Amazon Now Looking at Wireless Network Offering?
The “terrestrial low-power service” (TLPS) network is being developed by satellite company Globalstar Inc. and that company’s president said in a filing with the Federal Communications Commission (FCC) that the testing was done “to help a major technology company assess the significant performance benefits of TLPS for a transformative consumer broadband application.” Globalstar is traded over-the-counter under the ticker symbol ‘GSAT’ and shares are up 8.8% today at $0.655.
The main problem that Globalstar (and Amazon) need to deal with is interference, which torpedoed LightSquared’s efforts to build-out a similar network. If the interference issues can be resolved, Globalstar believes its spectrum holdings may be worth more than Clearwire’s, for which Sprint Corp. (NYSE: S) just paid $5 a share, valuing the Clearwire at around $14 billion.
Globalstar has a two-year testing period during which to iron out any problems with spectrum interference, so nothing is likely to happen soon. And Amazon’s plans are unknown in any case. It could license spectrum from Globalstar, acquire some of the smaller company’s spectrum directly, or buy the entire company. A lot depends on what Amazon has in mind — and that may change too as the testing progresses.