AST SpaceMobile, a company developing satellite-to-phone broadband, saw its shares surge after announcing a commercial partnership with Verizon following a recent agreement with AT&T to extend remote coverage across the United States.
AST SpaceMobile is building satellites designed to deliver broadband directly to unmodified smartphones, tapping into the growing direct-to-device market. Chairman and CEO Abel Avellan called the Verizon and AT&T agreements a major step toward eliminating dead zones and bringing space-based connectivity to remote areas.
The announcement drove AST SpaceMobile stock up 69% in a single trading session, closing at $9.02 per share. According to FactSet, this represented the company’s largest one-day gain since its 2021 SPAC listing, and shares have roughly quadrupled over the past month.
Under the Verizon agreement, Verizon will provide $100 million in capital to AST SpaceMobile, consisting of $65 million in commercial service prepayments and $35 million in convertible debt. Of the prepayments, $45 million are contingent on factors such as regulatory approvals and execution of a definitive commercial agreement.
This collaboration follows AST’s similar arrangements with AT&T. In January, AT&T joined Google and Vodafone in co-investing debt in AST. Company chief commercial officer Scott Wisniewski told reporters that a detailed commercial framework was recently finalized outlining how AST and its carrier partners will jointly offer service.
AT&T has worked with AST SpaceMobile for six years, including lobbying the FCC for approvals needed to offer direct-to-smartphone satellite services in the United States. Earlier this month the two companies finalized a revenue-sharing agreement that runs through 2030.
Wisniewski said AST will reveal go-to-market plans as the commercial launch approaches, and that the company expects to leverage combined benefits from pooling nearby terrestrial radio resources from partner carriers such as AT&T and Verizon.
Following earlier production setbacks, AST’s Block 1 satellites are slated for delivery to Cape Canaveral by late August for launch aboard a SpaceX Falcon 9 into low Earth orbit. Each Block 1 satellite is expected to offer roughly ten times the capacity of AST’s 1,500-kilogram BlueWalker-3 prototype, which demonstrated 14 Mbps download speeds on AT&T’s spectrum during September testing.
The first Block 2 BlueBird satellite—about twice the size of Block 1 and with ten times its capacity—has a launch window stretching from December through March. AST estimates that a constellation of 45 to 60 BlueBird satellites would be required to provide continuous coverage across the United States.
Last month AST received three non-binding letters of interest related to export credit agency financing to support deployment of up to 45 satellites by the end of 2026.
Although AST raised $417 million in its 2021 SPAC transaction, production delays and cost overruns have strained cash reserves. The company faces competition from other players pursuing direct-to-device services, including SpaceX’s Starlink and Lynk Global.
Industry executives see direct-to-device satellite connectivity as an opportunity to extend mobile communications beyond traditional terrestrial infrastructure. As Verizon executive Srini Kalapala described, the aim is to deliver space-based broadband directly to everyday cell phones.
Smartphone manufacturers, mobile carriers and satellite operators are increasingly partnering on direct-to-device initiatives. T-Mobile has collaborated with SpaceX’s Starlink on a rival approach, and Apple has invested in Globalstar-enabled satellite features such as Emergency SOS on the iPhone 14.
AST expects its first five commercial satellites to launch later this year. SpaceX, which serves more than three million Starlink subscribers, is also targeting rollout of T-Mobile-supported phone service integration within the year and has reported successful demonstrations of video calls to unmodified phones via satellite.
With major industry players competing for position, the direct-to-device satellite communications market is rapidly intensifying as companies race to deliver reliable connectivity to the most remote parts of the world.
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