Amazon’s Project Kuiper Aims to Provide Global Wi-Fi Network

You wouldn’t be reading this without the internet.

In fact, your life – and society as a whole – would undoubtedly be a shadow of itself without access to this global repository of information.

Nearly half of the world’s population will have internet access by the end of 2019, according to the International Telecommunication Union.

But the other half – roughly 3.8 billion people – will remain unconnected and “unable to benefit from key social and economic resources in our expanding digital world,” the union said.

The gap between those with internet access and those without is a phenomenon called the “digital divide.” And those companies looking to bridge this divide – like 5G network carriers – are setting up to create windfalls for prudent investors.

The New-Age Space Race

The digital divide has created a unique market. And companies are racing to fill the void.

One way to reach the billions of people without internet access is through a space-based Wi-Fi network – or constellation – of satellites.

Private companies, including Elon Musk’s SpaceX and Richard Branson’s Virgin Orbit, have already made strides in the space. And in February, startup OneWeb launched its first constellation of six satellites.

The problem is it would take more than 3,000 satellites to provide global Wi-Fi.

Not to mention the filing process is extensive and requires a stable company with the infrastructure to produce and launch expensive satellites.

In other words, you need a lot of money.

So last month, when Washington, D.C.-based Kuiper Systems LLC quietly submitted three filings to the International Telecommunication Union, it didn’t go unnoticed.

The filing mentions an initiative called “Project Kuiper.” It will consist of a number of satellites at three different altitudes: 784 satellites at 367 miles high; 1,296 satellites at 379 miles high; and 1,156 satellites at 391 miles high.

These strategic placements will provide internet access to more than 95% of the Earth’s population.

The Giant Behind It All

On April 4, Amazon (Nasdaq: AMZN) admitted it was behind the project.

“Project Kuiper is a new initiative to launch a constellation of Low Earth Orbit satellites that will provide low-latency, high-speed broadband connectivity to unserved and underserved communities around the world,” Amazon said.

“This is a long-term project that envisions serving tens of millions of people who lack basic access to broadband internet. We look forward to partnering on this initiative with companies that share this common vision.”

Reading between the lines, Amazon is looking to dominate this market by buying up the competition. And it certainly has the capital to propel itself to the top of this space race.

Put simply: The sky’s no longer the limit for Amazon.

The Amazon Web Services (AWS) cloud computing segment, which controls 32% of the cloud market, will play a critical role in this global Wi-Fi project.

AWS has been busy building its ground stations – a network of satellites and cloud computing servers that will transmit and receive data to and from satellites in orbit.

AWS Ground Station - How it Works diagram

On Your Mark…

Although Amazon doesn’t yet know what the total cost of this network will be, a company executive said the dollar amount isn’t critical, as CEO Jeff Bezos practically “sweats money at this point.”

Plus, Amazon has historically been willing to spend to fuel growth.

Analysts estimate this constellation could be active in five to eight years. And Amazon could reap billions in revenue once the satellites go into service.

This project cements Amazon as one of the prominent contenders in this global competition.

So now is the time for investors to position themselves on the front line.

Ready. Set. Race.

Good investing,