By Blaine Curcio

August 2, 2019

Credit: 2019 SpaceX

Over the past several years, as the new generation of Low Earth Orbit (LEO) High Throughput Satellites (HTS) has evolved from concept to the early stages of reality, I have written a few articles about these constellations and their nature as parts of a bigger puzzle—the puzzle of a global system of autonomous, constantly-connected “things”, including self-driving cars, drones, and basically anything on which one could fit a sensor. 

With each passing year of LEO-HTS business model development, the macro-level trends are becoming more clear. In my most recent piece on this topic, published in May 2018, I highlighted the fact that this was a three-horse race to build a global communications network to support a global network of autonomous connected things, with the three horses being SoftBank, SpaceX/StarLink, and Amazon/the Jeff Bezos series of companies. In the ~14 months that has followed, we have seen SoftBank double down on its investment in OneWeb, have seen SpaceX launch the first batch of 60 of its StarLink satellites, and indeed, saw Amazon announce its own LEO-HTS constellation.

Banking on Software-Enabled Mobility

SoftBank is a Japanese telco and investment vehicle. Although it has become more of a household name in recent years due to its Vision Fund, SoftBank remains relatively under-the-radar in the west, especially compared to tech giants Facebook, Google, Amazon, etc. The company’s Vision Fund is the brainchild of CEO Masayoshi Son, one of Japan’s richest men, a noted tech investor, and debatable eccentric. Son’s first Vision Fund raised nearly US$100 billion, a sum that SoftBank promptly poured into companies that it sees as helping to build an Artificial Intelligence (AI) and big data-enabled future. This has included WeWork, Uber, Didi Chuxing, PayTM, GM’s Cruise, and of course, OneWeb. The unprecedented investment spree has amounted to $70 billion in just under 3 years. Some of SoftBank’s investment partners, or investments, have also proven to be intriguing partners for OneWeb, with these including telcos (SoftBank, Bharti Airtel, Sprint), mobility companies (Uber, Toyota, Cruise), etc.

SoftBank’s recent activity in the LEO space, and more generally has been intriguing. The company led a US$1.25 billion funding round in OneWeb in March 2019, which boosted the OneWeb’s total fundraising to US$3.4 billion. Soon after, SoftBank announced the creation of its second vision fund, aiming to raise an additional US$108 billion to invest in startups focused on AI. In July, SoftBank announced an investment in Grab—a Southeast Asian ride-hailing giant—in Indonesia, as part of an announcement to invest US$2 billion into the country. The announcement took place during a meeting between Son and the President of Indonesia, Joko Widodo, indicating the levels of government at which SoftBank can count support. OneWeb has likewise recently made progress, with early 2019 seeing the company’s first launch of six satellites, and with additional launches planned before the end of the year.

Connecting All things in All Places, from A to Z

Credit:  2019 SpaceX

The Jeff Bezos Empire is the most recent official entrant in the LEO-HTS race, though it may also be the best-equipped. Despite lacking the sprawling investment portfolio of SoftBank, Amazon has a huge amount of capital, an advanced rocket manufacturer in Blue Origin, the world’s largest cloud computing infrastructure, and the most feared retailer in the world in Amazon. While SoftBank can count bets on hundreds of horses, and large control over a handful, Amazon has significant control over a not insignificant number of thoroughbreds, and of the three systems, is very likely best-positioned in terms of the degree to which people “need” its service today, and degree to which that need is increasing.

Amazon entered the LEO space in earnest with the introduction of AWS Ground Station in 2019 (though the project began in 2018), with this offering a “fully managed service that lets you control satellite communications, uplink, downlink….”. Following the introduction of AWS Ground Station, Amazon made a more significant announcement of its own LEO-HTS constellation of 3,236 satellites, called Project Kuiper. Project Kuiper is conceptually similar to OneWeb or StarLink, and the company has mentioned similar value propositions, namely “low-latency, high-speed broadband connectivity to unserved and underserved communities around the world”, with a vision to serve “tens of millions of people who lack basic access to broadband internet”, according to an Amazon spokesperson.

Amazon’s LEO-HTS plans are in the earliest phases of the three companies, but its existing business models will prove to be a compelling anchor customer for a constellation. Given the likelihood that the Amazon delivery process will become increasingly automated, and the assumption that these automated things will need constant connectivity, one can assume that a LEO-HTS constellation could be a way to serve this.