Amazon Partners Up with Vrio to Launch Satellite Internet Across South America

Buenos Aires — Vrio Corporation, the parent company of DIRECTV Latin America and Sky Brasil, signed an agreement this week to market services offered by Project Kuiper, the low-Earth orbit satellite broadband network being developed by American technology giant Amazon (AMZN), in South America.

The service will initially be available in the southern hemisphere in Argentina and Chile, and later in Australia and New Zealand. The satellite deployment process is expected to begin at the end of 2024, Amazon told Bloomberg Línea.

U.S.-based Vrio, part of Argentina’s Werthein Group, plans to distribute Project Kuiper to residential and business customers in Brazil, Uruguay, Peru, Ecuador and Colombia. The service will be offered as part of packages from DIRECTV Latin America and Sky Brasil, in accordance with each country’s regulations.

Vrio will begin selling the service in mid-2025, according to sources at the holding company.

Although the companies did not provide information on pricing, profitability or download speeds, they assured that their goal is to provide affordable, high-speed service to a potential clientele of 383 million people, including some 200 million people in rural areas who currently have no Internet access.

“From day one, we designed [the service] with affordability in mind ... [and] we made a lot of design and technology decisions to control the cost of the service,” said Naveen Kachroo, head of Project Kuiper sales, in a conversation with Bloomberg Línea from Seattle.

The executive added that Amazon aims to make not only the cost of the service economical, but also the cost of the equipment to ensure that its services are used by as many customers as possible.

Competition and Revenue Outlook

Project Kuiper and Vrio’s main competitor in South America will be Starlink, the satellite Internet company founded by South African-American tycoon Elon Musk. Starlink began marketing its services in Argentina earlier this year and currently charges ARS$499,999 (US$382) for equipment and a monthly fee of ARS$62,500 (US$48).

Darío Werthein, head of the Werthein Group, told this media outlet that “[Kuiper’s satellite Internet] will be a very large part of our revenue stream in the future.”

“Direct portability and rapid deployment will be key factors for Latin America,” Werthein added. “We are not going to disclose the price; we will do so when we reach the launch date to be more precise.”

However, the group stressed that the service will be priced in each country’s local currency, not in dollars, as is the case with Starlink. They will also provide local technical support in the language of the customer.

In this regard, they stressed that since they will be launching Kuiper in different countries, they will have “different models” for each and will do “whatever is necessary to ensure that the customer has the best product on the market.” “It will be a highly valued product and a success,” they added.

Unlike Starlink, which is currently sold through various e-commerce channels, Kuiper will initially be sold exclusively through the Sky and DirecTV brands.

“Right now, we have a special relationship and we will be marketing the product through Sky and DirecTV. Then we will see how the market develops and expands,” Werthein said.

As for the challenge of penetrating a segment of the South American population that has never had Internet access, the Argentine stressed: “We have to go through the jungle and mountains everywhere, and that is where we will have a great advantage. To reach all these 200 million people without connectivity is a huge task for both of us.

A Snapshot of Satellite Internet in South America Today

According to Amazon’s Kachroo, only “a few million” South Americans currently have satellite Internet services.

“Traditionally, geostationary satellite technologies have not provided a great customer experience and have been very expensive,” he said, noting that “the experience has not been comparable to terrestrial connectivity, so adoption has been quite low.”

For that reason, Amazon is in the process of building “this next-generation system that uses low-Earth orbit satellites.”

In the Project Kuiper constellation - 3,326 satellites will be launched over the next two years - the satellites fly very close to the Earth’s surface, enabling a low-latency broadband experience that looks and feels like terrestrial technology to the customer, the Seattle executive explained.

“Any application will load in real time, including video, for school, for business,” and at “an affordable price,” he added.

Kuiper’s Progress so Far and Vrio’s Investment

Kachroo emphasized that Project Kuiper “is a big project for Amazon, a very big infrastructure project. In this regard, he said that the company founded by Jeff Bezos has publicly announced an investment of $10 billion just to acquire the satellite launch capacity to form the constellation.

“So far, we have launched two proto-flight satellites... and had a very successful mission. We tested all the systems, the payload, the optical payload, the RF payload, the end-to-end network,” the executive said, adding: “Now we are going to decommission those two satellites ... and we have started building satellites on the ground. We will start deploying production satellites in the fourth quarter of 2024.”

“It’s a huge investment for the company to build this global network, because we want to serve customers everywhere. And then, of course, there will be these additional regional costs to set up services and sell them,” he concluded.

Werthein, for his part, also noted that marketing the service will require “a very large investment.”

“It’s very important to change the region to complement our current offering of TV, OTT and fiber. To have this system, this capacity, is a significant investment and change for our company in the future,” he concluded.

Vrio currently has 40 million customers in 11 countries in Latin America and the Caribbean.