The Empire Strikes Back: The AT&T And Amazon LEO Alliance

 Amazon LEO is showing the world that the satellite wars are just beginning. A recurring Silicon Valley theme has been that Starlink has a long term global monopoly on LEO telecommunication services. In fact, the term is 'global public utility'. Starlink supposedly has scale advantages and benefits from an insurmountable cost edge due to vertical integration in the form of satellite manufacturing and launching services. This is of course sheer hogwash. While SpaceX has a cost edge right now, it has no technology moat to preserve an edge long term over the rest of the industry. There is no patent barrier to creating a reusable launch vehicle. Several players including Blue Origin and the Chinese are close to perfecting reusable rockets. Just like Starlink, LEO is manufacturing its own satellites and its per unit costs are steadily falling.

AT&T has agreed to migrate computer work loads to AWS with some of it involving Amazon's Outpost service. This involves Amazon providing its own designed and software loaded servers to AT&T's private data centers. Amazon designs these servers and they include the software to set up essentially a private cloud at the customer's own data center. Other aspects include wholesaling of AWS LEO capacity for AT&T clients and some face saving AT&T 400G wave sales to Amazon.

Deal details are quite vague, but it illustrates the radically different Starlink and Amazon approaches to the market. Starlink has had the most success in developed countries targeting households in fibre poor rural areas. The customers include households, increasingly the US military, and airlines. Every customer is an end user. Amazon has much deeper experience in customer acquisition and large scale operations. I believe LEO management understands that it has superior edge in sales. Its parent company, Amazon, has an enormous set of existing and mostly happy customers to which it can market and sell at very low cost. So the return on marketing dollars should be vastly higher than what Starlink can achieve. LEO management understands that it was a Starlink strategic error to sell directly to customers in the Global South. Starlink's lack of good customer support with native language skills combined with permitting delays and the high cost of terminal equipment has resulted in poor sales to the largest part of the global addressable market. A smarter strategy in regions like Africa or India is to wholesale the LEO capacity to the local incumbents and mobile operators. This allows Amazon to focus direct efforts on higher margin and bigger spending corporate clients as opposed to poor households and communities. 

For more details, click here: https://news.satnews.com/2026/02/04/att-and-amazon-forge-a-giant-in-the-skies-the-multi-layered-strategy-behind-the-kuiper-cloud-pact/?

Screenshot of Article Title Concerning AT&T And Amazon LEO



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