Anpanman - Spectrum Alchemy: Decoding AST SpaceMobile's 10x Performance Patent

[00:00:06] Speaker A: This is the AST SpaceMobile Podcast.
[00:00:09] Speaker B: It will just basically come to your phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Listen, the opportunity that we have is very, very, very large.
[00:00:27] Speaker A: Everyone, thanks for joining. I figured I'd fire up a space and talk about this patent that was filed over last week, which revealed quite a bit on Abel and the company's plans to optimize spectrum. And, you know, I'll first say that I'm not an RF expert, and a lot of this was, you know, due to being informed by Various, you know, AI models. But, you know, I think probably Katzi is better equipped to actually go through the nitty-gritty. But I think it's important at a high level, which is what I'm going to talk about, to understand what this means. And so, yeah, for those that didn't see, AST filed this patent, which I believe was filed last year, but then it was finally published this year. I don't know if that's due to confidentiality reasons, but this patent is really big, right? Because I think We've heard Abel for the first time in the 4th quarter earnings call talk about how through various techniques they would be able to get near-term 3x the performance. And that's 3x presumably off of what they were touting before, which is 120 megahertz— megabits per second speeds, which I think the underlying assumption is 40 megahertz of spectrum. So that's about 3 bits per hertz. of efficiency. And just to give people a sense for how that compares to terrestrial systems, I think terrestrial towers are somewhere around 7 to 9 bits per hertz in terms of efficiency. And traditional satellite performance typically is around 1 to 2 bits per hertz. And the reason why that is, is that you get terrestrial systems, you know, you've got buildings, trees, all these different things. And so there's various techniques, for example, terrestrial systems actually use, do dual polarization, but they do it in a physical sense. Like they have 2 antennas at 45-degree angles and one's putting out, I guess, vertical waves or vertical frequency and the other one's doing horizontal. Whereas what AST is doing with its very large aperture, which by the way, you can't do this stuff unless you have a very, very large phased array. But what AST is doing is doing that dynamically. So it is able to transmit essentially 2 channels on the same frequency to your phone. And the reason why that's important is that your phone, when you're walking around, it can be oriented in different ways. And so the direction of the antenna changes. So, but for the large phased array, by doing this on a— for threshold systems, they do it constantly for each of the antennas, whereas what AST is doing, they're going to be—
[00:03:13] Speaker B: Yeah.
[00:03:13] Speaker A: Sending you signals in a burst manner in both directions, right? And so by doing this, they're effectively able to double the highway lanes that they're able to communicate to the phone, which is pretty extraordinary. It's something that Abel talked about back in 2017, 2018 in one of the articles. He talked about MIMO and other optimization techniques, but now we're actually seeing these things come out. And so it's pretty damn impressive. I think with this polarization transparent switching and better scheduling, I think that's where you're able to make better use of the satellite aperture and spectrum to, you know, unmodified phones. And so that's probably where the 3x claim comes from. And then what Abel talked about with the AST5000 chip and utilizing AI, And I'm reading this directly from this chatbot, but the 10x longer-term claim is probably something related to AI allowing you to dynamically optimize polarization, beams, time/frequency resources, power, MTS, and interference across the constellation. And then with the same megahertz, the satellites can carry much more traffic, far more traffic, right? And so I think this is where, I remember in one of the conversations talking to the company, they were talking about how, for example, 3GPP is inefficient and there's various ways you can optimize it to extract more performance. And so yeah, that's really exciting. I think just looking at You know, the way to stack this performance, at least this is how AI thinks about it. You know, polarization mismatch recovery, that could be a 1.5 to 3 times improvement, better MCS and higher signal-to-noise ratio, 1.5 to 3 times, better user grouping and scheduling, 1.2 to 2 times, more aggressive frequency reuse, 2 to 4 times, better beamforming and power optimization, 1.2 to 2 times. And then ASIC software and RAN maturity, that can be 1.5 to 3 times of efficiency. So there's a lot to unpack here in terms of unpack, meaning improvements over time, right? And so I think it's important for, in any of these programs where, for example, you know, let's take SpaceX and Falcon 9 when it first launched, you know, they had the first iteration of engines and, you know, things were not fully optimized, but over time that vehicle became way cheaper and had higher performance as they made incremental improvements. And so with AST, we're already seeing that happen where the company, you know, Abel talked about this at Bluebird 7 launch in the morning. He, for the first time, disclosed that they were able to get over 160 megabits per second performance. And so that's a big improvement over 120. And so I think you're going to see these incremental step functions. And why this is important is that As Katya has discussed in the past, spectrum will always find its way to the most efficient use, right? And so where a lot of, a decent amount of spectrum, well, first of all, the fallow spectrum that's not lit up in dead zones, that's going to find its most efficient, you know, find its way to the most efficient use, which is AST SpaceMobile Bluebirds. And perhaps over time you'll see AT&T and Verizon actually dedicate low-band spectrum fully to satellite service, or they might allocate more unused spectrum in these dead zones to this service, right? So after they see that it's working and consumers are enjoying the experience, you might say, okay, well, let's free up more 800 and 700 megahertz in those dead zone areas to AST. Why not, right? We're going to We're going to leverage that spectrum and put it to use because otherwise it's not being used. But then, you know, the next logical step would be perhaps we should just free up an entire band globally, widen that out, maybe 5 by 5, 10 by, or not globally, sorry, within a region. So 5 by 5, 10 by 10. And that could serve as an additional capacity layer, right?
[00:07:42] Speaker B: Yeah.
[00:07:43] Speaker A: And so that could be in the cards too for low-band spectrum. However, moving over to mid-band spectrum for Legato, this makes that spectrum way more valuable, which is obviously the spectrum that the company owns, right, for the next 80 years. And so if they're able to extract additional performance out of that spectrum, how much is it worth? Like if you were valuing it at $15 to $20 billion today, And that's value, meaning, you know, it's, it's, it's going to be properly deployed, which by the way, like we talk about this idea of spectrum alchemy. For the longest time, that L-band spectrum was contested because GPS, the military, they did not want it used for terrestrial purposes. Meaning back in the day, LightSquared was going to put up a bunch of terrestrial towers, run it at pretty high power, and then Provide fixed wireless service. That was the original intent. So they were going to, similar to what Clearwire was trying to do in the 2.4, or sorry, 2.4, 2.6 gigahertz spectrum, which Clearwire, that was a big high CapEx project that Intel and a bunch of other tech companies backed because they were going to change wireless internet and provide fixed wireless to your home. That failed and then ultimately it was bought by Sprint and then Sprint was rolled into T-Mobile. But LightSquared had a similar vision, right? Over many years, they tried to roll out terrestrial service and they got a massive pushback from the GPS Alliance, Wi-Fi, Department of Defense. But then they ultimately did get FCC approval for terrestrial use. However, They just couldn't get there in terms of funding and getting a proper business plan in place. But that was also, that potential interference concern was always there and was a big shadow over the project. Whereas now under AST's control, given that we have these large aperture satellites that can beam down very specific service without interfering in adjacent spectrum, we've unlocked the value of this spectrum and we're using for its original intent, which is from satellite to user device, not terrestrial towers to user devices, right? And so we've, you know, it's funny enough because like there's detractors like from Viasat and obviously Viasat's After this deal happening between Legato and AST and Viasat agreeing, hey, we'll help you out. And then realizing the strategic mistake they did, they made, you know, they've tried to put a wrench into things and then they've got slapped down by the judge. But it's funny because there's only one player that can actually utilize this spectrum properly. It's AST. It's not Viasat. It's not Starlink. It's not any number of players because they just don't have the technology. Right.
[00:10:46] Speaker B: Right.
[00:10:47] Speaker A: For example, you know, Katzie pointed out astutely that Starlink uses circular polarization, which is not the same as what we're doing. And so they can't derive the same efficiency benefits, but also, you know, they have smaller phased arrays. They don't have the same technology that we do. They're trying to get there for V2, but they don't have the ability to put down very precise cell beams. They don't have beamforming. They don't have, you know, that's a regenerative architecture. And so until they're able to get to the next satellite, they're not going to have the same level of performance. On top of that, for Starlink to truly work, they need a contiguous band of spectrum. They can't actually put down specific cells like we can, right? And so that's why T-Mobile had to give them an entire block of of PCSG block spectrum, 5x5, in order for the service to work. And even then, as we've heard from Starlink's, the former head of growth, the product is shitty, right? And so you've got to wait for the next generation. And will they get there? Who knows, right? But what was interesting in my research over the weekend is that what we're doing specifically is enabled by having a very massive phased array. Because in order to efficiently try to pull this off, you actually need very, you need many antenna elements in a large phased array in order to provide this level of efficiency. And what we learned, by the way, over the weekend, or sorry, not over the weekend, but at launch, this wasn't one of my direct conversations, but it was a conversation that someone else had sitting next to one of the folks at AST SpaceMobile. And I unfortunately—
[00:12:31] Speaker B: Yeah.
[00:12:32] Speaker A: Uh, in the bus ride there and bus ride back, I did not get to sit next to anyone from AST, but, uh, I heard a number of nuggets from people who did. But, um, I mean, no surprise, like there, there is a plan to even make a, to make a larger phased array. So if you guys will recall, the original plan was to do a 30-meter by 30-meter phased array. And then of course, uh, the Block 1 Bluebirds were, um, Was it 8 by 8 meters? And then this, the Block 2 Bluebirds are 15 by 15 meters, but eventually you're probably going to see that get to 20 to 25, right? Because you gain performance and efficiency by putting a larger phased array out there. And so while competitors are trying to get to, you know, for Starlink V2, they're trying to go from 2.5 to 2.5 by 2.5 meters, which is the current V1. They're going to try to get to 5 by 5 for V2, whereas we're at 15 by 15. And the party doesn't stop there. Like, we're probably going to go to 20 by 20 or 25 by 25. And so the design of, you know, block 3, well, it's probably not going to be block 3. Block 3 will probably utilize the same parameters in terms of size, but I'm sure Block 4 is going to be bigger. And that's the plan. Or perhaps there could be some designs where they start grouping satellites, where they actually orbit them as a group and utilize a grouped phase array to do more efficient beamforming and data transmit. So, but yeah, this, I think it's important to point this out because like, When thinking about spectrum and its use, you've got a number of legacy players who say, hey, we're going to provide direct-to-device service. We're going to go to our favorite prime contractor and do buy purchase order, try to get a satellite constellation up, which is fine. Like you can put something up that is maybe narrowband, you know, something IoT-based, but in order to do full broadband, you're going to have to innovate yourself, right? And you have to bring that in-house. And so I think Like I have confidence in Starlink eventually getting to something that's pretty decent, but that's going to take time. And likewise for Amazon, who, you know, they're just getting into the game and they're leveraging. So for the next 4 years, they're going to use Globalstar's current constellation with 17 more, you know, Replander satellites. And then they're eventually going to move on to MDA Space, which is been building the Aurora satellite. And, you know, they're trying to launch, I think, 50 of those within the next few years. And then eventually they're going to come out with their own satellite, right? And so maybe that's like 2030, 2031. But yeah, that will be their first iteration. And then we will have been on our, I don't know, like 4th generation by then. And so I think at that point, if AST is able to lock up a vast majority of the 50 MNOs it's working with and it's delivering service, and as we've discussed in the past, our service is fully integrated with the network core, which is great in terms of MNOs being able to offer various options of user level and service. Which is great for them, but it also on the flip side locks us in, you know, makes us an integral part of the service offering. So it's really hard to, I guess, rip and replace. And so you have this like mutual dependence on one another that's going to be a really tough nut to crack, right? And so when thinking about this service level too, it's like, okay, well, If Amazon is able to build a phased array that's, I don't know, 5 by 5, and they take a cue from some of the things we're doing, which by the way, like if they want to fully upgrade that constellation, at some point they're going to have to just turn off Globalstar, the old existing constellation, and also Aurora. Because like, if you're going to start with a clean sheet, you're going to have to kind of throw everything out that was done before. Right. And so maybe they'll just deorbit all those satellites. But that's going to take time and there's going to be trial and error, just like we are seeing firsthand in terms of production, which Amazon LEO, the fixed wireless satellite constellation, I mean, that was many years in the making and now they have finally got through to a point where they're launching or they're getting up to production cadence to launch more regularly. And so they'll have to go through those same pain processes, right? But obviously they've got experience in building satellites and that's going to help them to a degree. But you can look at Starlink as a prime example of a provider that has a tremendous amount of experience building a fixed wireless system, a system that is beaming down high-speed data to fixed dishes that sit atop your house or maybe on top of your RV. That's a very different proposition than beaming down broadband to, importantly for us, an unmodified phone, but in Starlink's case, a phone that is modified that requires a certain type of chip in order to receive that service, right? Because there's some optimization techniques that they require on the phone side in order to see the Starlink satellites and predict where they're going to be in order to provide better service, which again is Starlink. Former employees have said is, is just, is at a shitty level right now. So, but, you know, one of the important things about going back to this whole idea of implementing additional performance from the spectrum that you have is that that's going to give you an accelerating technology mode, right? Meaning if indeed, and this is what Starlink said, that it said, hey, we're going to try to target 150 megabits per second for V2. Where will we be at that time if we're able to get a 3x in performance and we have MIMO where there's multiple satellites that are serving the same cell? Previously, Vell talked about like 750 megabits per second. This is like many years ago, but does that get to 1 gigabit, 1 gig, or does it go to 1.5 gigs? And this is everyone within a cell sharing the same performance, but But obviously once you start getting to those numbers, then you can have a lot of simultaneous users. Now, obviously, like, as most people know from mobile phones, it's not as if you're streaming something constantly on your phone, even when you're in urban environments or, you know, maybe you're watching a game or something, but even then, like, that's not high definition. That's typically standard definition to your phone. But in areas where there's not as many people using it, You know, it's not as if someone's downloading a large application. You're typically using, you know, for browsing, uploading photos from time to time, downloading photos, looking at some videos. But, you know, it's really to like stay connected with loved ones. And so just like your regular, you know, for cell phone usage, I think sometimes people have this idea that everybody's going to be watching Netflix at the same time. But if you look at terrestrial towers, like You probably are serving, you know, hundreds or thousands of customers and at only at any given time, maybe a small fraction of those customers are actually accessing network because people are, for example, leveraging Wi-Fi, right? I mean, like when talking about usage for your own wireless service, you pay, I mean, I pay like $100 a month for each my wife and my phone because we have unlimited plans, but We probably only use them like 5 to 10% of the time outside. Most of the time we're connected to Wi-Fi. And so people are, you know, when thinking about pricing, it's like, and you know, you have pushback of people saying, well, this service, the pricing is too high. We actually already pay really high prices for what is essentially insurance, right? Which is the time that you're out, that you're not connected to Wi-Fi. You're paying a really huge premium to have that connectivity. And so what is an additional 5% on your bill or 10% of your bill to have 100% connectivity all the time? But going back to my original point, which is the fact that you're able to extract more performance per megahertz of spectrum, you know, in like space applications, satellites typically get like 1 to 2 bits per hertz. We're currently at 3 to 4 bits. The most efficient terrestrial systems are somewhere between 7 to 9 bits per hertz. Yeah, if we start pushing that, then you start getting into this realm of like offering almost, if you have enough satellites up, offering a comparable level of service as terrestrial. And that becomes really interesting when you're looking at mid-band spectrum because then AST has nationwide coverage. 45 megahertz in the US and Canada. And so that's really powerful, right? Because then the carriers can start doing offload traffic to you and pay you for that. Like there's additional money there. It's not just about per subscriber usage, but it's also like, I'm going to pay you, you're going to become a wholesale capacity provider and I'm going to offload traffic to you. Like that's super powerful. And that's not built into the model that people are talking about. The other thing is, how does that spectrum's value improve? Because there's 2 values for spectrum. One is if you actually buy it and if you buy it in an auction or you acquire a company, there's a base value that you pay for spectrum, which could be 70 cents, 80, 90 cents. Sometimes for high premium spectrum, it could be $2. what we call per megahertz pop. And so that the math there is if you assume in the US, like 340 million users in the US, and then you multiply that by the spectrum, that's how you get to, and then you do, you know, that's how you get to this value of per megahertz pop. So when people talk about like 10 cents per megahertz pop, you know, that equates to, if you were looking at 100 megahertz of spectrum, that would be $3.4 billion, right? And so in the instance where, and I went through this math yesterday just as an example, right? Like, so if AST is able to extract an additional, I don't know, like, and this is conservative, right? Like if they are able to take 50, and I use 50 because it's a round number, but if they're able to take 50 megahertz of spectrum and make it into effectively for satellite use, like 150 megahertz of spectrum. So an additional uplift of 100 megahertz of capacity, right? Through these efficiency improvements. And this is a 3x. We're not talking about 10x, but 3x. Um, if you apply like, let's say 40 cents to that across just the US market, like that is worth $13.6 billion. Right. And so we talk about this idea of Legato spectrum value being part of, you know, your sum of the parts analysis where, uh, you know, depending on what your assumptions are, it could be worth $15 billion. It could be worth $20 billion. And then with these efficiency improvements over time at 3x, let's just say 3x and 40 cents per pop, that's like $13.6 billion of additional value, right? Because people need to understand like spectrum is the lifeblood of the wireless industry. It's finite. There's only so much of it, which is why the FCC is like trying to go back to legacy applications. And we did this with terrestrial TV, by the way, like we cleared out all these old TV stations to free up I think it was like 600 megahertz spectrum. And then the FCC went up and auctioned that spectrum, which T-Mobile bought a decent amount because T-Mobile once upon a time had no low-band spectrum. So their service offering was really crappy. It was shitty. For anyone who used T-Mobile back in the '90s, like you couldn't go into a building and get service because it was all mid-band spectrum. They had no low-band spectrum. And so If you were in a building, you lost service. If you like started walking down into the subway, you lost service. It was horrendous. Like even in rural areas, the service was bad because they only had mid-band spectrum. And for them, they had, T-Mobile had to build out a ton of towers in order to provide coverage. And that was an impossible thing to do because it was very expensive. However, because, you know, after they merged with Sprint and they had more money, they were able to go buy 600 MHz spectrum in auction, and that really improved their network. And this is why AST SpaceMobile shareholders keep harping on the fact that all of these MSS solutions or mid-band spectrum solutions, like what Starlink is a case point example where they're running on 1.9 GHz or Globalstar is at 2.4 GHz, like the, you know, they don't, They don't have that much spectrum to begin with. They're also utilizing very small aperture satellites. And so those, those services are crappy, right? Like they don't, they don't have, first of all, they will never have good coverage or propagation. And then on top of that, the data, the data that they're delivering, the speeds are very slow and there's packet losses. I mean, there's like a whole host of issues, right? But, um, but if you're able to build like this layered cake where you have, uh, access to low band spectrum and you utilize it, which is the fundamental part of AST's service is having, you know, making sure that you are connected at all times in dead zones, in areas that are on the edge between threshold, the threshold network and a dead zone. You're going to have coverage, right? And that's why Verizon and AT&T for the longest time took a majority of subscribers in the US market because they had a lock on low-band spectrum, which is why— Verizon, you know, can you hear me now? That whole campaign was so effective because Verizon had the best coverage. And yeah, it may, it from in certain areas, it didn't have the best speed, but it didn't matter, right? Like coverage is always going to trump speed. Like in an area where there's no connectivity, no one cares about speed because like, if you're not connected, then what's the point of even worrying about speed? you have to have the ability to connect to a network and call someone or send messages or, you know, send images. Or if you're, you know, for me, someone who's always closely monitoring the market, and if I'm out on vacation, like I need connectivity. Like if I'm on the beach or I'm camping or skiing, you know, my wife bought these like two-way radios for us so we could stay connected to the kids. And it's been a godsend because we, now the kids are at their age where they can like go off on their own with their friends. But if I had mobile coverage, then we wouldn't need these walkie-talkies, right? Like, and we could talk to them on their watches, but that's not the case. And imagine like all these ski resorts who have invested in connectivity, like Wi-Fi or whatever, like you don't need that anymore. It's, people are just gonna be covered by their cell, you know, cell plans. And so the key thing for AST is like the entire service is built upon low-band spectrum, right? And so that is a fundamental differentiator that no one else has and no one will have, right? I mean, unless Starlink comes out tomorrow and says, hey, you know, these AST guys who invented the market, they were right again. We, first of all, previously our small phased arrays, they're too small. We need to go big. And also we need to go even bigger because we, you know, in order to address low-band spectrum, We need to build a much bigger satellite. And in the future, because Starlink has played its hand and made it known that eventually they want to compete with MNOs, like no one's going to give them that low band spectrum. Like who in their right mind would do that? Who is going to enable your biggest direct threat by saying, oh yeah, here you can lease some of our low band spectrum or we'll enter a partnership with you. That would be strategically You know, suicidal, like a pretty dumb mistake. But you know, you have some bears that say, well, AST, they they made a tactical mistake by partnering with the MNOs. That makes like absolutely no sense because the MNOs own the customer. They already have it now. They own all the low band spectrum. They're not they're not ever going to give that up. And if instead of having antagonistic and competitive relationship, like we're going to work with them, right? We're going to make their service better. And we're going to share in the ups with them. And so what better model is there? They invested in that spectrum, which is worth multiples what they ever paid. And there's no way like we would ever be able to buy that spectrum, nor would Starlink. If Starlink, by the way, wanted to get into the carrier business, they would actually have to go out and buy T-Mobile, which I guess when they go public, that's possible. But once they do that, then other carriers around the world will be like, oh, these guys are, they're coming to eat our lunch. And so I'm not going to let them get a foothold in Europe or wherever it is. Right. And the day that SpaceX buys T-Mobile, that's where Verizon and AT&T are like, okay, I guess, I guess, you know, we're going to fully, more fully integrate with AST. They become an even more critical partner. And then everybody else too, like Google, Amazon, everybody is like, okay, we need to work with AST because This, these guys are vertically integrated and, and we've become a much bigger competitive and existential threat. Excuse me. But going back to this whole spectrum alchemy thing again, I think it's important that because of our enabling technology, not only do we, are we the only partner that makes Legato possible to get through these interference concerns, but then globally, if you think about I think Viasat has talked about wanting to deploy the ex-US L-band spectrum for a direct-to-device service, and they're going to capitalize it with 2 other partners for $1 billion. As we all know, that's not nearly enough money. And if you're going to do that through a prime contractor, good luck. There's going to be a lot of inefficiency and heartache to actually get a constellation up. But AST is the best equipped to do that. And so in my mind, because we have the most profitable part of L-band, which is North America, and it's going to be hard for them to put up an economic constellation eventually, I think Viasat will work something out with AST where we get the rest of L-band globally, which I think like, well, first of all, if you look at the contracts that the 2 companies, the or that AST entered into with Legato, which Viasat supposedly had supported and then they backed away. We have an ability to go pursue L-band globally. Like they can't hinder us. And that's been part of the legal dispute for quite some time, which funny enough, when Viasat found out, well, let me take a step back. So when we entered into this deal with Legato, we paid Legato money and Legato is also, they own some portion of the L-band and then they're also leasing Part of the L-band to make it contiguous and more robust from Viasat. And so they owed Viasat a lot of money. And because they were in bankruptcy, there was, you know, Viasat was hoping they were like rubbing their hands together. I hope these guys go bankrupt and then we're able to buy their spectrum out of bankruptcy. But then AST came in and said, hey, we've got, we want to enter into this long-term agreement. We're going to give you a percentage of the revenues from the ongoing business. And then for the US, And then we will pay you $420 million, right? Which is just enough to pay ViaSat what they were owed. And so for those that are, that don't know, like ViaSat was trading at $10 and because AST came in and got them their money, you know, ViaSat was overleveraged and people were like, what are they going to do with this business? Because ViaSat, by the way, their core business of providing high-speed internet to airlines is getting their lunch eaten. By Starlink, right? And so now Viasat owes it, you know, they, they— it's funny because they're— if it wasn't for AST's existence of creating this market and paying them money directly, Viasat would probably be bankrupt or heading to bankruptcy. However, the stock is completely rerated because people are like, oh, there, there's this like new direct-to-device market. And the speculation is that Viasat is worth more dead than alive, like their spectrum The spectrum rights that they have globally for L-band are worth a lot, right? And so the idea, if you're a ViaSat shareholder, is that you're hoping that this management does not spend money to put up a direct-to-device constellation, that they enter into a leasing agreement where they share some upside with AST, or they sell spectrum to AST, or the dreamers are like, maybe AST will buy them or merge with them, which I think is a silly idea. I don't think it's going to happen. But it's funny because you have some of these detractors like this guy, this satellite consultant, Stewart Taylor, who by the way, like just for those that don't know, this guy's like an independent consultant. And I put that in quotes because he had been working with ViaSat, I think 3 years ago and thought that ViaSat was going to create this unbelievable direct-to-device service, which it's a legacy satellite company. Like, they have no— they, they were poo-pooing this idea for many years, and then, and then all of a sudden they were going to pivot and become a big player in this. And then of course, you know, the stock went from like, I think it was the 30s or 40s, down to 10. And then once AST entered into that transaction and highlighted the value of L-band spectrum, um, that's when ViaSat took off and re-rated. But this guy, um, he started— he owns ViaSat shares, he was down big, and then I Once Viasat became litigious with AST and tried to get out of the deal, that's when he started posting all this FUD. So that's his background. Like, he, I guess on LinkedIn, some people found these messages, I mean, these posts from 3 years ago where he talks about how, you know, he's invested in Viasat and he knows Mark Dankberg personally. So clearly he's, you know, this is stuff before he would make posts that was an independent, unbiased consultant, and he was just commenting with all this fun about AST, whereas, oh, it's clear he's a, he's a BioSat shareholder. He knows Mark Dankberg closely. He's done work with the company before. So, so, uh, and then he became vocal about how negative he was on AST and that he wanted people to like, um, I guess he didn't want people to lose their money. This is like back last fall, and it happened to coincide with, uh, the time that BioSat became litigious. So, um, Anyway, that's that guy's background. So if he posts stuff, just know where he's coming from and his source. But yeah, for AST, I think, well, first of all, going back to the contract, we have the ability to go pursue L-band globally. What we have to do though is if we are able to get L-band in certain jurisdictions, then we have to make sure that we coordinate with ViaSat so we're not interfering with them. But beyond that, we're free to do that. And so that's very valuable because I think when you go to regulators or potential partners, if you're able to whip out like, hey, we can deliver a spectral efficiency of 5, 6, 7 bits per hertz for our system and deliver true high-speed broadband. And then you've got, you know, some other player that is going to develop a constellation in a few years' time and hopefully get it deployed and be competitive with AST and Starlink, that's not a very good alternative, right? And so it's going to help the company win additional spectrum globally. And so that's L-band. There's also 20 by 20 megahertz of S-band that's up for grabs, which was not part of the FCC order. Being able to go to regulators globally, like we're going to be able to go to Europe and say, hey, for Satellite Connect Europe, we are getting spectral efficiency where we're going to be able to deliver, I don't know, within the cell, like 200 megabits per second, 250 megabits per second. That's a game changer. And let's put Europe aside. Like, I think Europe's an attractive market, but I've become more I guess focused on the Middle Eastern market where we have a very significant partnership, the most in terms of financial commitment. I think it's probably the biggest partnership with Saudi Telecom and Saudi Telecom operates in a number of Gulf states. But if you can think about like, like Europe is pretty, you know, it's a pretty compared to the US or the Middle East, like it's more dense of a population. It's easier to cover terrestrially. But outside of that, of course, if you're laying on MSS spectrum and providing broadband, it doesn't matter about terrestrial tower coverage because this is going to be not only dead zone and of course emergency services, first responder network, but you can do what I was saying before. You can actually do offloading, like bringing additional capacity to MNOs in times of peak usage where the terrestrial network has too much traffic. Well, you can offload some of that satellite because again, it's like If you get 10 by 10 megahertz, it's a completely separate network that sits on top of a terrestrial network. But in the Middle East, here you have very large swaths of land and the population centers are very dense, but outside there's a ton of arid land, right? And so connectivity issues are much bigger in the Middle East. And of course, as we know, like the per capita of users in the Middle East is really high, right? Like imagine who are the target customers in Saudi Arabia for Saudi Telecom? $15, $20 a month is probably, it's not even crumbs under your couch. Like it's not even a thing that you think about. Like that for most of the populace, connectivity is important and having a high-end plan where they can be connected on their yacht, out in the Gulf, probably not in the Strait of Hormuz, but somewhere else in the Gulf, or if they're out in the— I candidly, I've never been to the Middle East, but I can imagine the topography and where the urban centers are and then the distance between those. But coverage is probably super important, right? And so I think the Middle East quite candidly is, it could be a much more lucrative market, especially relative to how many users are served there and how much, how little capacity you actually have to allocate to the Middle East versus what the dollars that it brings in. But the use cases are going to be huge and we have the most key player there, right? And so I think when taking into account our spectral efficiency, like this, there's a big case to be made where you won't need terrestrial towers and building out those towers in much of the Middle East because you're just going to lay down satellite coverage, And it's going to be way more efficient, especially for that use case. And this goes also to whether it's like Africa, some of these other areas where you have a large landmass and the population centers are very dense, but to get the incremental coverage for a majority of the geography, it's just way too expensive terrestrially. So Latin America, parts of Asia, You know, it's going to be much more efficient, right? And so I think, yeah, this going back to spectral efficiency and this patent, and this is just one patent out of, you know, 3,800 patents and patent pending claims. Now, obviously some of those are overlapping, but I'm curious to see like what else is there, right? So we just get these like little nuggets. of what the company's doing and in conversations with management or earnings calls, you get like little hints of, you get to see like the edges and the corners of what's going on, but you don't really get to see the full picture. And so, you know, when Abel made the claim of getting additional efficiency where capacity could be increased from near-term 3 times to longer-term 10 times, yeah, that's a very staggering statement. Uh, it's, it's something that, um, I think shows the competitive, you know, lead that the company has, where we've been thinking about these issues for many years within the context of 3GPP and, and, uh, broadband mobile devices. Um, whereas all these competitors are now deciding, oh, we want it, we want to get into the business. Um, and they don't have, they don't have the experience or, or the development cycles that we have had. And so AST for its existence has not been litigious. Ultimately, how those 3,800 patents are used from a business perspective is to be seen. There's multiple ways that could be used. One would be if you wanted to use it as an offensive weapon and stop people from innovating around utilizing your technology or something similar and innovating. To compete against you, you could do that. Or you could do things cooperatively. You could actually go out and just like a lot of memory companies, for example, you could go license the technology and help enable at least some of the fundamental patents to let some of your competitors or, I don't know, partners utilize those. And then you collect royalties or licensing fees. And so I think, you know, there's this idea when you talk to some institutional investors that AST has what they're building, this large patent business where, for example, we've discussed AI data centers, but microns, the heat dissipation technology, the ability to put up a large solar array and run power and offset, you know, release that power into space. Those patents are really valuable, right? And so for all these companies that are pursuing, whether, you know, I just read over the weekend that StarCloud, this like AI data center company that raised a billion dollar valuation, maybe it was like a month or two ago due to the hype. Now they're raising at a $2 billion valuation. Like all these companies that are pursuing this area, they're going to run into some of our patents. And so I, again, I'm not sure how the company plans to monetize those. Like if, and if they're planning to monetize them, you know, they may pursue them, they may utilize them as roadblocks, right? And seek damages and do whatever, or they might, for folks who are not competing directly with us, they might enter into partnerships and drive some financial benefit through, again, royalties or licensing streams. So, but yeah, I think this past week, you know, as the stock languishes and the space sector opened weakly in a weak fashion, and I guess things are rebounding to a degree, we're going to learn quite a bit. And I know folks have put together some good questions for management, but I think one important question is to ask about this particular patent and perhaps additional patents. Like, how do you About how do you plan on getting 3x efficiency up and then getting up to 10x efficiency? Like that, that to me is an absolute game changer. It's something that you can we can all hem and haw about the the the the architecture of the satellite and the phase array and the microns and the processors. But the secret sauce is is getting Extracting these levels of improvement where you're going to leave guys like Starlink and eventually Amazon Globalstar, which maybe I should dedicate a whole podcast to talking about the issues that they've got to get through to provide at least narrowband data. But they're going to, by the time they get to a point where they're hitting performance levels of Block 1 satellites, we're going to be on Block 4. or Block 5, right? And so, and as Cook mentioned over the weekend, like, if you look at how Elon is compensated for the SpaceX IPO, it's going to be to get to deport a million people on Mars. And it's going to be for AI data centers. This is not going to be— this is going to be an important focus, but it's not going to be at the end of the day, like, if dollars have to be allocated and your smartest engineers have to be put towards certain projects. This is not going to be it, I don't think. But that said, like, it's because in order to sustain a $2 trillion valuation, like, you need to, you need the biggest fish to fry and you need the biggest dream for people, right? But as Cook mentioned, you know, even Amazon, their earnings call this past week was like, this is the market that we need to serve. We need to provide 100% connectivity to all our customers. And so that's why we bought Globalstar, because— and this is what they said, by the way— it's because their spectrum is really valuable. But they didn't say anything about the satellites because they don't have a satellite yet. Um, they didn't say anything about how they're going to deploy the service, but they, they've, they've done an important step, which is to buy spectrum. Uh, it's not, it's not a lot of spectrum, but it is spectrum, and all spectrum is valuable, right? And so, um, I think some people have speculated that Perhaps AST and Amazon could work together in the future. Absolutely, they could. Amazon, you know, if there was if there was a world where the carriers became comfortable with Amazon and said, "Hey, let's let's light up their spectrum with AST," and we'll that will be part of the the package to provide great broadband to our customers. Then there could be something there, right? But I don't think that's going to happen unless you know without the approval of the MNOs, right? Because at the end of the day, like they're our ultimate customer and they are our ultimate enabling partner, which, you know, the guys who don't understand this market will say that that's the Achilles heel of the company, but it's actually the biggest strength, right? And, and Katzy has talked about this before, which is being a cooperative and additive partner versus being antagonistic, which is what Starlink is. I mean, there's a reason why Deutsche Telekom CEO specifically says like, we know who Elon is. We know Starlink. You know, we, they're, they know that they're dancing with the tiger and they're not going to make strategic mistakes, which arguably they already made a strategic mistake, but I guess they're not going to let that mistake compound over time. But you know, they've already seeded the idea and they've blown Starlink Mobile into existence, right? By partner— by T-Mobile partnering with Starlink and getting the service off the ground, they can't put the genie back in the bottle. Like, it's out. It's out now. And so from a strategic perspective, that's something that they're going to have to deal with, right? Like, Starlink now knows where their customers are, where their pain points are, because when their customers roam on the Starlink network and they know exactly where where all the traffic is and what areas. And so it's like, hey, let's go sell Starlink fixed wireless to these people. And let's go, when we try to develop some type of competing service without low-band spectrum, but we're going to go target these areas first. And so you've, with this whole T satellite powered by Starlink, you've breathed into existence this idea that for a T-Mobile user and for anybody, Oh, Starlink is a competitor, and maybe I can just get mobile service from Starlink, which is it's pretty funny, right? Like it's it's going to be a Harvard business case study, I think, where they're going to show the dos and don'ts. And and Starlink mobile T-Mobile breathing it into existence is going to be one of the biggest strategic errors that Harvard is going to teach business school students, where these guys who are short-sighted, who wanted to get. like a lot of marketing hype and spin for a short-term, you know, or maybe a few quarters. They gave away, they breathed a competitor into existence and they became dependent on it and they got hollowed out. You know, who knows ultimately where that will be, but there is a potential avenue. Of course, you know, I've talked about where T-Mobile does end up joining with AST SpaceMobile and AT&T and Verizon. And that would be if they decide to point the gun to their own head and say, hey, if you guys don't let me in, I'm going to enable Starlink Mobile by letting them become an MVNO. And if I was T-Mobile and desperate, that's what I would do, right? Like if AST Space Mobile Service, once I see it taking off and I'm suffering in terms of customer churn, then I would point the gun to my head and say, I'm going to blow my brains out and I'm going to take you guys with me unless you let me in. And so I'll end the space there with that beautiful thought. But yeah, I think I'm sure perhaps maybe in the future I see Katzi out there, maybe we'll get him on and we'll talk more about some of the technical details. But yeah, this is a cool look into what AST is doing. And I think this is what really separates the company from the competitors, which is The ability to have a large phased array doing this on first principles where you build an initial service with low-band spectrum, you layer mid-band spectrum on top of it, and you extract additional capacity gains over time. And so that service improves and the user experience improves. And yeah, it's going to be hard for anyone to catch that, especially working with large MNOs who own the customer already. who will be paying for marketing, support, service, all that stuff while we focus on the technology and delivering the service. So I'll end it there. Thanks everyone for joining. As we— oh, before I end it, you know, we have the quarterly update next week based off of SpaceMop due diligence. I think, you know, there could be some rumblings around shipping at some point in the next week or two. Seems like things are going okay. are going well, actually. And, um, I did hint at this before, but there is some speculation that Blue Origin New Glenn is going to get off the ground. New Glenn 4 is going to launch sooner than we all expect. And so, um, so yeah, exciting times. And then of course, as we all know, the first 3 batches of Block 2 Bluebirds, um, are going to be on Falcon 9. And so, you know, probably looking at sometime, uh, at the earliest, a June launch, uh, June, July, and August over that time period. So I'm going to try to keep my calendar pretty flexible. I'm hoping to get down there again because I want to see our babies go up and looking forward to seeing people again. But yeah, let's run it back. Like we're going to this June, well, May batch launch and June batch shipment and then June launch. I really think, you know, the coil has been winding and we've been consolidating for for a really long period here. I think, um, we're going to be hitting new all-time highs in the coming weeks and months. So I'll end it there. Thanks everyone for joining, and we'll talk again soon. Take care.
[00:53:14] Speaker B: Thanks for listening to the AST SpaceMobile Podcast. If you enjoyed this episode and you'd like to help support the podcast, please share it with others, post about it on social media, or leave a rating and review. To catch all the latest news about AST SpaceMobile, make sure to subscribe. Thanks again, and I'll see you next time. We're doing something very, very big, and I think we need to know that we can really affect a billion lives. AST SpaceMobile is the only company that has proven technology to deliver cellular broadband connectivity directly from space to the everyday smartphone. People will just basically turn on their phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Our role is to bring this into reality, always in partnership with the MNOs.
[00:54:12] Speaker A: Listen.
[00:54:21] Speaker B: Waffles.