SpaceMobile Constellation (AST & Science)

[Asteroza]

Some reflections on Supplemental Coverage from Space (SCS), inspired by the way AT&T talked up their (relatively small) investment in AST Spacemobile in that release. 

I've been mystified by the business case for SCS.  As a standalone play, cellular from orbit doesn't make sense. The cost of providing capacity is high, and anywhere there is a decent concentration of users on the ground, someone will put in a cell tower and steal your business. HOWEVER...

Nationwide providers like AT&T spend a lot of money to cover all of rural America.  If SCS works it means they could turn off many of those cell towers - all the costs of deploying and maintaining far-flung towers, electronics, backhaul.   They only have to put out base stations at places where there is positive ROI for that individual site. The savings is significant.  So although SCS is a financial lose by itself, it's very likely a big win if it's part of one of the big three providers.

There's also getting away from all the headaches of roaming agreements with the small operators, and land use agreements with a million different farmers.  The business simplification probably adds up to a lot as well.

From this perspective, I would expect to see a closer and closer alliance between individual SCS providers and individual operators.  The operators have outsourced the (extreme) financial and regulatory risk of creating this new capability by letting the startups get it going.  If coverage from orbit succeeds, the big operators then pony up the cash making the startup founders rich, and while they might not buy one of the startups they will be tightly joined at the hip with one of them. To the point that they can trust they have a long-term partnership enabling them to turn off the money losing cell sites.

Getting the aggregate rural demand to fund the constellation from multiple carriers is an interesting business standpoint (where no individual operator could afford a minimum constellation population).

If there's a deliberate rural tower divestment plan, this implies tower operators/leasers in rural areas are gonna have a bad day, as big 5G MNO ops could turn their attention to capitalizing urban areas with more mmWave and high bandwidth basestations since the capitalization requirements for 5G is frighteningly enormous.

Time to short standalone tower operators?

This also has implications for non-US MNO's who have trouble expanding their coverage in geographically diverse areas with poor backhaul too. Island archipelagos and vast land masses (africa, southeast asia) would be able to ride the coattails of this at western MNO expense.

[Danderman]

The smartphone to satellite business case is larger than you think.

For example, there are a lot of people who have cell coverage at work, but not near their home.

I got into the business while I lived in a place where I could see the cell tower  but I had no cell coverage.

[Tywin]

And with this you can use your phone in any country...

[edzieba]

And with this you can use your phone in any country...

That's an orthogonal problem.
Today you can take a GSM-standards-based mobile device and it can talk to the mobile network in pretty much any country... but you won't necessarily get service unless you have a service plan in that country. Likewise, if you move the cell mast from a few tens of metres above the surface to 100km above the surface, that does not change the need for a local service contract.

[Tywin]

Very important company coming insine...

https://twitter.com/ASTS_Investors/status/1752101210058846367

[Asteroza]

Very important company coming insine...

https://twitter.com/ASTS_Investors/status/1752101210058846367

Vulture PE homing in on you is not a good look...

[Tywin]

I don't undestand that phrase?

[Steven Pietrobon]

PE stands for Private Equity. Vulture PE's take over companies and strip them of their assets.

https://corporatefinanceinstitute.com/resources/wealth-management/vulture-capitalist/

[eeergo]

FWIW their stock has hit their all-time low yesterday ($2.70)

[Tywin]

FWIW their stock has hit their all-time low yesterday ($2.70)

They have make an Ampliation of Capital, is normal that the stock go down, but when they launch new Bluewalker, they will recovery...

[Danderman]

FWIW their stock has hit their all-time low yesterday ($2.70)

They have make an Ampliation of Capital, is normal that the stock go down, but when they launch new Bluewalker, they will recovery...

What is an ampilation of capital?

[Tywin]

New offer of new stocks to raise money with the investors...

[Tywin]

Great news...

https://www.businesswire.com/news/home/20240207651001/en

AST SpaceMobile Announces New Contract Award with United States Government Through Prime Contractor
February 08, 2024 08:00 AM Eastern Standard Time
MIDLAND, Texas--(BUSINESS WIRE)--AST SpaceMobile, Inc. (“AST SpaceMobile”) (NASDAQ: ASTS), the company building the first and only space-based cellular broadband network accessible directly by everyday smartphones, today announced a new contract award from a prime contractor working with the United States Government.

“We are thrilled to announce this initiative with the United States Government,” said Chris Ivory, Chief Commercial Officer and Head of Government Business of AST SpaceMobile. “We believe our patented technology, leveraging our large phased array antenna technology in space, creates opportunities for new mission-critical capabilities in the government sector. We are creating new robust and resilient communications solutions while also facilitating new use cases.”

AST SpaceMobile was awarded a revenue-generating contract to perform certain tasks on the company’s space-based network in low Earth orbit. This initial firm-fixed-priced contract, for an undisclosed amount, will be supported by the company’s BlueWalker 3 satellite in orbit today, as well as its next five commercial satellites. Revenue-generating contracts like this mark a significant milestone in AST SpaceMobile’s growth trajectory and highlight the versatile, dual-use capabilities of its technology.

[zubenelgenubi: It's a press release.  One can quote it in full.]

[FutureSpaceTourist]

https://twitter.com/thesheetztweetz/status/1795922007411872091

AST SpaceMobile $ASTS stock surges 69%, its best day ever, after Verizon partnership for satellite internet to phones:

https://www.cnbc.com/2024/05/29/ast-spacemobile-verizon-satellite-internet.html

AST SpaceMobile stock surges 69%, its best day ever, after Verizon satellite internet deal
PUBLISHED WED, MAY 29 20247:30 AM EDT
UPDATED MOMENTS AGO

Michael Sheetz
@IN/MICHAELJSHEETZ
@THESHEETZTWEETZ

KEY POINTS

Satellite-to-phones service provider AST SpaceMobile announced a partnership with Verizon on Wednesday, adding to the company’s recent deal with AT&T.

AST chairman and CEO Abel Avellan touted the agreements as “essentially eliminating dead zones and empowering remote areas of the country with space-based connectivity.”

Verizon’s deal effectively includes a $100 million raise for AST, as well, via prepayments and a debt investment.

[M.E.T.]

I’m still trying to figure out why AST is able to do high bandwidth direct to mobile services while Starlink cannot. The answer seems to be “their satellite is really big”. To which my reply is - well why doesn’t SpaceX make Starlink satellites just as big?

If the direct to mobile market is so large, why isn’t SpaceX targeting it in the same way AST is? There’s no question that they have the ability to do so if they chose.

And I’m not talking about a few Mb/s like Starlink is currently doing with T-mobile for emergency wilderness communications. I mean full Starlink internet like they currently do to the Starlink dishes, but direct to mobile.

What is AST’s secret sauce that is apparently not replicable by Starlink? I don’t get it.

[edzieba]

What is AST’s secret sauce that is apparently not replicable by Starlink? I don’t get it.

Having a really big antenna. No big mystery, just basic RF engineering.

Technical question answered, there's also the implicit economic question: why did SpaceMobile choose to concentrate on a large antenna for greater bandwidth, and SpaceX did not?
My guess would be that SpaceX have the additional constraint of existing Starlink bus dimensions (even growing from a bus-sized antenna to a fold-out array increases Z-height and reduces sats-per-launch) and power budgets, and see direct-to-cell as a 'bonus' revenue rather than the primary revenue stream, so can support it to some extent from existing revenue rather than the offering needing to be as attractive as possible in and of itself. SpaceMobile see direct-to-cell as their sole revenue stream, so have focussed all efforts towards maximising the value of that service.
In addition, 'direct to cell' is not one monolithic market. e.g. someone looking to roll out vehicle tracking to a worldwide fleet may only need a few bytes per minute of data but want maximum coverage (a great fit for Starlink) whereas someone wanting a mobile-ish backhaul with local network failover and reduced cost (all-GSM architecture so CotS) but with relatively limited geographic constraints and higher bandwidth demands (e.g. a roving reporter able to uplink a live video feed) would be an ideal fit for SpaceMobile as long as they are under the growing constellation's ground-track.

[M.E.T.]

What is AST’s secret sauce that is apparently not replicable by Starlink? I don’t get it.

Having a really big antenna. No big mystery, just basic RF engineering.

Technical question answered, there's also the implicit economic question: why did SpaceMobile choose to concentrate on a large antenna for greater bandwidth, and SpaceX did not?
My guess would be that SpaceX have the additional constraint of existing Starlink bus dimensions (even growing from a bus-sized antenna to a fold-out array increases Z-height and reduces sats-per-launch) and power budgets, and see direct-to-cell as a 'bonus' revenue rather than the primary revenue stream, so can support it to some extent from existing revenue rather than the offering needing to be as attractive as possible in and of itself. SpaceMobile see direct-to-cell as their sole revenue stream, so have focussed all efforts towards maximising the value of that service.
In addition, 'direct to cell' is not one monolithic market. e.g. someone looking to roll out vehicle tracking to a worldwide fleet may only need a few bytes per minute of data but want maximum coverage (a great fit for Starlink) whereas someone wanting a mobile-ish backhaul with local network failover and reduced cost (all-GSM architecture so CotS) but with relatively limited geographic constraints and higher bandwidth demands (e.g. a roving reporter able to uplink a live video feed) would be an ideal fit for SpaceMobile as long as they are under the growing constellation's ground-track.

That is not a clear answer to me. It can’t be a situation where AST has a hardware advantage (big antenna) which SpaceX somehow cannot replicate. Building 6000 sats with big antennas would be a bargain if it means you don’t need to build 30 million satellite dishes, and now every person with a mobile phone can become your customer.

If it was such an obvious move SpaceX would have thousands of massive antenna sats by now. No, it’s got to be some disadvantage of the AST approach which is a trade off that SpaceX calculated would not pay off as well as the current Starlink architecture. But what is that disadvantage? No one seems to have pointed out any, and all one hears is that AST can give anyone high bandwidth internet anywhere, without needing a dish.

I still don’t get it.

[edzieba]

It can’t be a situation where AST has a hardware advantage (big antenna) which SpaceX somehow cannot replicate.

Why do think they cannot replicate it? They have chosen not to, likely because they do not think the economic case makes sense for them. The economic case may close differently for other providers who do not already have a constellation of 6000+ satellites providing an existing service (i.e. literally everyone else).


If you start from the viewpoint of "SpaceX can do no wrong, everyone doing something different must be wrong" then you will fail to understand anyone other than SpaceX.

[M.E.T.]

It can’t be a situation where AST has a hardware advantage (big antenna) which SpaceX somehow cannot replicate.

Why do think they cannot replicate it? They have chosen not to, likely because they do not think the economic case makes sense for them. The economic case may close differently for other providers who do not already have a constellation of 6000+ satellites providing an existing service (i.e. literally everyone else).


If you start from the viewpoint of "SpaceX can do no wrong, everyone doing something different must be wrong" then you will fail to understand anyone other than SpaceX.

You misunderstand my question.

SpaceX had every option available to them BEFORE they launched their Tintin test satellite. They didn’t HAVE to go with the current 6000 sats that require millions of satellite dishes to work. They started with a blank slate.

I’m asking what was the perceived downside of AST’s approach that made SpaceX choose the current Starlink architecture. Because on the face of it having the ability to beam high bandwidth data to every person with a smartphone beats a system requiring a dish receiver hands down. It would appear to be a no brainer.

So, what ARE the benefits of the Starlink system over the AST system. Because if both architectures are feasible, I don’t see any superior value in the Starlink approach.

And I haven’t seen a clear answer to that question yet.

[TrevorMonty]

PE stands for Private Equity. Vulture PE's take over companies and strip them of their assets.

https://corporatefinanceinstitute.com/resources/wealth-management/vulture-capitalist/

Vulture PE aren't anything new. Brierley investments a New Zealand company specialized in this practice in 1980s before sharemarket crash. Buy business which was a going concern, close it up and sell all assets (mainly real estate). End result was lots of people out of work and a nice profit for Brierley and its shareholders.