TAMPA, Fla. — AST SpaceMobile is spending $5 million more on its first commercial direct-to-smartphone satellites so SpaceX can launch them early next year to a different orbital inclination to improve coverage for a potential customer.
The Texas-based operator said Nov. 14 it now expects to spend a total $115 million on the first five BlueBird satellites, including manufacturing, launch and other costs, to deploy them at a 53-degree inclination in low Earth orbit (LEO).
This inclination is greater than originally planned and would expand initial coverage up to 59 degrees latitude for both northern and southern hemispheres, B. Riley analyst Mike Crawford said, notably into North America where AST SpaceMobile’s telco partner AT&T operates.
AT&T, one of AST SpaceMobile’s most vocal advocates, is helping the six-year-old constellation hopeful get the regulatory approval needed to connect mobile subscribers via satellites when they stray beyond the telco’s cell towers across the United States.
Crawford said AST SpaceMobile’s last-minute deployment change suggests the company is close to signing a definitive commercial agreement with AT&T.
AST SpaceMobile builds its satellites in-house, including the BlueWalker 3 prototype launched in September 2022 with a 64-square-meter antenna — the largest deployed commercially in LEO.
During AST SpaceMobile’s Nov. 14 earnings announcement, the company said the first batch of five fully funded BlueBirds are on track to launch on a Falcon 9 rocket in the first three months of 2024.
Five BlueBirds would be enough for intermittent connectivity services the venture says are suitable for government and commercial device monitoring applications.
While the BlueBirds in this first batch are the same size as BlueWalker 3 at around 1,500 kilograms each, the company is in talks to fund additional commercial satellites that would be 50% larger to improve performance.
Abel Avellan, AST SpaceMobile’s CEO, has also said around 90 BlueBirds are needed in LEO for its planned 5G broadband service, which ultimately includes voice and data capabilities.
Funding boost
Negotiations with multiple strategic investors are ongoing, Avellan said during the Nov. 14 earnings call, but the company should be able to provide more details about them before the end of this year.
After achieving download rates of around 14 megabits per second during 5G tests with a smartphone using BlueWalker 3 in September, he said AST SpaceMobile is now prioritizing completing the first BlueBird batch.
AST SpaceMobile announced Aug. 14 it had raised $115 million in debt to fully fund the first five BlueBirds, on top of the $64 million recently raised by selling shares.
The company started trading shares on Nasdaq in April 2021 after merging with New Providence Acquisition Corp, a shell company that earlier joined the stock exchange in search of an investment opportunity.
The merger raised around $417 million from investors; however, AST SpaceMobile has been quickly burning through cash reserves following manufacturing delays and cost overruns. The company reported $135.7 million in cash as of Sept. 30, following its additional fundraiser.
AST SpaceMobile said in a regulatory filing that 20 BlueBirds would be needed to cover the most commercially attractive mobile network operator markets, requiring the company to raise between $550 million and $650 million to roll them out.
More than 40 of the largest mobile network operators in the world have signed initial agreements to use the constellation, Avellan said, representing over two billion subscribers.
Virginia-based competitor Lynk Global says it has agreements with more than 30 mobile network operators.
With three much smaller commercial satellites already in LEO, about the size of a pizza box and geared toward lower bandwidth services such as text messaging and SOS alerts, Lynk has been able to start initial services with three of these telcos in parts of the Solomon Islands, Cook Islands, and Palau.
Like AST SpaceMobile, Lynk is also seeking regulatory permission to launch direct-to-smartphone services in the United States, where average revenue per user (ARPU) is much higher, but it has not yet announced a telco partner there.
SpaceX said last year it is teaming up with T-Mobile in the United States to deploy direct-to-smartphone services using upgraded broadband satellites in its sprawling Starlink broadband constellation.
