadband.
"Unless Amazon can solve deployment speed and launch access, the gap remains structural, not just numerical," said Gregory Radisic, senior teaching fellow and lecturer at Bond University.
"Even with Globalstar, Amazon is still playing catch-up on deployment scale and cadence."
Globalstar's network is designed for direct connections to mobile devices, while Starlink has focused on broadband services and is developing similar capabilities through telecom partnerships.
Earlier this year, Amazon asked the U.S. Federal Communications Commission for a two-year extension to a July deadline to deploy about 1,600 satellites, roughly half of its planned constellation. The FCC has yet to rule on the request.
The delays have drawn scrutiny from regulators. FCC Chair Brendan Carr last month criticized Amazon's pace of deployment, responding to the company's objections to SpaceX's proposal to launch a much larger constellation of satellites.
Carr, who will have a say on the deal, told CNBC on Tuesday the FCC was "very open-minded" about the Globalstar acquisition.
BLUE ORIGIN LAGS
Amazon's long-term answer may lie closer to home.
Blue Origin, the rocket company founded by Jeff Bezos, is developing New Glenn, a partially reusable heavy-lift rocket designed to carry large satellite payloads.
New Glenn made its debut flight in January 2025 and is undergoing further testing as Blue Origin works toward more regular missions. But it has yet to reach the launch cadence needed to support Amazon's satellite rollout, leaving the company dependent on outside providers.
"What's certain is that the space race is heating up and big money is expected to be ploughed into this industry over the coming years," said Dan Coatsworth, head of markets at AJ Bell.
(Reporting by Akash Sriram, Deborah Sophia and Jaspreet Singh in Bengaluru; Editing by Aditya Soni and Shilpi Majumdar)
