AST SpaceMobile Hits 10 Bits Per Hertz — Matching Terrestrial Networks From Space

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[00:01:03] Speaker C: This is the AST SpaceMobile Podcast. 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.
[00:01:22] Speaker D: Hey everyone, thanks for joining. I figured I'd do a quick space here. I've got maybe 25, 30 minutes, but, um, but yeah, awful day. It's red in the market, everything is down, uh, in terms of high beta names. You pick any space sector name and everything at peak, we're down maybe 9, 10, 11%, um, although it seems like we are recovering a bit here. And so whether it's space or looking at quantum or of course semiconductors, which have taken an absolute bath today, although it looks like Nvidia's about to turn positive or it is positive. Yeah. You're going to, in a lot of these high-growth areas that have high beta, you're going to have days like this where everything moves together and there's not really much you can do about it. It's not company-specific. It's just everything is, folks are de-risking. You might have algos involved too, but yeah, as long as you know what you own, it's okay. I had a number of people after I posted some of this positive news this morning, people are like, oh, the stock's going to be down, or you should sell. I told you it's going to be red. And it's like, I've been holding this stock for almost 6 years now, I've seen so many ups and downs. And obviously we're in one of these moments in time where the market really doesn't care about positive news or developments. Whatever stock you own is going to trade with the sector and maybe it'll slightly outperform or underperform, but everything's going to be down. And so for the people who aren't mentally prepared for that, and I commented, there was this one guy who was saying that that I'd been putting out this positive news and the stock wasn't up, and so that I should give up. And it's like, that's probably the worst thing you can do as an investor. I mean, obviously positive news isn't being reflected in AST SpaceMobile stock, but that's not going to keep me from researching and doing my work because eventually when you do have a more stable market and things kind of bounce back, then these things will be reflected. I mean, it's just part of Natural market cycles, right? And so, yeah, I mean, it's discouraging. And of course, people from an emotional perspective, it can be hard to accept, but this is just part of investing. This is why people who have conviction and hold winners, they make outsized returns and are able to generate significant wealth. And then there are other people who When it comes to single stock names, they end up losing money consistently because when there is volatility, they'll buy at the highs because they are euphoric and are very positive about a name. And then the inevitable drawdown comes and they sell at the bottom and they do this over and over again. And without knowing what you own and having conviction, that's going to happen to you every time. I mean, it's the case when you have a portfolio and there's some marginal ideas. And for example, if you're in a period where you're making money and you can pick anything and it makes money, lo and behold, when there is some volatility, the first things that you sell typically are those things of lower conviction. And so if your portfolio is made up of things that are all low conviction, then you most likely are positioned to lose money in time. So just something to be aware of. And there's people who obviously from an emotional perspective, it's hard for them to weather volatility. And that's why I don't say this as something negative, but if you are unable to control your emotions, then probably investing in single stocks is not something for you. And perhaps if you have a job and you've got to pay attention to other things, then it is hard to stay on top of all these things. Or you can take the other tack, which is you buy something and then just don't look at it. But there are certainly people on social media who are looking at stock price moves minute by minute, second by second, hour by hour, and they get frustrated. And that's the reason why I say I've held this stock for almost 6 years is that I've had the patience to hold it this entire time, and I've seen horrendous drawdowns to the point where I was almost mentally broken, but I've also experienced the highs too. And I think people who are focused on near-term share price movements, you're doing it wrong. And oftentimes it's those people that are on margin or have options, and that lead you to do difficult things, right? Or not be mentally prepared. So I think it's important to, yeah, just keep that in mind on days like this. But just to go through real quickly, and then I've gotta hop. So this morning there was a presentation by Satellite Connect Europe, and what was disclosed is that the most recent 98 megabits per second achieved by the Block 1 satellites was actually done on 10 megahertz of spectrum. And that's just 10 megahertz of downlink spectrum.
[00:06:51] Speaker C: Wow.
[00:06:52] Speaker D: By exhibiting 10 bits per hertz efficiency, this is well above what Katzy and others had discussed as being potentially a theoretical top, which was 4 bits per hertz. And so this is— this more than doubles that. And so I think we— I mean, in the end, we don't really know how they achieve this without full confirmation, but it seems like they probably utilize dual polarization where you can transmit packets on signals that are both utilizing horizontal and vertical wavelengths. And I'm not probably doing that justice, but by doing that on the same 10 MHz of downlink channel, you're able to achieve basically 5 bits per hertz times 2, right? And so this is a huge accomplishment. Obviously, the company in this slide, and this was Satellite Connect Europe, which is the joint venture formed with Vodafone, Here they talk about, they are commercially rolling out 3 bits per hertz, but eventually because of these technological improvements, the efficiency that Abel has discussed is boosting that by on the order of 3 to 11 times. And so what he meant by this, by the way, is that first initial step, they talked about getting 3 times efficiency and that was for the near term. Well, this performance test of getting to 10 megahertz, I'm sorry, 10 bits per hertz has achieved that 3x improvement, 'cause the company is approximately achieving around 3 to maybe 3.5 bits per hertz. And so by getting to 10, this has already accomplished their first goal, which is getting the 3x improvement. But they do talk about how through various optimization techniques and AI, they expect that to get up to 11. And so as one of the Space Mob members astutely pointed out earlier today, by getting to 10 bits per hertz, that's effectively getting at par with terrestrial systems, which is kind of insane. I think terrestrial systems are around, just in my research that I did quite some time ago, I think they're around 7 to 8 bits per hertz. And so to get to 10 is pretty insane. And so this is a game changer in terms of efficiency. Because it puts you on par or better than terrestrial networks. That said, obviously in dense urban environments, you're not going to outperform the capacity of terrestrial networks because in terrestrial networks, you can just hang more towers, and so you can densify those areas. But in suburban or rural areas, you're going to effectively rival terrestrial towers. And then by having having multiple satellites overhead and utilizing carrier aggregation and MIMO, you actually are going to outperform terrestrial networks. And so that's something that I think when the market returns to some level of stability, this news should be reflected in the price at some point. So yeah, that was a big piece of news today. And I think for a lot of the skeptics out there, Katzie had posted as well about how how strong the signals are, and the recent tests in Ireland, the strength of signals that we were able to transmit from the satellite to the phone, this kind of all hand in hand come together to show that truly what AST is doing from a technological perspective is highly differentiated versus what is out there currently or what eventually will come out. And so, you know, this is part of the thesis of why 60 MNOs have chosen to work with AST, as well as US Department of War, recently the Japanese government, and likely, you know, oh, and add Brazil to that. And then what seems most likely is Europe as well. So, so yeah, just wanted to talk briefly about that. Additionally, we got some news that Bluebird 11 has shipped and 12 and 13 are shortly behind. And so this is just another data point that cadence in terms of production is building. And so, you know, as we're kind of now at the beginning portion of that, and so yeah, it's an exciting time. I know, as I said before, the market's no fun right now, but now that we're shipping Bluebirds and we've got another Falcon 9 launch coming up in likely the first week of August, there's a lot of things to look forward to. And then the last thing that I'll talk about is this idea that direct-to-device originally thought to be a niche small market with maybe perhaps limited use case. All of a sudden, when I look at research reports for Verizon, AT&T, T-Mobile— T-Mobile got upgraded by Morgan Stanley today. If you look at all these stocks, they've completely derated over the last several months. And so Wall Street went from one extreme that Satellite was not really a competitive threat to all of a sudden it's an existential threat. And part of it isn't necessarily direct-to-device. Part of it is fixed wireless. And so on the one hand, you've got cable companies that are very desperate and they are likely going to be more aggressive in their pricing. And so that's probably not good for the wireless guys whose fiber businesses have been And then of course their wireless to home businesses have been a big growth driver. But then beyond that, people are now, because SpaceX has taken all the oxygen out of the room, people are talking about Starship and the V3 satellites, how those could potentially deliver, instead of hundreds of megabits per second, they could deliver gigabits per second of speed. And so the question there is with that level of service, could that impact the wireless carriers' fiber and home wireless business? And the answer is probably yes. Yeah, that will likely impact them. And this is why, again, strategically, Starlink in general is not compatible with MNOs working as partners. But beyond that, of course, now the concern from Wall Street is, okay, the fiber stuff and the wireless to home is is a concern, but the biggest concern is the meat and potatoes. It's the wireless business, the mobile wireless business. And so now you've got these Street analysts who are catching up and learning about this business, and they're saying to themselves, oh my gosh, what if Starlink is able to build a terrestrial competitive product? And as we know, that's a tough thing to do because you need low-band spectrum, You need infrastructure. And the easy way out, of course, is to say, well, what if they get convinced T-Mobile, AT&T, and/or Verizon to enable them as a virtual network operator? So meaning that Starlink will keep its brand, but then for terrestrial use, they'll use any number of carriers and pay them a wholesale agreement to use their network, which of Of course, AT&T, Verizon, and T-Mobile have said absolutely not, because they know what that means strategically. I think in this game theory, they've come to the conclusion that enabling any one of them, if they break ranks and they enable Starlink, that's bad over the medium and long term for any of them, which is why they formed this joint venture. But then the other alternatives would be to buy a T-Mobile. which, or I guess AT&T or Verizon, which given SpaceX's market cap, they could do that. But as I've mentioned before, that would probably derate their valuation, their premium. They would trade more like a wireless carrier. And as a result, that would be really, really bad for SpaceX. And then of course, if they were to go acquire a wireless carrier in the US, that would put every carrier globally on notice that yes, these guys are coming to eat your lunch, and so don't work with them. But putting all that aside, of course, regulators would find it really hard to approve that transaction, just given that regulators want— they made the mistake of approving the T-Mobile Sprint merger, and that reduced the number of wireless carriers, facilities-based wireless carriers in the US to 3. So allowing SpaceX to buy one of them, and concentrate even more power into one carrier is probably a no-go. And so if anything, the FCC had approved SpaceX buying EchoStar spectrum, they're hoping in their heart of hearts that perhaps SpaceX will create a somewhat competitive 4th player. And so that's why, for example, you wouldn't allow from a regulatory standpoint, the DOJ, the FCC wouldn't allow these guys to buy T-Mobile. But as I've mentioned before, this shift in narrative is not lost on the carriers. They formed this joint venture back in May, and that joint venture, 2 of the key players, and of course AT&T who quarterbacked the whole thing, 2 of the key players, AT&T and Verizon, are working with is T-Space Mobile. And then all the reading the tea leaves, it's all there that T-Mobile will be working with AST. It's just a matter of when and how that will get announced. And so, uh, yes, the market doesn't understand that. I have not seen a single drop of ink written about that, um, in sell-side coverage of the wireless carriers nor AST SpaceMobile. There's been no— let's see, there's been no research update on AST since June 12th from B. Riley. And so yeah, once T-Mobile officially announces that they are exploring or entered an MOU with AST, then people will finally get it, right? And that's when I think you'll see a Verizon-like rerating, which we experienced in June of 2024, that summer. That's when you can expect really the tremendous re-rate happened where it's like, okay, they've locked up 3 of the 3 US carriers. And so that's why on days like this, people are nervous and obviously it's like real money. People are sad that the stock price is down. It's not at 90 or 100. But for me, just knowing what we know, I'm very comfortable because we this stuff is in the pipeline and it's about to happen. And yeah, the market, whether I guess it chooses to ignore it or perhaps there are short sellers who continue to pound the table that the technology doesn't work when it clearly does. And there's these skeptics who, like this guy Lucky Stewie, who is this washed-up industry guy who's apparently an independent consultant, like, yeah, take his word for it versus all the engineers at all these MNOs and of course, all the companies that are working with AST SpaceMobile, yeah, I'll take your word over what these guys are doing. But anyway, but yeah, I think once the narrative shifts, like now Wall Street is focused on the wireless carriers being at the mercy of SpaceX and there's no strategic response and AST's kind of viewed as like this little company that perhaps some of these guys are working with. Because for whatever reason, these research analysts, I don't know, they just haven't really dug deeper to understand what AST SpaceMobile is doing and the relationship with the MNOs. But once T-Mobile is announced that they are working with AST SpaceMobile, that will change the calculus. People, just like SpaceX going public, you can't ignore them now. It's like, once T-Mobile was working with AST SpaceMobile and all 3 are, then that becomes really hard to ignore. And so that's when I think you'll see this violent rerating higher. And so originally back in the day, we rerated higher from the Verizon news and then we kind of found support at $20. We bumped along there until the next move higher. And clearly We peaked at like $120 and then we peaked at $133 and now we're kind of bumping along at $70, which is relative to being at $2 before and then relative to being at $20 before, $70 is not a bad place to be. And so we're going to consolidate here until the next move higher. And I think with the launch of the next batch of Bluebirds and we've got the Jay Leo formal details coming out and formal award, which will be based off of AI's estimation, perhaps second half of July. There's a lot going on, right? And so that, and then of course Satellite Connect Europe, there's a lot of things cooking there. And then, yeah, but I think aside from, of course, military awards and some other things, I think Once we have more formal association between T-Mobile and AST SpaceMobile, when that happens, that's going to be, I think, the next huge catalyst that re-rates the stock much higher. And so with that, I'm going to end it. I've got to take care of a few things. And this is a personal note too, a bit sad, but I just want to, because I care about all you guys, I want to remind you If you are above 30 years old, make sure you go get your annual checkup. Make sure you get tested for, especially here in the US, colon cancer has become a bigger issue. And back in the day, you would normally get tests at 50 and older, but nowadays there's, they're recommending that you get it done sooner. But I do have a close friend who, yeah, is in the late stages and doesn't have much time left. It's just a reminder of our humanity and how precious our time here is on Earth. And so just make sure that you and your loved ones take care of yourselves. Think about your health. Money isn't everything. Of course, it can be fun to invest and make friends and things like that, but do not— yeah, do not ignore your health and make sure you focus on that because there's nothing more important than that. But yeah, so my words to all of you, please take care of yourselves. When you see loved ones, friends, if you haven't talked to them in a long time, reach out to them, check in, see how they're doing. 'Cause yeah, our time here is limited and I think it's important, just a reminder that your health and your friends are more important than money. And so always stay focused on what's the right thing. So I'll end it there.
[00:22:12] Speaker B: Thank you.
[00:22:13] Speaker D: But yeah, I think everyone hang in there. It's a tough time. Every stock is down. And yeah, this is just part of market volatility. And just make sure that you're not overleveraged, you're not on margin, you haven't moved your entire position to options because you want to have some mental sanity. And a lot of these things take time. They take time for the market to recognize because the market's candidly are not efficient. And you want to be around when things finally do get priced in and valuations are properly reflected. So I'll end it there. Thanks everyone for joining, and we'll talk again soon.
[00:22:57] Speaker C: Bye. Thanks for listening to the AST Space Mobile 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. Listen. Mmm, waffles.