According to a recent report released by satellite industry consultant Tim Farrar, market expectations for a deal between Amazon.com (AMZN.US) and Viasat (VSAT.US) are heating up.

He stated: "When I talk to many people, what truly excites them is the expectation that Amazon will soon announce the acquisition of Viasat. This acquisition is primarily aimed at obtaining the international spectrum resources held by Viasat, while also integrating Viasat's Ka-band Geostationary Orbit (GEO) business with Amazon's Low Earth Orbit satellite internet service Leo, and strengthening Amazon's position in the government and aviation markets." He also predicted that if Amazon completes the acquisition, the Equatys joint venture established by Viasat and Space42 will come to an end as a satellite program. However, Amazon will still need to cooperate with Space42 to coordinate its use of L-band spectrum in the Europe, Middle East, and Africa region.

Meanwhile, Tim Farrar added that AST SpaceMobile, Inc. (ASTS.US) has attempted to organize a competing acquisition offer for Viasat, but this effort will face obstacles in financing and management. He said: "I have also heard that AST SpaceMobile has tried to organize a competing acquisition offer, but this requires strong support from telecom operators, and Viasat's management will strongly oppose it." "In contrast, selling Viasat to Amazon might be seen as a decent exit, completing the deal before Viasat's existing geostationary orbit business is completely crushed by competition from low earth orbit satellites."

These speculations emerged just as the U.S. Federal Communications Commission (FCC) approved Amazon's $11.5 billion acquisition of Globalstar, promoting Amazon's further expansion into Direct-to-Device (D2D) satellite connectivity services. The transaction is expected to be completed in 2027. This deal will give Amazon access to 25 MHz of internationally coordinated mobile satellite spectrum, as well as related infrastructure, enabling direct connection of mobile phones and other devices to satellites. The FCC stated that this transaction is expected to expand network coverage, strengthen emergency communications, and improve the utilization of related spectrum, while being unlikely to cause substantial harm to the public interest. Amazon has also submitted a pending application to deploy up to 5,105 D2D satellites and has agreed to continue supporting Apple's satellite services.

Tim Farrar also pointed out that there are risks in the spectrum arrangement between AST SpaceMobile and Ligado. He stated: "The relationship between AST SpaceMobile and Ligado remains tense. Since the payments AST makes to Ligado are only sufficient to cover Ligado's ongoing lease payments to Viasat, Ligado is completely unable to benefit from the Mobile Satellite Service (MSS) spectrum, despite the high valuation currently placed on it." He suggested that Ligado might relinquish spectrum rights in a settlement agreement with the U.S. government, thereby exposing AST SpaceMobile to potential risks.

In Tim Farrar's view, acquiring Viasat would help strengthen Amazon's competitiveness against SpaceX (SPCX.US) in the satellite communications field, as telecom operators increasingly view Amazon as a counterbalance to SpaceX. He stated: "In the D2D market, as market confidence in whether AST SpaceMobile can ultimately provide practical services continues to weaken, telecom operators view Amazon as the most realistic potential 'savior.'"

Additionally, Tim Farrar linked the "missing puzzle piece" mentioned by Musk during last week's SpaceX earnings call to the possibility of SpaceX acquiring the remaining business of EchoStar (ECHO.US) through a stock payment method. He believes that this transaction could give SpaceX access to DISH Wireless's network assets, as well as additional AWS-3 and CBRS spectrum resources; at the same time, SpaceX could also use this to replace the cash payments involved in the previous agreement to acquire AWS-4 and Band 70 spectrum. He stated: "Considering that the mediation process will continue until November 4, it would not be surprising if a deal is announced as early as next week. However, Ergen (Chairman of EchoStar) is known for being a tough negotiator, which may make it difficult for both parties to agree on a transaction price."