Using your cell phone to make calls globally via satellite? AST SpaceMobile makes it possible
- by Gold Invest
- Sep 19, 2024
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A challenge to Starlink and Amazon
Dropped calls in a dead zone or no reception on your cell phone because your own system doesn’t harmonize with that of the local provider? Almost every user knows experiences like these. AST SpaceMobil (NASDAQ: ASTS, WKN: A3CL8W) has set itself the goal of banishing these experiences from our everyday lives in the future by establishing a satellite-based connection system that is accessible and usable for everyone.
A new type of satellite telephony is therefore being planned that can not only be used by everyone everywhere, but can also be used with existing devices and does not require any complex technical upgrades. This eliminates the classic obstacles such as radio networks from other providers or technical hurdles that have to be overcome before the cell phone can ring again.
The commercial launch is taking place these days, as AST SpaceMobile launched the first five satellites into space in the first half of September. Like the satellites that will follow, they will be positioned in low earth orbit so that the network can be put into operation by the end of the year. AST SpaceMobile has brought about 45 partners on board to provide support, including AT&T, Bell Canada, Vodafone, Rakuten, Telefonica, Orange, American Tower, Verizon and Google, to name just a few from the long list.
AST SpaceMobile challenges Starlink and Amazon
As President Scott Wisniewski explained to Bloomberg in an interview, the Texan company wants to offer mobile operators worldwide satellite-to-smartphone services. This should enable roaming to terrestrial mobile networks without the need for special satellite phones. Initially, AST SpaceMobile will offer 4G services for partner networks. However, support for 5G is also planned for the future.
The key advantage of the new system is that, unlike Iridium, for example, users do not need a special end device, but can use their existing smartphone directly for mobile satellite communications. Both terrestrial and non-terrestrial networks are available with one end device, where standard LTE is used for technical reasons.
This year, AST SpaceMobile has secured further investment from AT&T, Verizon, Google and Vodafone, as well as a new contract from the US government as a prime contractor. This puts the company in competition with Elon Musk’s Starlink service as well as Amazon’s Kuiper network.
Even larger satellites are planned
The fact that the first five satellites, which are called Bluebirds at AST SpaceMobile, were launched into space using a SpaceX rocket makes it clear that Elon Musk cannot stop the competitor on his own, as AST SpaceMobile is independent in terms of launchers. The Bluebirds, which are to be launched into space in early 2025, may also be transported by another provider.
The plan for 2025 is to deploy at least a further 17 satellites in low-Earth orbit, depending on the capacity of the transportation providers. This will be followed by 30 Bluebirds in 2026 and a further 40 satellites in space in 2027. Once there, the Bluebirds will unfold and form antennas measuring around 65 square meters. Successor models that will be even larger are already being planned. The current satellites are so large that they can be recognized in the night sky and shine brighter than some stars.
The response is great and stock takes off
The launch of the first five satellites was broadcast live on the internet in September and watched live or as a recording by about 68,000 viewers. The company had previously launched the Bluewalker 3 satellite into space in September 2022, also using a Falcon 9 rocket from SpaceX. Since then, it has enabled 2G, 4G and 5G telephony and downloads with a data transmission rate of 14 Mbit/s per 5 MHz channel. AST SpaceMobile aims to achieve a data rate of up to 120 MBit/s with the new generation of satellites.
The potential is huge, because although mobile telephony has been common practice for years, only part of the earth’s surface is covered by mobile phone masts. Especially over the world’s oceans and in sparsely populated areas of the world, constantly available mobile phone and Internet connections are still the exception or an expensive luxury that not everyone can afford. The number of potential users is therefore only limited by the number of cell phone owners and is in the billions. AST Space Mobile aims to achieve 99% coverage in North America by 2026 and worldwide availability by the end of 2027.
The share price has risen rapidly this year, at times more reminiscent of a rocket launch than an “ordinary” price increase. At the beginning of May, the share was still trading below three US dollars. By mid-August, the share price had increased tenfold, reaching a high of USD 38.60 on August 16. Since then, the share price has corrected this rise again. The correction pattern can be seen as a bullish flag that does not yet appear to be fully completed.
However, as soon as a sustained rise above the short-term downward trend since mid-August is achieved, the next rocket stage could be ignited. In this case, the first target would be the August and all-time high of 38.60 US dollars. It is possible that the stock will not just stop here in the short term. New highs are more likely, it seems. Deutsche Bank analysts still see a lot of potential and recently raised their price target from USD 22 to USD 63.
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