How Much Will Amazon Leo Cost?

Ever since Amazon announced Project Kuiper, which would later become Amazon Leo, its messaging has revolved around affordability and accessibility—creating low-cost equipment, connecting underserved communities, and bridging the digital divide. So the biggest question on everyone’s minds is “How much will it cost?”

With just months to go before the service launches for residential customers, Amazon still hasn’t provided specific details about plans or pricing. We can, however, make some predictions by comparing the project’s development to other satellite providers and by looking at statements made by Amazon about the project.

What does “affordable” mean?

Amazon has said that the mission of Leo “is to bridge the digital divide by providing fast, affordable broadband to communities unserved or underserved by traditional communications technologies.” So if we want to get an idea of what an affordable internet plan would be in underserved areas, a good first step would be taking a look at how much it costs to get internet in these areas right now.

Rural internet providers

The areas that most benefit from satellite internet providers like Amazon Leo are those that lack physical infrastructure, like cable or fiber-optic networks. This leaves wireless networks as the only option. Increased competition from providers like Starlink and T-Mobile has already brought down prices over the last few years, with most providers offering plans starting around $50, with faster plans reaching upwards of $100.

If Amazon Leo is going to live up to its ambitious goals, we should expect its cheapest plans to at least be on par with the budget plans of other rural providers. And although we know the capabilities of its customer terminals, we don’t yet know if there will be multiple pricing tiers making use of the same terminal. So it’s possible we could even see budget plans that beat the current competition by a significant margin.

Comparing Amazon Leo to Starlink

Another good way to estimate the future cost of Amazon Leo is to look at Starlink’s prices, both at its launch and currently. At the start of its open beta program, Starlink’s service cost just $99 per month, though the basic dish cost $499, making for an up-front cost of almost $600.

At this point, the high up-front cost wasn’t necessarily a problem. Starlink had very limited network capacity and was only allowing a small number of customers into the beta to test the product. These users tended to be the most dedicated tech enthusiasts who wanted to be among the first to test this revolutionary new satellite network and were undeterred by the high price tag.

So while low-Earth orbit (LEO) technology would have the most potential benefit for those in poorer, rural areas, they were not the people to use it in the beginning. In fact, rural areas in the South were some of the last areas in the U.S. to get Starlink coverage.

Since Amazon is one of the largest tech companies in the world, one would hope that it could beat Starlink’s opening prices right out of the gate. In fact, one of the original goals of Project Kuiper (as Amazon Leo was initially called) was to create a customer terminal that cost less than $500 to build. It’s probably not a coincidence that the project’s target cost was the same as Starlink’s initial price point.

While simply beating Starlink’s launch price would certainly give Amazon bragging rights, it’s not 2021 anymore. Amazon isn’t competing against the floundering startup Starlink was five years ago. It’s competing against the juggernaut Starlink is today.

Right now, you can get budget Starlink plans for as low as $50 per month. If Amazon Leo is going to compete for a broad customer base and fulfill its idealistic goals of closing the digital divide, it will have to beat those prices. And if Starlink tries to edge them out of the market by offering even lower prices, Amazon is going to have to follow suit. And if any company can do it, it’s Amazon.

Amazon logistics and manufacturing

The reason I believe Amazon Leo is going to dramatically change satellite internet isn’t because of the technology it’s introducing—that’s mostly just iterating on what Starlink has already accomplished. The real difference is the company behind it. Amazon is one of the largest tech companies in the world, and it has both experience and infrastructure that Starlink still can’t match.

Amazon has been building consumer electronics since it first launched the Kindle in 2007. Even though this was the company’s first foray into manufacturing its own electronics devices, it was able to launch the Kindle with a price tag of $399, which wasn’t far off from other e-readers like the Sony PRS-505, which was selling for $300 at the time. By the time it launched its next-generation Kindle, the price had already come down. Now, almost 20 years later, Sony doesn’t even make e-readers.

Amazon has already been flexing its manufacturing muscles with its rapid in-house satellite production, but this isn’t the only area where Amazon already has a head start. Early in the rollout of Starlink, the fledgeling internet provider struggled to keep up with demand. Prospective customers were waiting up to 11 months for their antennas to arrive after signing up. Starlink couldn’t manufacture or deliver its equipment fast enough.

Amazon, on the other hand, has built a trillion-dollar business around getting products to customers in a timely manner. One of its goals with Amazon Leo is to create fast and affordable user terminals that can be delivered easily worldwide, just like any other Amazon product. Even with a five-year head start, Starlink can’t compete with a company that has over a thousand logistics facilities around the globe.

And somehow, that’s not all. Amazon also owns the world’s most widely used cloud computing platform, Amazon Web Services (AWS). Unsurprisingly, Amazon Leo will be intertwined with AWS, making use of the services it provides as well as the physical infrastructure that Amazon has built around the world.

Many of the ground stations for the satellite network are built on AWS facilities, which are used to handling huge amounts of traffic. And since the data centers are right there, business customers can connect directly and securely to AWS services without even touching the public internet. And since so many organizations are already AWS customers, signing up for Amazon Leo isn’t a huge leap.

Between its manufacturing might, its computing prevalence, and its shipping empire, Amazon Leo is unlikely to run into any of the bottlenecks that slowed the growth of Starlink in its early days. Amazon also has the sheer size to absorb any losses that Leo might accrue as it fights for its share of the satellite market. That means that no matter how low Starlink drops its prices, Amazon Leo can always go lower.

Final thoughts

Amazon has made a huge investment in its upcoming satellite internet service. This is clearly a project that it wants to succeed, and it has the resources to make that happen. Just as Google was able to completely change home internet by throwing its weight behind Google Fiber, Amazon has the ability to do the same to satellite internet with Amazon Leo.

While I’m hesitant to speculate on what this could mean in the long run, right now, this means more competition, more innovation, and lower prices for consumers. I think it’s safe to say that Amazon Leo prices will be able to at least match current Starlink prices. And if the competition between the two providers gets especially fierce, we might see prices drop even lower. And that’s a good thing for internet users.

Additional resources

• Amazon Leo Equipment
• Amazon Leo Satellite Technology
• When Will Amazon Leo Be Available?
• Project Kuiper Is Now Amazon Leo
• Bezos Announces Another Starlink Competitor

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