Subsea Cables & Internet Infrastructure

 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 provid...

The author argues that the stodgy business community is underestimating Amazon's threat to Starlink. Amazon is developing a wholesale model for LEO capacity that dovetails perfectly with its terrestrial network superiority over Starlink. At this point Starlink is pretty much everyone's enemy: "While Starlink also offers business tiers, its ambition to become a global consumer telco makes it a threat to carriers. For a company like Verizon or AT&T, Starlink is a frenemy: a partner today, a predator tomorrow." In contrast, Amazon wants to be everyone's friend. Amazon's dedicated 1 gigabit Ultra terminal will be sold to carriers that will deliver Internet to the premise via 5G connections. In rural Michigan I encountered households whose home routers were linked to the Internet via 5G mobile frequencies. Mobile carriers have found 5G demand to be very weak. Hence their spectrum is underutilized. Here's the solution. Amazon realizes that succ...