Under the agreement, AT&T will use Leo’s satellite internet service, while providing ground-based fiber connectivity to AWS data centers
In sum — what to know:
Hybrid connectivity play: Amazon Leo and AT&T signed a new agreement which will see the two companies leverage their satellite broadband service and fiber-optic network respectively in their networks.
Cloud shift: The deal will also see Amazon migrate its network service enablement applications to AWS Outpost, a hybrid cloud platform.
Eye on fiber: Besides adding satellite services to its network, AT&T is also doubling down on fiber with plans to reach 60 million locations by 2023
AT&T and Amazon this week inked a multi-faceted deal, building on the two companies’ continued collaboration to expand connectivity across the U.S..
Under the agreement, the carrier will avail Amazon Leo’s upcoming satellite broadband to extend services to business users in dead zones that are currently out of reach of AT&T’s network. In turn, AWS will leverage AT&T’s high-speed fiber network to connect its data center locations, the companies said in a joint statement.
The agreement will also see AT&T moving workloads from its private infrastructure to AWS Outpost, a hybrid cloud offering. To expedite the process, it will further tap AWS’ Amazon Q Developer and other agentic services on its portfolio.
“By pairing our expanding fiber infrastructure with AWS’s cloud capabilities, and through our collaboration to deliver the infrastructure of the future by connecting data centers, we’re creating a more resilient, scalable, and intelligent connectivity ecosystem,” AT&T’s senior VP of product, Shawn Hakl, said.
“AT&T gains access to AWS’s cloud capabilities and AI tools to accelerate their infrastructure modernization, while AWS benefits from AT&T’s expertise in high-capacity fiber networking,” AWS’ VP of telecommunications, Jan Hofmeyr, weighed in.
Post-announcement, shares of rival providers Globalstar and AST SpaceMobile tanked 8% and 12% respectively.
Betting on new players
The announcement comes amid a broader push to combine wireline and satellite-based connectivity to fill coverage gaps in remote and rural areas. AT&T’s first responder network FirstNet is working with AST Space Mobile to that end. Comcast also is working with Starlink to connect users in areas underserved by its land-based network.
The combined service is expected to complement AT&T’s fiber-based gigabit internet service which currently covers metros and suburbs, but is not accessible in remote areas, helping the carrier acquire new customers in those pockets.
Amazon Leo’s satellite-based fixed broadband service adds more options to the carrier’s existing satellite broadband services, after the work with AST. However, something must be said of AT&T’s choice of partners when it comes to satellite services. Where Starlink makes an easy choice for many carriers, AT&T has shown preference to work with smaller and upcoming providers, like AST and Amazon Leo.
The only issue is, Leo is still in a beta-test phase. The company has faced repeated launch delays, and recently requested FCC for an extension of timeline, which further pushes out the date of a commercial launch. However, once released, Leo aims to connect 400 million to 500 million households across America.
AT&T’s fiber push
AT&T remains bullish on ground-based fiber, as is evident from its $5.75 billion acquisition of Lumen’s Mass Market fiber business on Monday.
“AT&T Fiber – America’s best and top-rated technology for getting on the internet – will be available to millions more people as we expand the service in 32 states,” John Stankey, chairman and CEO, said in a statement, announcing the purchase.
The competition in the wireless market has grown stiffer in the past months, as customers switch providers in search of deeper discounts and better connectivity. Despite having a subscriber base of millions, AT&T has struggled with high customer churn in the past few years. But the company is ramping up efforts to win back customers lost to rival providers, T-Mobile and Verizon, with service bundles and reduced prices.
Through purchase of Lumen’s fiber business, AT&T has inherited over a million fiber subscribers, and is on its way to add more as it sets sights on the 60 million fiber locations mark by 2030.
