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The direct-to-device satellite telecoms operator now has deals in place with two of the US’s three major wireless carriers
Last month, AST SpaceMobile agreed a new partnership with Verizon, promising to use its upcoming satellite network to deliver ubiquitous connectivity across the US. Now, weeks later, the company’s value continues to surge, with its share price rising 70% to its highest level since November 2022.
Verizon is planning to invest $100 million in AST SpaceMobile so that it can provide satellite-based cellular service directly to Verizon customers using 850 MHz spectrum. This, the company says, will help provide service to customers in some of the most rural parts of the country, many of which currently have poor or even nonexistent mobile services.
As per the agreement, $65 million of the investment will be commercial prepayments, and the remaining $35 million convertible notes.
AST SpaceMobile CEO Abel Avellan said the deal will “essentially eliminating dead zones and empowering remote areas of the country with space-based connectivity.”
“By entering into this agreement with AST, we will now be able to use our spectrum in conjunction with AST’s satellite network to provide essential connectivity in remote corners of the U.S. where cellular signals are unreachable through traditional land-based infrastructure,” said Srini Kalapala, SVP of Technology and Product Development at Verizon in a press release.
Headquartered in Texas, AST SpaceMobile currently has agreements with more than 45 mobile network operators globally who collectively serve over 2.8 billion subscribers.
One such operator is Verizon’s rival AT&T, whom AST SpaceMobile similarly. There were no financial details disclosed about the deal, which extends until 2030. The companies were previously working together under a Memorandum of Understanding.
AST SpaceMobile was founded in 2017, and in the first quarter of this year, made a net loss of $39.8 million due to expenses such engineering and development costs, which were much higher than their revenue of $500,000. The company is currently still in the investment phase, seeking investment in order to launch the 243 satellites planned for the full constellation.
The company’s first commercial satellite is expected to launch later this year, with roughly 100 needed to provide global coverage.
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