Amazon Tests Own Wireless Network

Amazon has conquered the ecommerce space, the enterprise sector, and helped shape the ebook market. The company has branched out to become a streaming media service, a movie and television show production company, and will likely become a smartphone ODM in the near future. Now there's talk that Amazon's next step is to become a wireless service provider.

Sources told Bloomberg this week that Amazon tested a new wireless network in Cupertino, California that will eventually allow customers to connect their devices to the Internet, seemingly paving the way for the rumored Kindle smartphone that is supposedly launching before next summer. The spectrum used in Amazon's testing is supposedly controlled by satellite communications company Globalstar Inc.

Sources said that Amazon continuously tries various technologies, but at this point it's unknown if the wireless network testing is still taking place. The trial took place in the vicinity of Amazon's Lab126 research facilities in Cupertino, the very same facilities that designs and engineers Kindle devices. That factor seemingly backs up all previous Kindle smartphone reports.

Moving into the wireless market makes sense given that Amazon produces tablet form factors with both Wi-Fi only and 3G connectivity. By offering a wireless service, Amazon could provide a more complete Kindle portfolio that may, in the long run, include laptop adapters and hotspots for Wi-Fi based multi-device connectivity. The move would also pull revenue away from wireless carriers that depend on consumers to add additional lines for their wireless devices.

Globalstar is reportedly seeking regulatory approval to convert around 80 percent of its spectrum to terrestrial use. The company applied to the FCC for permission to convert its satellite spectrum to provide Wi-Fi style services back in November 2012. The company then met with the FCC in June, and a decision is expected to be made within the next several months.

According to a company technical adviser, tests conducted on the spectrum show that it is capable of accommodating more traffic and offering faster speeds than traditional Wi-Fi networks. "We are now well positioned in the ongoing process with the FCC as we seek terrestrial authority for our spectrum," Globalstar CEO James Monroe said in a recent earnings call.  

If the FCC grants its approval, Globalstar would consider leasing the spectrum, share revenues with partners, or provide other business models. This opportunity will likely be of high interest to wireless carriers and cable companies given how scarce the wireless spectrum landscape has become.