One of the most exciting news in cord cutting right now is new internet options, especially for rural Americans. Cord cutting is amazing, but the internet has long been a major bottleneck for its growth and costs.
Recently a number of new internet services have launched, including 5G home internet from Verizon, T-Mobile, AT&T, and more. Satellite internet is the other major advance in home internet with SpaceX’s Starlink service.
Amazon wants to get into this hot market and offer high speed internet from space to take on SpaceX’s Starlink. Now though, according to the Wall Street Journal, there may be a setback in Amazon’s plans.
Reportedly Amazon was set to launch its first set of test satellites in May. Now though ULA, the company that was scheduled to send the prototype satellites into orbit, suffered a major failure that is delaying the launch.
In October of 2022, Amazon announced their Project Kuiper would launch more than 3,000 satellites into low-earth orbit to offer this home internet service. To do this, Amazon has announced plans to build the required satellites in Kirkland, Washington.
The good news is Amazon has also secured a deal with multiple companies to launch satellites including ULA, Arianespace, and Blue Origin. With this deal, Amazon hopes to launch multiple prototypes into space to test the system before mass production starts. If ULA is unable to launch, Amazon does have other backup options if needed.
This delay is likely only minor and Amazon has said they plan to start offering internet service to customers in 2024 but only to a test group.
Last week Amazon’s CEO made it clear that home internet is a very important project for Amazon. Here is what Amazon’s CEO said in the letter to shareholders:
Kuiper is another example of Amazon innovating for customers over the long term in an area where there’s high customer need. Our vision for Kuiper is to create a low-Earth orbit satellite system to deliver high-quality broadband internet service to places around the world that don’t currently have it. There are hundreds of millions of households and businesses who don’t have reliable access to the internet. Imagine what they’ll be able to do with reliable connectivity, from people taking online education courses, using financial services, starting their own businesses, doing their shopping, enjoying entertainment, to businesses and governments improving their coverage, efficiency, and operations. Kuiper will deliver not only accessibility, but affordability. Our teams have developed low-cost antennas (i.e. customer terminals) that will lower the barriers to access. We recently unveiled the new terminals that will communicate with the satellites passing overhead, and we expect to be able to produce our standard residential version for less than $400 each. They’re small: 11 inches square, 1 inch thick, and weigh less than 5 pounds without their mounting bracket, but they deliver speeds up to 400 megabits per second. And they’re powered by Amazon-designed baseband chips. We’re preparing to launch two prototype satellites to test the entire end-to-end communications network this year, and plan to be in beta with commercial customers in 2024. The customer reaction to what we’ve shared thus far about Kuiper has been very positive, and we believe Kuiper represents a very large potential opportunity for Amazon. It also shares several similarities to AWS in that it’s capital intensive at the start, but has a large prospective consumer, enterprise, and government customer base, significant revenue and operating profit potential, and relatively few companies with the technical and inventive aptitude, as well as the investment hypothesis to go after it.