Anpanman - UBS Fireside Chat, Ligado FCC Modification & Launch

[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.
[00:00:28] Speaker C: Ah, there we go. You guys hear me now? I had the mute button on my microphone. Okay, I think people can hear me. Just wait here for confirmation. Uh, I'm just gonna go ahead and start, but, um, thanks everyone for joining. Um, I wanted to talk about some recent developments. It's funny, I think Kook and I were talking about how his weekly is going to be insufficient because it seems like there's a week's worth of information that is getting disseminated daily. So it's, yeah, it's, it, I guess I'll be doing more of these Spaces possibly, but what an exciting time, man. So yesterday we had quite a bit of news. In particular, you know, Scott spoke at the UBS conference and there was a lot to say there. And I haven't, even though the, you know, the guy was sick, the guy's sick and he has a, it sounds like a pretty bad cold and sound pretty beat up. I haven't heard a more bullish time from him speaking, and I'll go through the various points that he went through. But yeah, there was quite a bit of chutzpah and, you know, I think confidence coming out of that UBS discussion. And so we can kind of go through some of those points, but yeah, I came away from that very positive about the next few weeks, few months, and upcoming year, quite frankly. And so yeah, even last night I was really tired, so I decided not to do a space, but I figured I'd do it this morning. But yeah, there's just a lot to cover there. And then yesterday we also got Legato's FCC modification application, and then we'll talk a bit about launch, but maybe Maybe since Scott's discussion was so long, maybe we'll talk about Legato first. So yesterday, as we had discussed before, the company filed with the FTC a modification application for Legato's spectrum licenses. And so there, what's interesting is that they are not going through a new round of processing. They're basically just saying, hey, look, we want to use Legato spectrum as is, and you know the the geo satellite that currently is using that that spectrum, we're going to keep it. I think that's Skyterra One, and then however we are we want to modify modify that license because, and this is kind of technical, but we're going to put Legato payloads called Skyterra Next, which I mean I think that's just kind of a legal label. It's actually going to be fully owned and operated. And of course, the underlying technology is going to be fully AST SpaceMobile. But to keep the license as is, you need to designate these new satellites. There needs to be some legato association. So they basically say, we're putting on Skyterra Next payloads on top of what is going to be the Block 3 Bluebirds, which are mid-band, spectrum-focused Bluebirds. And so in that application, they are basically going to the FCC and saying, we want to modify the license. We're going to actually put a payload on top of AST SpaceMobile Block 3 satellites, and we're going to operate our service as is. The reason why you would do this is that there's no There's no need to go for a new license or go through another processing round. The more elegant solution is to just do this modification. And what that means is if you go through a new processing round, that could take 1 to 2 years, whereas a modification of a license, an existing operating license, that's usually like a 3 to 6 month process, which is how the parties, Legato and AST SpaceMobile, have guided towards a first half 2026 FCC approval. And so it's just a more elegant way to basically get approval for AST to launch their satellites and then host this Skyterra Next payload. But all intents and purposes, they're just referring to Block 3 satellites. The way that that license works is, we are leasing the spectrum, but in all intents and purposes, Legato is the legal operator of the spectrum and they'll continue to be the owner, of course. However, because through our leasing agreement, we're obviously putting up the satellites and providing service and managing the constellation. So that was a big piece of news. As we had discussed before, we expected that license to drop after the comment period ended for AST SpaceMobile's US commercial application, SES application, once that comment period closed, which was December 5th, we expected to see Legato file that modification, which happened yesterday. And so there's 5 documents in there. There's been a few folks pointing out some of the content there and And maybe if I have time, I'll go through the narrative that was filed, which is quite interesting. But that's a pretty big milestone. This is a key step in the process for the company to activate and deploy mid-band spectrum, L-band spectrum, 40 megahertz here in the US and 45 in total, I believe, in Canada. And just to give you a comparison, Starlink slash SpaceX, they're buying EchoStar's AWS-4 and AWS-3 spectrum. The AWS-4 spectrum, that actually is going through an entirely, I believe, an entirely new processing round, which is why they don't expect that deal to close until late. Or yeah, I think they pointed to the fall of 2027. So it's going to take time. Um, and so that's a pretty long— that, that will be a very long process for them. Um, let's see, going back to— oh, uh, I guess the other topic before we dive into UBS, um, is launch. And so as people have seen, uh, it looks like the launch has been pushed back from December 15th, or no earlier, the way that people talk about these launch timeframes. Um, the say no earlier than a certain date, and of course it can happen on that date or sometime thereafter. The launch window got pushed back from December 15th to now December 20th, and there's a bit of speculation as to why that is. I believe there's some weather-related potential issues around that date, and so just to be cautious, they're moving the date back. And, you know, you don't ever— when you're about to put up a satellite and you're paying tens of millions of dollars for launch, you don't want anything to go wrong. So by delaying things a few days, not a big deal. However, what was confirmed in Scott Wisniewski's presentation yesterday is that they do expect BB-7 to launch shortly after. And so I would expect that we will probably see You know, the shipment news sometime this week or next week. I mean, it's unclear, but I do think that that satellite is ready. And as Cook and others have discussed, it sounds like that satellite, due to customer requirements, might be going up at a different, you know, different altitude and then, of course, inclination. And we've already I guess, you know, between a few folks have already speculated that, I think that new inclination in particular has uses that are going to be very relevant for the government. And so I think that's why we've seen some of the delay there. The other thing we're trying to figure out is, I think it is possible that it will be a SpaceX flight. However, as Scott alluded to yesterday on UBS, Now that we have this abundance of launch, just a reminder, and I'll talk about this more, the company is overbooked to launch. So even though we are looking to put up 45 to 60 satellites next year, I think they're overbooked for something north of 75 or perhaps higher. And so the company has put down You know, launch payments in order to give them flexibility and wants to make, they want to make sure that if a particular launch vehicle's not ready, that they can just go with another one. And so there is some building speculation that this FM-2, or what we call BV-7, it could be going on a Falcon 9, or alternatively, it might actually go on— the next Blue Origin launch, which, you know, New Glenn, which to me, that would be a pretty tremendous and crazy event to go up on the 3rd launch for a Blue Origin New Glenn would be amazing. I think the reason why there is some speculation around that is that Blue Origin is looking to send up New Glenn in January. However, the associated payload with that may not be ready. And so as Scott mentioned in the UBS call yesterday, it's oftentimes where launch may be ready, but the payload's not ready. And so at that point, you know, you'll have these launch providers having to scramble for, to basically find customers. And, you know, we talked about ULA last year where they pretty much had to send up an empty rocket. Because the customer that they were supposed to take up was not ready. And they, because of, you know, a government milestone that they had to meet, they had to send up the rocket regardless. And so if that's the case that Blue Origin, I believe they were taking up, someone will have to correct me if I'm wrong, but I think it was like a moon lander or something to that effect. They, that payload may not be ready. And so we might find ourselves, and this would be really cool, we might find ourselves down in the Cape floor in, you know, Cape Canaveral in Florida in January, seeing 2 new things, FM-2, and then of course that going on top of Blue Origin New Glenn, which would be a tremendous event. And so me personally, I'm kind of hoping for that to happen. But, you know, or again, it could just be a Falcon 9. So anyhow, we should find out in the next week or two or coming weeks. I mean, it's unclear, but yeah, that will be exciting. And then of course after that, the expectation is that you'll have 2 Falcon 9s take up 2 batches of— batches of 3 of Block 2 Bluebirds. But anyway, that's the quick update for launch. I think there, you know, we're looking at December 20th and perhaps maybe, you know, a day or two after that, but we'll see. Anyway, so going back to the UBS presentation from Scott, yeah, he, you know, even though he was sick, he actually went through quite a number of things and Kevin was actually so kind as to summarize them, but I was actually going to go through the transcript and this might take a bit more time, but I just wanted to highlight some of the things that he said and kind of go through why, at least for me, that was probably one of the most bullish public speaking times that I've ever seen the company. Give, and so yeah, why don't we just jump right into it? So let's see here. I'm going to go through the transcript. So the first thing that stood out to me was that in the opening, Scott talked about the fact that they've gotten manufacturing their manufacturing plan almost up to rate. And so what that means is you know the company is targeting or had targeted getting up to building six Bluebird satellites by the end of the year in terms of. production capacity. And we know the gating item there is the control set because they're already at 6 microns worth of production. And I think they hit that sometime, I think it was the end of October or sometime in November. So it sounds like they're pretty close to reaching that goal. And I believe, although I'm not sure, I think if the When and if that the company does hit that goal, I think that will be disclosed. I don't know if it's going to be like in the Q1 call, or maybe perhaps it will be an event where they actually PR it. But that was good to hear. And so obviously that's important because obviously we've got a lot of satellites to build for 2026 and for them to hit 5 orbital launches by the end of Q1. They need to get to the 6 Bluebirds per month production rate by the end of this year. The other reason why that's important is that if they decide to go up on Blue Origin New Glenn and put multiple Bluebirds, which would be at a minimum 6 on a satellite, then you need to ramp up production to fill those launch vehicles. So that's important. And I think obviously, you know, this, This point about production cadence has been a big area of focus for investors. And so if they can hit that, that would be tremendous. Let's see here. So I'm just going through some of these comments.
[00:15:24] Speaker B: Yeah.
[00:15:24] Speaker C: So he also highlighted the next area of discussion was about launch providers and launch timing. I already talked about launch timing. He did discuss the first BB-6 satellite going up on ISRO in the coming weeks. And so as we know, that the date of December 15th has been pushed back to December 20th. However, he also added some color around the fact that, in particular, he discussed Falcon 9, how many—
[00:15:58] Speaker A: Yeah.
[00:15:59] Speaker C: I guess Chris Scholl, who covers the company at UBS, asked about the capacity of launch of each of the vehicles. And he, interestingly for Falcon 9, he said 3 to 4. So I think as we've discovered, it's 3 for now, but by putting back or giving that range of 3 to 4, it sounds like there is an expectation that they'll continue to get the weight down of the Block 2 Bluebirds. And so you'll be able to fit up to 4. Which would be great. And then he did mention for Blue Origin, you know, 6 to 8, and of course at the high end for 8, you need to get the weight down. He did reiterate that the plan is to get 13 launches in total through the end of 2026, which is good. And then let's see here. You know, he did talk about bringing in or evaluating other launch providers because they do expect additional launch to come online in 2027. And so what's important there is that the satellite has been designed to fit any standard fairing. And so once some of those other options come to the fore, the company will be able to potentially leverage those vehicles. He did mention that they've booked in excess of what they need, and that's contracted launch for 2026. And so to get to 45 to 60, if there are some hiccups around the launch providers, and my assumption here is that they've probably overbooked relative to what they thought they would need on SpaceX because they've actually contracted quite a bit of capacity or majority of the capacity on Blue Origin. And so if you're going to book in excess of what you need, but a majority is with Blue Origin, My guess is the excessive capacity that they've booked is with Falcon 9. And so he did point that out that the plan in 2026, they will have flexibility because they've basically stacked all this launch on top of each other. And so one way or another, they're going to get all those satellites up. So I'm going to move on here. Let's see. Moving to the next section. You know, he talked about how vertical integration is important, how the previous, because the research analysts had asked about potential delays and previously for the Block One launches, there were 2 components that delayed that launch, which they have since internally brought that in-house to get vertically integrated. And I think it's important. To point out, and Scott hammers this point quite often, is that it's difficult to build through purchase order or relying on primes. When you have a prime contractor building something for you, that adds another layer of bureaucracy and it's not just bureaucracy, but a cost. So imagine if you go through Boeing and you spec out you put out an RFP for a satellite, these are the requirements that I want. And then those primes come back and say, well, here's what I've designed and here's what it's going to cost. You're not actually in control of the design. They bring something to you and then you can make modifications to it, but it's unclear if that thing is actually going to work. And so as they build it, maybe you want to modify it. That actually costs money. You have to go back and say, well, actually I want to change these things. And then The prime is like, okay, well, let us think about that. And then they come back and say, well, okay, this is our solution. It's going to cost you this to change it. And so that's why it's so expensive and costs a lot to go through primes versus being vertically integrated like a Starlink slash SpaceX or AST SpaceMobile. You can develop and iterate quickly. And Scott mentioned this In the call that, for example, by being vertically integrated, for example, you have to manage yields for some of these components. And if yields are low and through testing you find out that some component has failed, then you just basically swap it out, right? And you keep testing until the components, your yield goes up, but the components that you're testing work. And then obviously that goes onto the finished satellite. But But through that process, you're able to do that very quickly and you see it in real time versus having to wait around a few weeks to hear back from the prime like, oh, this is not working. What do you want us to do? And then you've got to tell them and then they go back to the drawing board. And as you can imagine, like that bureaucratic process, it costs money, but more importantly, it costs time because time is money. So, but that point yesterday was being made that being vertically integrated is important. And, you know, there was a number of times where Scott talked about how the factory is, you know, they're almost at their rate or nearly at pace. And so those are all, you know, positive little nuggets that he dropped. The other thing is that he did disclose that they're seeking, so on top of the 500,000 square feet that they already have currently, they're already looking for a 4th site in Midland, and that site will be focused exclusively on building Microns, which As most of you are familiar, that's— microns are the building blocks that go into the unfoldable array, which has solar panels on one side, it has antenna arrays on the other. Within that micron, there's the processors, the ASICs, and also batteries as well. And of course, the radiating structures that allow you to dissipate heat. And so what was interesting is that, you know, he talked about the desire to build an entire factory just focused on microns. And then he mentioned that, you know, those building blocks are going to be applicable to any of the satellites they build and then many other applications, which I think goes to, you know, or hints towards this whole idea of eventually making Satellites or components for other people, right? And in particular, if that's for defense applications or data center applications, we'll see. But I thought that was pretty interesting. Let's see here. The other thing related to the factories as well is that I think the host had asked about the new spaces, the new factory spaces in Florida and Midland that they just acquired and asked if those had been ramped up. And it sounds like they have not, they're not there yet, but they are bringing them online. And so in particular, Scott was saying, you know, that's At this point in time, I would say, you know, at this point in time for the company, in order to produce faster, it's a matter of throwing bodies at the problem, but they are focused on automating as much as they can. And so, as, you know, Katsy has said before, FM1 and FM2 were really the satellites needed to learn how to build those satellites. And so through the process of building those 2, Then, you know, the know-how, the systems, the setup were put in place to then build the rest of the Block 2 satellites. And now, you know, they've been hiring like crazy as we've all seen. I think they have 1,800 employees now, but the goal is to automate as much of that process as possible. And it sounds like those 2 factory floors, which are being set up right now, There, it seems like based off of what, what Scott was saying, there's going to be a heavy focus on automation and then, you know, taking out costs through efficiency as well. All right, I'm going through. Let's see here. There was a small discussion about ASICs and the improvements in performance. And as we all know, you know, you reiterated that Once ASICs are put into the Block 2 satellites, that should give them up to 10 gigahertz of processing power, which is triple what the previous Block 1 satellites could do. Let's see here. Moving on to the next section. You know, there was a discussion about partnering, using MNOs as partners. And I mean, it's, this is something that we all know quite well. That company has 50 agreements with nearly 3 billion subscribers. They also, Scott, you know, drove on the point that MNO partners own 20% of the equity and have a number of representatives on the board, whether that's direct, like Mickey Mikitani of Rakuten. AT&T has a board member, Vodafone, but then American Tower as well, which is a partner. And then Verizon also has an observation seat. So there are borders over. So there was a question about how long the definitive commercial agreements are, and we did get a little more color in terms of range. And so obviously like Saudi Telecom is the longest at 10 years. AT&T is 5. I believe Vodafone is 5. And then the company did discuss 2 years, you know, a potential, or one of the definitive commercial agreements being as long as 2 years. And so I think that might be the one for Verizon, which makes sense since Verizon is kind of a, not as a senior partner as AT&T. I think AT&T is kind of quarterbacking. On the MNO side, the US deployment of supplemental coverage from space. And so for Verizon, having shorter 2-year agreement would make sense. And then after seeing how the service performs over 2 years, they'll decide whether or not to re-up. But as most of you guys know, Verizon is a strategic investor. They've also contributed their 850 megahertz spectrum and Yeah, but who knows, maybe Verizon is 5 years and perhaps the 2 years is another party, but that's my guess. Let me see here. Scott did get asked about the economics of definitive agreements with these MNOs and he talked about 50/50 revenue split being sacrosanct, their North Star. And so It sounds like a majority of the contracts are falling at 50/50 at a minimum. And I know in the past that Renee's talked about potentially getting a higher cut depending on the nature of the relationship, but I think for the most important relationships where MNOs have contributed equity, revenue prepayments, especially spectrum, they will get that more favorable 50/50 split. The other thing that he disclosed is that these definitive commercial agreements are very exhaustive, you know, 100-plus page documents that bring, he mentioned specifically, you know, in this example, 20 cross-functional groups at the MNO organization led by senior management. And so These are, in his estimation, contracts that are going to be worth hundreds of millions of dollars by customers. And so I think that just shows like the level of integration and importance and where Scott specifically was saying these agreements are put together because we are building new businesses, which with each of these MNOs, this is not a separate tack-on business of SMS messaging. It's full broadband, full integration. I mean, yeah, and I guess I forgot to cover this. I mean, a prime example is AT&T and FirstNet, where yesterday FirstNet disclosed a video, which was great. They targeted Space Mob to get some level of engagement to kind of, I guess, draw some hype around that video. But what was cool is that we saw 3 public agencies, one federal, one state, and one local, test the service. And so when we talk about integration, obviously AT&T is going to provide commercial service to its customers, but then through FirstNet, we're going to be providing first responder services. And so having that tight integration, I can only imagine how complex these commercial agreements are because it's not just, are you going to sell and support the service, but It's how you're going to utilize the carrier's terrestrial spectrum, which is a big deal, right? Because spectrum is the lifeblood of all these MNOs. It's how they, it's the bedrock of how they build their, what they build their business on top of. And so to engage a company like AST SpaceMobile with this new technology, you're going to have to put in some protections and make sure that whatever service AST is providing, it's not going to impact your core business, right? And so that's, for example, in the case of Starlink, where they actually don't reuse terrestrial spectrum. In the case for T-Mobile, they were given a dedicated 5 megahertz channel of mid-band spectrum. I mean, it's terrestrial for all intents and purposes, but They were given completely separate spectrum that does not overlap with T-Mobile's terrestrial spectrum. And through that, because of the well-documented interference and power issues with Starlink, there they could run a service and not, at least from the T-Mobile perspective, not feel that their existing terrestrial service is going to be impacted. Whereas what AST SpaceMobile's doing in the first rollout of the Block 1 Bluebirds is they're actually Because you're able to put down fixed, very accurate fixed cell beams, you can just fill with precision and accuracy all the dead spots that the carriers can't cover with their own spectrum. And you're reusing that spectrum, which is why the service is so valuable because that terrestrial spectrum, which is low band, has better propagation and coverage characteristics. And so that's what's really, and that's the killer app, right? For direct-to-cell. It's using low-band spectrum that can go through, you know, one or two walls that can work in your car, work, you know, in a plane, work wherever you really want it to work. And this is what, you know, Apple, the Information article had talked about, for example, Apple wanting to get satellite service to the point where it's basically transparent to the user. So not forcing someone to like go outside their house and point their phone directly at a satellite, but to be able to take it out of your pocket and use it wherever you are. That's the holy grail, right? And that's what utilizing terrestrial spectrum with a large phased array that does very precise beamforming, that's what first principles design can do for you. And so that's, you know, that when looking at these definitive commercial agreements, there's a lot of things that have to be hashed out. And there's a lot of complexity, which is why, you know, it took a year and let's see, what was it? A year and 4 or 5 months to get Verizon from an MOU to a definitive commercial agreement. And obviously the additional complexity there is that Verizon, as Ryan O'Connor would say, Verizon's sharing the toothbrush with AT&T. Or they're sharing underwear together. They're both using the same pair of underwear. And so when you have 2 large parties that are competitive working cooperatively and contributing highly valuable spectrum, 850 megahertz spectrum to provide nationwide coverage, that's a complex marriage to figure out, right? And so yeah, that's why it took so long. But But I think going back to the original point, I'm kind of rambling here. These defended commercial agreements are complex and I can only imagine Saudi Telecom, a 10-year agreement, $1.8 billion minimum value with revenue commitments, $175 million prepayment, which is going to come before the end of this year covering the Kingdom of Saudi Arabia. And it was interesting, Scott actually Made a point that I'd talked about before, which is Saudi Telecom also has access to, or they have the rights to 60 megahertz of S-band spectrum in the country. And so that's something that's a huge asset that ASTX Mobile is going to be able to leverage. And then of course, Saudi Telecom also has operations in 13 other countries in and around the Gulf. And so, so yeah, these agreements, and, you know, Scott alluded to the fact that we should be expecting many more this coming year in 2026. So yeah, I guess he's going to be quite busy negotiating these things. Let's see, I'm going to move on. So there was a question about whether the most recent Verizon and Saudi Telecom agreements have spurred on additional conversations. And to what I had said before, and this is where Scott made the famous quote, he responded, there's not an operator around the world who doesn't want to meet with us and think about how we can work together, which is pretty crazy, right? And the constraint is that it's largely on the company. And I think also it's on the technology, right? 'Cause on the one hand, you've got 50 MNOs that you have MOUs with, but to then move to a definitive commercial grant, you have to be very strategic and smart about that because you're not going to be able to just roll out service to 20 countries at the same time. You're going to want to roll out service to your key player, key, you know, key partners and iron out the quirks and make sure everything's working. And then you take on another country or 2 and then And then, you know, everything's fine, you work it out, and then you add another country. And while you're doing that, you're also launching additional satellites. So your capacity goes up so you can actually, you know, provide proper service to each of those, those, you know, new customers. And so it's going to take time. It's not going to be something where you immediately turn on all 50 because that would be crazy. You're going to do this in pieces and But at the same time, like the great thing is that as these customers see the service and they see the impact on their subscribers and the economic impact of that, you're going to have this dynamic where people are going to, and we, I mean, we've already seen it with prepayments, but you're going to have this dynamic where people are going to be paying you upfront higher premiums to turn on service in their country first.
[00:36:07] Speaker B: Right.
[00:36:08] Speaker C: And so that's, that's a great position to be in. And that's perhaps where you might've been giving some of these earlier customers, which are the most important, candidly, but you know, you were giving them 50/50 deals or the folks who joined later who were more on the fence, um, and weren't as willing to commit as much economics, then, then fine, you know, maybe you'll get 40% or 30%. split versus, you know, 50%. And so that's how like the economics, the dynamics can change quite a bit. Let's see here. I'm going to go through the next few questions. So moving on to government, Here, Scott gave quite a bit more color around the government opportunity. As most of us know, government, and how you define that is there's kind of 2 areas. One is first responder networks, which I think is going to become, we saw the FirstNet video yesterday, and I'll just add the FirstNet video, the tweet that FirstNet put out was like, hey, we're giving you Just a brief little teaser video of some of the testing we did, and then stay tuned because there's going to be more updates on the program soon, which, you know, I don't want to get like too optimistic or whatever, but there's a board meeting for FirstNet coming up in a few days. And so whether it happens at that board meeting, it certainly does seem like in an, at a minimum over the course of 2026, we should be getting A commercial contract with FirstNet, especially as the service rolls out. And of course it's going to be intermittent initially, but even intermittent service in, you know, in a situation where there's a disaster where you need some resiliency or some type of communication regardless, even again, if it's intermittent, I think FirstNet will want to have that online. And so I think we'll probably see some type of contract for FirstNet in 2026. And interestingly, based off of some of the FCC filings that we've seen from Verizon, it does seem like Verizon's first responder network Frontline, that's going to be another contract that we sign as well. And I believe Frontline, it's not as big as FirstNet, but it has a few million subscribers. So Um, so that is going to be pretty, pretty material. But going back to what I was saying before, um, yeah, so the government, there's 2 kind of angles. One is first responder networks. And then of course the second one is military. And so in this discussion, Scott gave quite a bit more details around, you know, military use. One was, um, giving, of course, the warfighter your troops, more connectivity. And connectivity means whether that's older devices, but newer devices, that's going to be a key use. And he talked about even goggles and different connected devices on the battlefield. But then he moved on to discuss some of the non-communication cases, which I think is where Most folks are interested. For example, utilizing the large phased arrays and being able to manipulate frequencies to do interesting types of applications around radar. And so then he connected that with the fact that, and this is for the US and allies. And when he talks about allies, we know that the company has been doing testing with Fairwinds and Nokia. Or through those 2 parties with NATO. And so I'm assuming that's probably the first batch of allies that he's talking about. And then of course, you know, that probably expands out to the Pacific theater as well. But, or actually I take that back. It's already happened in the Pacific theater because Fairwinds has tested with the Navy, I think it was Air Force and a few other armed forces out in out in the Pacific. And so, so anyway, I take that back, NATO and the Pacific already. But going back to the reference to radar, he tied that to Golden Dome. And so sensing applications, he said, you know, including radar, which is one of the applications that brought them into the Golden Dome conversation over the past year. And so in particular, you know, that, that's one of the few times where he's actually talking about a very specific application. Then tied it to Golden Dome. You know, he mentioned how the environment is very positive for these companies, especially with dual-use technologies where you have a commercial capability that makes the technology viable and can stand on its own economically, and then that can be leveraged in defense applications. And so, you know, he discussed the $150 billion RFP that's open for these programs that are related to Golden Dome. And that, you know, there's a lot, a number of big use cases for them and that they feel pretty positive about that. And so in terms of timing, he didn't say this, but based off of our research, I think, you know, Golden Dome timing is probably sometime in January. We'll probably hear in January, February. So, so yeah, something to look forward to. And I think the Ray's DSpace Mobile, like most people, associate the company with direct-to-cell, and that's kind of where the story ends. I think most institutional investors who are looking on the sidelines or not familiar with the company pretty much like have no clue that the company is working with FirstNet and that also there's a tremendous amount of military applications here. And it's not just connecting devices on the ground, which is going to be critical, right? think about all the battlefield assets having what we learned in Ukraine, you want to have multiple resilient and redundant communications networks, right? So if something gets taken down, you have backups. And so on the battlefield, I guarantee you those assets will be utilizing government communication networks, but also Starlink, also AST SpaceMobile, and any others, because you do want to have redundancy and resiliency if your adversary is able to either hack your network and take down one or two of those pathways to communicate, or they use electronic warfare, which, you know, these large, powerful phased arrays can do some interesting things around electronic warfare as well, which we've discussed at length. And so not just defensive and communication capabilities, but offensive capabilities. But as I was saying before, a lot of institutions actually don't associate the company with defense. And so it will be when the company does get that 10th, 11th, and 12th defense award and they go beyond, they size up into programs of record and become worth hundreds of millions, which the company has discussed For 2026, the biggest revenue drivers are going to be government and defense related. I think that's going to be eye-opening for some of these institutional investors. And so, you know, the story I think will end up creating a bigger tent and draw in aerospace defense investors and on top of your traditional TMT investors. All right, so I'm going to keep going here. Let's go through additional parts of this transcript. Let's see here. I'm going to try not to cover some of these things that have been covered before. So I'm going to move through this. He did talk about the S-band and L-band spectrum strategy. Like Starlink, AST SpaceMobile has secured North American, well, in particular for Starlink, that's US, and then for AST, US and Canada, but each have secured MSS spectrum for North America. And then beyond that, both companies are going to have to go out there and speak with regulators or perhaps engage with parties that already own the spectrum. But it's going to be an interesting 2 to 3 years as both companies go out and make their case to procure additional S and L-band spectrum. And in particular, we talked about, I guess it was Sunday night, how For Starlink, they are going to be, are they just given how, I guess, vocal Elon Musk has been around his displeasure with the EU, that's going to make that conversation increasingly difficult or adversarial. And so it's unclear, you know, it's actually EchoStar that's going to go back and try to get that spectrum renewal for May of 2027. However, I think the EU probably sees EchoStar being a large, you know, being a proxy for SpaceX shares, of course, but leasing out its spectrum in North America to SpaceX. It'll probably view EchoStar and SpaceX as one and the same. And so I think at a minimum, it increases the Vodafone-Satco JV with AST. It increases the odds that we do get an allocation. of MSS spectrum. And so if that's 5 by 5 or 10 by 10, those odds go up. And I think the odds of EchoStar, just given their historic use of that spectrum, which has been pretty much, they didn't utilize it, but the historic use, and then based off of the potential use, my guess is that they don't get an allocation or they If they get something, it's going to be pretty marginal, like maybe maybe at two and a half megahertz by two and a half or five by five at most. But yeah, I think I think it's important to highlight the sovereignty issue where you know countries do want to have control of their data. They do want to have control of constellations that are going over their countries that are providing that that service. And so SACCO JV. As the company has been at the forefront in terms of technology leadership, acquiring Spectrum when most people would say that that wasn't a good idea. And then of course, you know, EchoStar did the same. But in regard to the sovereignty, this is an important technological and structural point for the EU. By creating this JV, you give them, and you know, you've got the partners that are related to that in terms of voting control, that's going to be totally European-led. And the constellation, when it's over Europe, that's going to be European, essentially owned and operated. And that's going to be, you know, the data is going to land in that country. And so that's important, right? Because I think from an architecture standpoint, Starlink actually operates as a completely separate network. It doesn't, integrate with the core of the MNO partner. It actually, you know, it's almost like a roaming network where everything happens on Starlink and then they eventually bring the data and customer back to you. And so in that type of architecture, I don't think it's going to work for Europe if sovereignty is their key focus. And so I guess for V3, the engineers there, perhaps they're thinking about it. They'll come up with some type of solution that gives some of these countries more comfort. But yeah, whether it's technological or political, I think the key thing is that the tailwinds are behind AST SpaceMobile, that you've got countries and politicians and existing political frameworks that That wants on-routine. And I think AST has the best solution for that. And this is not just happening in Europe. It's also happening, for example, in Mexico where I think Elon called Carlos Slim a drug dealer and Carlos Slim basically cut all his ties of potentially working with Starlink. And we're working with Claro and America Móvil already. I think at that point, You know, Slim was evaluating both companies and, and then after what was said, you know, he, he threw his weight behind AST SpaceMobile. So anyway, just something, something to think about. Let's see here. So I'm getting towards the end of this, which is good, this transcript. One thing that I will point out is that during these conversations, Chris Schoell asked Scott several times, it was actually twice, to compare AST SpaceMobile to Starlink. And Scott pretty much kind of deflected that. He did talk, the one point that he made was that AST's solution has been from the ground up and from the beginning has been about broadband, right? And so that's where he made another famous quote where, you know, we're not comparing apples to oranges, we're comparing apples to aircraft carriers. And so, you know, we're not starting out with text messaging and then kind of trying to upgrade the solution to get to some level of data capacity. He's like, we're going to be doing full-on broadband. from the get-go, which is why it's taken this long while we've been careful and deliberate in developing the technology. And so we want that customer experience to be broadband right out of the gate. But the point I was making is that one thing you'll never hear the executives, Scott, Abel, anyone at AST SpaceMobile, they're— and this is actually a good business practice. I think most people should try to to incorporate this into how they talk about competitors, but you'll never see Scott or Abel denigrate Starlink or other folks out there. And I think that's important in that it's not really a point of comparison. And Scott made the point that the market is huge and there's a lot of interest and there's going to be room. The one thing that you will hear them say is that there'll probably be room for 2 or 3 players. And my assumption is that obviously Starlink is one of those, but they'll never be out there denigrating Starlink. And obviously there's some practical reasons for that. And one is SpaceX is an important launch partner. And so you probably don't want to denigrate Starlink because they're connected. But then also just in terms of decorum, what the company does is they try to get people to focus on what they're doing. It's not really about the other guys, right? And so I thought that was pretty interesting. I think that's actually a good policy to have. You know, when people ask you about the competitive landscape, you focus people on what you do. You don't spend time talking about how others are inadequate or maybe, you know, maybe Yeah, I guess making direct comparisons, you let other people do that. So I thought that was kind of interesting. Let me just look through here. So of course, one area that got people very excited is, you know, Scott was asked about the financial model and what margins would look like. And, you know, he talked about how Historically for satellite companies, wholesale businesses, you've seen incremental margins of 85%. And so given the company's growth and the type of service that they're providing and the economic structure that they have with M&Os, you could see 90% plus marginal economics and EBITDA margin flow-through that would be somewhat comparable. And so So that, I think that's, you know, obviously that's a big eye-opener. It's what people, you know, once the business is up to scale and you've, for that type of business, you've got to spend a lot of CapEx upfront to get the constellation up. But then once it's up and running and you have, you know, some ongoing maintenance CapEx replacing some of these satellites on an ongoing basis, yeah, I mean, the company is going to generate a significant amount of cash flow and the margins are going to be pretty tremendous. Let me see here. In terms of the operating model and leverage, you know, he talked about how OpEx right now is $60 million per quarter and that might trend up a little bit, but just given how the organization is set up, he doesn't really see ongoing operating expenses increasing. And so as the constellation goes up and you expand customers and sell more service, you know, the margins, the operating leverage that you get is going to be pretty tremendous. Let's see here. And I'm just going through the rest of this. So I think There was a question about liquidity and their funding in place for 100 satellites. And it sounded, the question was about opportunistic funding in the coming year. And so I think Scott said they're going to be reactive. They feel very comfortable with $3.2 billion of pro forma cash and liquidity. That also includes the remainder of the ATM that they have. And so they can get up to With the money that they have right now, they can get up to 100 million satellites to deployment. As we know, they've also are tapping other sources. We still have XM funding that's ongoing, that process, which could be a few hundred million dollars. And then of course, as we saw with Saudi Telecom bringing in $175 million of prepayments, there's going to be more of these in the coming year. And so I think, could the company do another convert? refinancing that or doing more equity? Sure, they might opportunistically, but I think now it feels like the company is going to focus more on some of these commercial prepayments as they sign more commercial definitive agreements. And then also, because government, the defense side is kicking in where you're going to have hundreds of millions of revenue this coming year, And then of course, Golden Dome, some of these contracts, contract awards coming in. I don't, me personally, I don't think that company's going to need to really draw heavily on, for example, equity funding. And so it sounded like, at least from that conversation, that they are, they feel comfortable with it where they are and they're not going to need to tap any additional funding. And so finally, In closing, what was interesting is that Scott referred to having the 2 shells, which is low-band and mid-band spectrum shells, Block 2 and Block 3. He also did talk about the possibility of a government shell, which makes sense, which is why I think the company's now considering expanding production eventually from 6 satellites to 12 satellites a month. And they're They're contracting additional space because it sounds like government, they must be getting, and this goes to Golden Dome, they must be getting some heavy hints that the government wants a dedicated constellation and dedicated solution. And so on top of the existing 2 constellations that will be up, perhaps the government will have a more specialized dedicated Constellation. You might do that for a number of reasons. One would be you don't want to share a piggyback with commercial. Maybe you want to use it, as I mentioned before, like an electronic warfare platform, or you might use it for very specific reasons like jamming, spoofing, all that stuff. And as we know, there's 9 total contracts on the defense side. And so any number of those could require a more dedicated constellation. And as we've, this is speculation on our part, but we assume that FM1 and FM2 are part of Halo. And so my assumption is that I think there's probably going to be a move to eventually, and maybe it happens in parallel, put up a more specialized constellation similar to what SpaceX has done around Starlink Starshield. Perhaps there would be, we've talked about this in the past, like a dedicated shell that would, it might be Blackbirds, right? And so that was interesting. That was the first time that I've heard where the company's talked about the potential of a government shell, or he said very specifically potential government constellations, constellations with a, I guess that's plural. And then he closed, what was interesting is he talked about how there are these add-on opportunities. And so once you've built, you know, they, you know, he talked very specifically earlier about building satellites and having this ability to leverage an architecture that's going to put the most power at the cheapest cost with the largest arrays into space. And so that That platform gives you the potential to support other applications, other strategic interests from governments. And so he closed by saying that the add-on opportunities are really impressive. And so I think the company has probably kept its roadmap very close to its chest and is focused on communications. And for many years, we speculated that Government, there were a lot of government applications and the company never really discussed them until, of course, towards the end of 2024 and then 2025. And so my guess is as they execute on the Block 1 constellation, perhaps sometime over the course of 2026, you know, we'll start hearing more about some of these other areas of expansion. Because I, You know, as we've speculated, I think the company has been, has had talks with Microsoft and a few other big players. And of course we know that they have an existing strategic investment and commercial agreement with Google. And so, um, perhaps we'll, we'll hear, you know, more about these other areas that, um, that leverage, you know, the existing technology and, and future production capacity. And so, um, so yeah, that's pretty much it. Let me just take a look and see if anyone has questions or comments. There's a few here. Let me look. Actually, there are no questions.
[01:00:30] Speaker A: Okay.
[01:00:31] Speaker C: But anyway, I hope that was helpful. Again, you know, it's kind of a crazy time. There's so much news coming out. Like, for example, When I started this chat, the space, I totally forgot about the FirstNet demo released yesterday, the video of that. And so yeah, it's a pretty exciting time after the UBS discussion. I, in thinking about it more overnight, I couldn't be more bullish about our prospects in the coming weeks and months. And so Yeah, I mean, we've got a very, what seems to be a new Fed chair coming on board and it's going to be a very accommodative environment. You've got this focus from the US government of pushing the US forward as being a leader in space amongst a number of other initiatives, whether that's AI or others. But we appear to be at the nexus of what's important right now. And whether that's for the business that we're attacking today or by having the flight heritage, the development background, the experience, the building blocks, and the patents for the future. Yeah, I think the company is well positioned and it couldn't be a more exciting time. So I'll end it with that and we'll see over the coming days additional news that's coming out. But yeah, I'm looking forward to December 20th. Um, I think we are— Kook and I agreed, and, and Katzi as well, I think, um, agreed to do a space that will be hosted by, um, another Space Mob member. And we'll do a live space of, of the launch. Hopefully it won't— it'll be at a reasonable hour for New York time. Um, but, uh, but yeah, in the meantime, I'm sure some things will come out and I'll do another space in a day or two. It seems like that, that's the new cadence. I feel like maybe My cadence for Spaces are like production for Bluebirds. Like I'm getting up to 6 per week, 6 Spaces per week. But I guess for some of you that's good because apparently people want more Spaces. But the other thing I was going to do is I do think as we head into the holiday season, we could do, I'm going to perhaps host like a holiday Space where we kind of reflect on 2025. And I'm going to try to bring up as many people in the Space Mob as I can for that space where we can just talk about things that we learned over 2025, things to celebrate, and of course things to look forward to, but also to share some war stories because obviously there's a ton of those. And I did, I guess I'll just drop a little hint. I did hint perhaps over the last few days about, I I rarely, I mean, I don't ever, only on rare instances will I talk about like position size, you know, some of the things that I'm in in terms of actual numbers. I've never really disclosed like portfolio size, but I did the other day. I actually put in one of my, I disclosed my retirement account performance, just, you know, and the point of doing that was just to reiterate that, you know, oftentimes the best strategy is to do nothing. And in that, and that account in particular, like, I pretty much just buy and hold stuff. And my AST position in there, you know, I don't really touch it. And so, and you'll see like that retirement account has gone up, it's gone down, but sure enough, like it's just grown over time. And the reason why I did that, and this is what I was about to refer to, is that, you know, I think in the coming week or two, there may be an article coming out interviewing a few different Space Mob folks, just talking about Space Mob and the journey. And so yeah, be on the lookout for that. And as part of the article, the person I spoke to had asked about, you know, what's your position size? And so I disclosed it there. So I guess people will know. So I figured, eh, I guess it's not the end of the world if I, you know, disclose one of my retirement accounts, the size of it. So Anyway, but yeah, that's something to look forward to. I think the reason why, and some people have asked like, why would you do that? Talk to a journalist. I think it's really just, we've been on this tremendous journey and this community has been exceptional. I think in terms of the people who, from all walks of life, primarily retail investors, but people who have expertise in production, engineering, law, accounting, or just day-to-day like bartending, owning a restaurant, any number of things. But it's cool that folks from all walks of life kind of in an organic way have come together and built this community and have connected and formed these friendships, but leveraged that to Basically crowdsource research, right? Whether that's understanding the underlying technologies, understanding the risks. I know there's a few rabble-rousers out there. I don't know who they are, but talking about like how we don't talk about risks, which is funny. It's like, well, wherever you've been over the last 5 years. But I think it's important for me at least, and I've said this before, you know, I wouldn't have made it through these 5 years without this community. And that's for sure, right? Like my friendship with Katzi Cook and Steve Larison early on and a whole host of folks. And so I think it's something to be celebrated, right? Like it's a unique thing that I don't think will ever be replicated. I don't know if any community has had this amount of deep due diligence, but also just friendship and people who are kind, right? Who I mean, I'll be the first to say like Katzi, if it wasn't for his deep technical due diligence and understanding of RF engineering and military use cases, I certainly wouldn't have had the conviction to hold. And this guy, he's a farmer, he serves in the military. He also does, I think he has another day job, but he spends a tremendous amount of time and effort in putting together due diligence and doing that in such a way that's easily digestible. Well, sometimes easily digestible. Sometimes it takes quite a bit, like for me to read through something 10 times to actually understand it. But for someone to give their time so freely and who are willing to do that, because I think, you know, I was talking about this with my sister, back in the day before social media when you had, and this is, well, this is particularly true for professional investors. People tend to keep great ideas to themselves, right? And, or they might share it with close friends, but they're not going to go out there and freely share it with complete strangers, right? And so with this community, you've seen the exact opposite where people do a ton of work and they will share it freely. And oftentimes they Yeah, it's like without any ulterior motives or objectives, it's like, oh, these people I kind of view as my friends and family. And so if there's something bad that I find, I'm going to share it, or there's something good, I'm going to share it. And so that's very unique. I don't think that there's anyone, any other, and this is not like to denigrate others, but I think this community stands out and it's unique in its membership and in the ethos, which I don't even, I mean, it's not like we have a set guideline of this is how you should behave and this is what you should do, but it's kind of something organic that's just happened where it's like, yeah, be nice to one another and people share things freely and just be a good person. Anyway, I'll end it with that. But yeah, be on the lookout. I think something cool might be coming out soon, or I hope it does, and we'll see. But anyway, I'll end it there. Thanks for joining. And yeah, looking forward to the next year end and an even bigger 2026. Take care, everyone.
[01:08:57] Speaker A: Thanks for listening to the AST Space Mover 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 Space Mobile, make sure to subscribe. Thanks again, and I'll see you next time.
[01:09:20] Speaker B: We're doing something very, very big, and I think with this technology we can really affect billion lives. AST Space Mobile is the only company. that have 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 NMOs.
[01:09:57] Speaker A: Listen.
[01:09:57] Speaker C: Mmm, waffles.