In order to keep up the momentum in their core businesses – search engines, e-commerce and social networks – some of the major players of the online economy are now developing new connectivity channels for their users.

Web giants now setting up as network access providers

In the wake of Google’s early forays into connectivity – its fibre optics program up and running in Kansas City, plus its connected balloons project – Amazon is now also going on the attack in the connectivity market, developing a WiFi network relay that will be accessible all over the world. This push on the part of the Internet giants is threatening to shake up the current equilibrium in the Internet access providers’ market, which has up to now been a stable, closed oligopoly. With this strategy of vertical expansion of their core activities, the Web giants appear to be aiming to achieve complete domination over both distribution and consumption of online content, offering a seamless service to their customers.

High-quality satellite connectivity

So far Amazon has given no official indication of a launch date for its WiFi service, but a number of details have emerged regarding the development of the connection project. Amazon is apparently partnering with California-based satellite network service provider Globalstar, from which the e-commerce specialist will rent frequencies that are then converted into terrestrial spectrum using a procedure known as Terrestrial Low-Power Service (TLPS). This advanced technology will enable Amazon’s tablet-using customers to access a WiFi relay that passes them through to the terrestrial network from anywhere in the world. This process is cheaper, makes for fast worldwide coverage and is much less of a commitment than making long-term investments in fiber optics. Amazon already offers free-of-charge Internet access on its Kindle tablets but, given the congestion on broadband at peak times, this 3G access has its limits. Moreover, using satellite spectrum for terrestrial connections provides better connectivity than that currently achieved on the majority of public WiFi networks.                      

End-to-end user experience            

The type of vertical integration being undertaken by Google with its fiber optics program in Kansas City and Austin and its ‘Project Loon’ (connected balloons) in Africa is also leading towards the creation of a complete and almost self-sufficient ecosystem involving connected devices, platforms and apps, plus Internet access, all offered by the same company. This strategic development is in turn likely to benefit Amazon’s core e-commerce business. By providing a direct Internet access service, Amazon will be well-placed to gather huge amounts of essential data on its users’ and potential customers’ habits and tastes, enabling the e-commerce giant to target products and advertising content more closely and thus also enhance its appeal to advertisers.

By Thomas Meyer
Journalist, Business Analyst