Amazon and SpaceX land space communications contracts with NASA

SpaceX Starlink 5 satellites are pictured in the sky seen from Svendborg on South Funen, Denmark April 21, 2020. Ritzau Scanpix/Mads Claus Rasmussen via REUTERS

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WASHINGTON, April 20 (Reuters) – Amazon’s satellite business, SpaceX’s Starlink network and other satellite companies won a combined $278.5 million contract from NASA on Wednesday to demonstrate communications in space as the US space agency prepares to replace its current network of orbiting satellites with privately-built systems.

NASA is increasingly looking to rely on private space companies for its operations and wants to stimulate more commercial activity in areas ranging from space communications to sending humans into orbit.

Amazon’s Project Kuiper (AMZN.O), a planned network of more than 3,000 satellites built to deliver high-speed internet to remote areas, won $67 million, while SpaceX’s Starlink venture, a larger satellite Internet network with some 2,000 satellites in space already, received $70 million.

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NASA uses its current system, called the Network of Tracking and Data Relay Satellites, to communicate with orbiting spacecraft, such as SpaceX’s Crew Dragon capsule when it transports astronauts to and from the International Space Station.

“The goal here is really to get industry to join us and develop these capabilities for customers that are not just NASA but also other space-based customers, hoping to reduce our costs,” said Eli Naffah, NASA communications manager. Services project, told Reuters.

Each company is expected to complete development and demonstrations of its satellites under the contract by 2025, NASA said in a statement.

The other winners are Inmarsat, SES, Telesat and ViaSat (VSAT.O). Competition is fierce primarily between Elon Musk’s SpaceX, Amazon and Telesat to deliver high-speed internet from space, an expensive business venture that could generate billions in revenue once fully operational, analysts say.

Starlink, although not yet completed, has thousands of customers in various countries. Amazon, further behind, aims to launch its first two satellite prototypes in late 2022.

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Reporting by Joey Roulette, Editing by Rosalba O’Brien

Our standards: The Thomson Reuters Trust Principles.

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