Bloomberg: Amazon testing mobile network for Kindle gear

|By:, SA News Editor

Sources tell Bloomberg Amazon (AMZN) has tested a mobile data network for its hardware using spectrum from Globalstar (GSAT.OB). However, they caution it's not clear if the tests, conducted "in the vicinity" of Amazon's Lab126 R&D unit (responsible for the Kindle line), are still ongoing.

Amazon has partnered with carriers to provide subsidized mobile connectivity for Kindle devices. Last year, the company introduced a 4G-capable version of the 8.9" Kindle Fire HD that offered 250MB/month of data for just $50/year. But even a moderate data user (never mind a heavy Prime Instant Video user) will go through 250MB in a month quickly.

The cost of any large-scale mobile network, even one limited to major urban areas, would run into the billions. Amazon's up-front costs would be much lower if it decided to lease capacity from an existing carrier and become an MVNO.

Hard-luck Globalstar has been petitioning the FCC for the right to use 80% of its satellite spectrum for terrestrial 4G mobile and Wi-Fi services. A ruling could arrive in the coming months.