Will Amazon’s Flywheel Consume the Rural Broadband Advantage?

What is the Amazon Flywheel? It is best described in a Bloomberg article examining Amazon’s Market Reach.

As Amazon grew, the company adopted a business school concept called the flywheel, loosely defined as a sort of self-reinforcing loop. Where possible, projects were to be structured to bolster other initiatives underway at the company.

Here is an example of the flywheel in action:

By the time Amazon began breaking out the revenue of Amazon Web Services in 2015, the cloud-computing unit had reshaped how businesses used technology. It was also Amazon’s biggest money maker, churning out billions of dollars a year in profit that the company could put to work investing in new services and expansion of its core retail business. Once again, the flywheel in action.

With the announcement that Amazon will be launching 3,236 low earth orbiting satellites to provide broadband internet services from space the potential competitors SpaceX, OneWeb, Telesat and LeoSat took notice. The most vocal was Elon Musk who claimed Amazon was copying SpaceX.

Perhaps those that Amazon’s broadband network will impact the most, the mom and pop stores across the nation, may not have given the announcement a passing thought.

While the Amazon LEO satellites will be providing high-speed internet access to 14 million rural US citizens who do not have access now, they will also be providing these rural consumers access to Amazon’s e-commerce kingdom. While Amazon can offer cloud services to small business in rural communities at the same time, they could be stealing those small business customers with their lower cost e-commerce options.

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According to the Foundation for Rural Service study current rural broadband users account for $1.4 Trillion in an online transaction, 14% of all internet driven transition, or 7% of GDP. However, they’re 19 million users that do not have Internet access or have access too slow for effective e-commerce. Amazons LEO network will provide easy access to these unserved broadband customers and at the same time adding them to the Amazon e-commerce customer base. The flywheel in action.

While SpaceX, OneWeb, Telesat, and LeoSat are planning to provide broadband services, Amazon will be providing broadband service, but the primary goal is the creation of marketing and sales infrastructure, which is a far different business model than the service based competition.  The depth of Amazon’s offerings gives them an advantage.

The problem remains, will Amazon’s space-based broadband access be an advantage or detriments to rural communities? Given Amazon’s market penetration so far, it appears that a ubiquitous internet will transform communities, there will be more information based businesses and fewer street side shops selling commodities that Amazon can deliver for less.

Your thoughts?

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Where is Waldo, er OneWeb 0012?

Russ Steele

Knowing OneWeb LEO satellites are zipping around overhead I often wonder where they are. I found a free app for my iPhone and iPad that lets me track specific satellites in real time. The app is called SatSat, and it runs on both my smartphone and an old iPad. SatSat is satellite tracking software for use by radio amateurs, scientists or hobbyists. It displays current and next passes for any satellites listed in the index. It also provides amateur radio satellite beacons frequencies for radio detection. SatSat automatically fetches updated satellites data.  No public beacon frequencies for OneWeb, just Amateur Satellites.

I have been using SatSat to track OneWeb birds and the SpaceX’s test satellites Tintin A and Tintin B, with the ISS creeping into the target display.

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Location of Satellites at about 3:45 PM Pacific Time 04-10-19

This afternoon I opened up SatSat on my iPhone and discovered that the WebOne string of satellites would become directly over my location, OneWeb 0011 already above the detection horizon.

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OneWeb 0011 pasted my location headed North.

I popped open the iPad for a larger view and hoped to do a screen capture. I got the larger picture, but could not get the iPad to do a screen capture. Using Plan B, I used the iPhone camera to capture the iPad screen. My apology for the fuzzy photos, but they are good enough to see the location of the satellites come over the horizon. When in the line of site it is possible to acquire a signal (AOS), and when they are out of range over the horizon (LOS) the signal is lost. As OneWeb  0011, 0006, 0007, and 0008 transition overhead the AOS periods were from 14 to 17 minutes. OneWeb 0012 was a laggard, somewhere over the Southern Indian Ocean when the string was approaching my location in the Central Valley of California headed North.

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OneWeb 0006 at the top, followed by 0007and 0008 with 0010 three minutes to AOS.

Although I did not calculate it precisely, with the string to OneWeb birds overhead, I would have had more than 30 minutes of coverage, and perhaps a little more as OneWeb 0012 final showed up much farther to the West but could have provided some AOS time.

SatSat is available at the Apple App Store.

 

How Small are SpaceX and OneWeb Satellites

Russell Steele

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The OneWeb satellite has been described to be about the size of a beer refrigerator. That may be hard for some to visualize in the above graphic, so here is a beer refrigerator sold on Amazon.

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The SpaceX Starlink satellite is reported to be 1.1 meters (39in) long and 0.7 meters (28in) wide and 0.7 meters (28in) tall. The beer refrigerator above is 37.5 x 26.4 x 21.2 inches a bit smaller than a Starlink bird, but it gives you a sense of the size.

So, we can say these LEO Sats are about the size of a large beer cooler.

Can Social Media Handle Four Billion More Users?

Russ Steele

It has been reported that Facebook globally has two billion users, on today’s networks with large segments of the global population living in internet deserts. Places were there is no connectivity, making the use of social media extremely difficult. China’s social media sites are reported to have half a billion users. Add another half a billion to include all the other social network sites, and it’s clear we are becoming a connected world.

space_network_matrixSpace-based internet will cover the planet from 57 degrees North to 57 degrees South. Industry experts estimate this will bring 4 billion more users to the internet that do not have access today.

That would be four billion new customers for Amazon, many living in rural areas far from the local store. It is also four billion potential social media users. Social media giants Facebook, Twitter, Instagram, and a plethora of others are struggling to manage the current customer base, with news of data breaches in the daily news. Can they handle four billion more customers?

While writing this, I had another thought. Amazon Prime Members are offered free two-day shipping. Satellite internet is going to connect hundreds of millions of new rural customers, many at the end of a 40-mile driveway. Once Amazon has added hundreds of millions of rural customer will shipping still be free?

Here’s why Amazon is trying to reach every inch of the world with satellites providing internet

CNBC has the details:

  • Amazon is working on Project Kuiper, which would put 3,236 satellites into orbit to provide high-speed internet to any point on the globe.

  • “You can see the clear profit motive here for Amazon: 4 billion new customers,” Space Angels CEO Chad Anderson said.

  • CNBC spoke to more than a dozen space industry analysts and executives about Amazon’s proposal and the customers, competitors and costs involved.

In my opinion, this is the money quote:

Two industry officials said that this move “validates the market model” for these immense internet satellite networks, especially since “Amazon is a publicly traded company” with a broader shareholder base, unlike other space companies. Additionally, Amazon’s entrance “makes an already challenging market even more competitive,” one executive said.

Full Article is HERE.

There are still challenges ahead, as some dictator controlled countries do not want an open internet overhead, especially one selling ideas contrary to their socialist/communist doctrine.  Interesting times ahead.

 

OneWeb CEO Adrian Steckel On Big Tech’s Space Race

OneWeb CEO Adrian Steckel joins “Squawk Alley” to discuss the company’s ability to secure its largest funding to date, and its first successful satellite launch.

The video is HERE.

Some high points, the satellites cost one million each. Airbus is currently building one a day, with a goal of two a day by end of the year.  The service will start when then satellites 650 are in orbit.  First customer targets are airlines, cruise ships, and marine transportation fleets.  Also, significant targets are schools around the world, with government sponsorship.  Over time the service cost will be reduced for standalone users.  Watch the video for all the details.

Added comment:

Starting around October, OneWeb expects to launch 30 or so more satellites every month as it looks to build a constellation of 650 satellites in low Earth orbit.

At that launch rate, it will take 22 months to reach 650 birds in orbit, assuming no failed launches and fully operational satellites.  Services could start in the summer of 2021.

If I were on the school board of a rural school with poor broadband,  I would be budgeting and writing grants for a OneWeb terminal for my school. Be prepared for the start of the 2021 school year, with a OneWeb Terminal using WiFi broadband distribution.

OneWeb Terminal

Ariane 6 Maiden Flight Will Deploy Satellites for OneWeb

Spacedaily.com has the details:

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Ariane 6 File Graphic

OneWeb is the developer of a new global, high-speed, low latency satellite-based network designed to address the most demanding global connectivity challenges worldwide. Ariane 6 will be available to OneWeb from the second half of 2020 to provide launch capacity that supports the full deployment and replenishment of the OneWeb constellation.

The launch service agreement specifies the use of the qualification launch of the Ariane 62 version, scheduled for the second half of 2020; the two Ariane 6 options (either in its 62 version, accommodating up to 36 OneWeb satellites, or in the 64 version, up to 78 OneWeb satellites) will be utilized starting in 2023.

The OneWeb satellites will be launched by the first Ariane 62 into a near-polar orbit at an altitude of 500 kilometers before raising themselves to their operational orbit.

OneWeb’s mission is to deliver global communications through a next-generation satellite constellation that will bring seamless connectivity to everyone, everywhere.

To this end, OneWeb is building a network of low-Earth orbit satellites that will provide high-speed, low latency services to a range of markets – including aeronautics, maritime, backhaul services, community Wi-Fi, emergency response services and more. Central to its mission, OneWeb also will be focused on connecting schools and working to bridge the digital divide for people everywhere.

With its system deployed, the OneWeb constellation will enable user terminals capable of offering 3G, LTE, 5G and Wi-Fi coverage, giving high-speed access around the world – by air, sea and land.

OneWeb Terminal

Continue reading HERE. [Emphasis added]