AST SpaceMobile, a satellite-to-phones service provider, experienced a significant surge in its stock following the announcement of a partnership with Verizon. This partnership comes on the heels of a similar deal with AT&T, solidifying AST’s position in the direct-to-device (D2D) communications market.
The goal of AST SpaceMobile is to provide broadband service to unmodified smartphones using satellites. This innovative approach aims to address the issue of cellular dead zones and bring connectivity to remote areas of the country. The company’s chairman and CEO, Abel Avellan, expressed his excitement about these partnerships, stating that they will eliminate dead zones and empower underserved areas with space-based connectivity.
The market responded positively to this news, with AST stock jumping 69% in trading and closing at $9.02 a share. This surge marks the largest single-day rise for the company’s stock since its initial public offering via a SPAC in 2021. In fact, shares have quadrupled in value this month alone.
Verizon’s partnership with AST includes a $100 million raise for the company. This includes $65 million in commercial service prepayments and $35 million in debt through convertible notes. However, $45 million of the prepayments are subject to certain conditions, such as regulatory approvals and the signing of a definitive commercial agreement.
AT&T also welcomed AST’s partnership with Verizon, emphasizing their shared commitment to providing nationwide space-based broadband directly to everyday cell phones. This collaboration highlights the growing interest among major players in the D2D market. By expanding mobile communications to areas where traditional land-based infrastructure fails to reach, companies like AST and SpaceX’s Starlink are tapping into a significant opportunity.
SpaceX, with over 3 million Starlink customers, has already partnered with T-Mobile for its D2D service. Apple is also investing heavily in its Globalstar-supported “Emergency SOS with Satellite” service, which was recently rolled out with the release of the iPhone 14 models. These developments indicate a growing trend in the industry.
AST is planning to launch its first five commercial satellites later this year, while SpaceX aims to introduce its T-Mobile-supported phone service in the coming months. Elon Musk’s company recently made headlines by completing the “first video call” using its satellites connected to unmodified phones via social media.
In conclusion, AST SpaceMobile’s partnerships with Verizon and AT&T have propelled the company’s stock to new heights. These collaborations not only demonstrate the potential of the D2D market but also highlight the efforts of major players like SpaceX and Apple in expanding mobile communications to previously unreachable areas. As AST prepares to launch its commercial satellites, the future of space-based connectivity for smartphones looks promising.
