Verizon, Amazon to integrate LEO satellites with 5G

LOS ANGELES – MWC LA – Verizon and Amazon said they would work to combine Verizon’s 5G wireless network with Amazon’s planned Project Kuiper constellation of low-Earth orbit (LEO) satellites. The first offering from the new partnership will backhaul Verizon’s cell sites through Amazon’s LEO satellites, allowing Verizon to offer fixed wireless Internet services in unconnected rural areas.

Today, Verizon counts around 150,000 fixed wireless Internet customers in rural and urban areas, but is working to expand that figure significantly over the coming years.

More broadly, Verizon and Amazon executives couched the agreement as a way for both companies to cross the digital divide and bring connectivity services to rural areas, both domestically and globally, thanks to the ubiquity of satellite coverage.

“Today’s announcement will help us explore ways to bridge that divide and accelerate the benefits and innovation of wireless connectivity, helping benefit our customers on both a global and local scale,” Verizon’s Hans Vestberg said in a release.

The financial analysts at New Street Research said the opportunity could be worth billions of dollars to the two companies. Specifically, they argued that Verizon’s wireless network currently does not cover around 7 million Americans. “If 50% of these people become Kuiper/Verizon customers and assuming Verizon’s phone ARPU [average revenue per user] of ~$60, there could be $2.4 billion in annual revenue,” they wrote.

Another 5G/LEO pairing

The new announcement between Verizon and Amazon comes just weeks after AT&T inked its own LEO deal with satellite operator OneWeb. Just like Verizon, AT&T said it would use the deal to tap into OneWeb’s satellites to extend its reach in hard-to-serve areas that fall outside of AT&T’s fiber footprint, or are beyond the reach of AT&T’s network of cell towers. OneWeb’s platform will “complement” AT&T’s existing access technologies, the companies said.

Similarly, KDDI in Japan said it would use Starlink – the LEO offering from Elon Musk’s SpaceX – to connect 1,200 of its remote cell towers with backhaul. KDDI said it would begin offering services under that new teaming as soon as next year.

But Verizon’s teaming with Amazon is noteworthy considering Project Kuiper trails both Starlink and OneWeb in terms of satellite deployments. As noted by GeekWire, Starlink already counts 1,650 satellites in orbit (and around 100,000 users), while OneWeb’s constellation is now up to around 358 satellites. Amazon, meantime, has received FCC approvals for the operation of more than 3,000 LEO satellites but has yet to launch any of them. However, Amazon has committed $10 billion toward the construction of its LEO network.

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