Anpanman - The SpaceMobile Grind: Production Ramps and Regulatory Wins

[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.
[00:00:25] Speaker C: Hey everyone, thanks for joining. I thought I'd fire up a space. It's been a while and obviously market sucks, so I figured people might want to just talk about some updates and things to look forward to in regards to AST and also talk a little bit about the markets as well. But, um, but yeah, thanks for joining. And, um, yeah, I, I think I just put it together, a small list. I was just going to kind of go through this. But overall, um, I— yeah, I see people on Twitter lamenting about Rakuten selling and, you know, the company not doing this or that. Um, just take a look around, guys. Like, look at quantum. I guess IonQ is doing okay, but the rest of the quantum names are getting completely hammered. Uh, nuclear names are all down 3% to as much as 10%. Uh, let's see, crypto is all down Quite a bit. Equity names, the miners are down a lot. Some of the AI data center guys are down six, seven, eight, nine, ten percent. Semiconductors down three to five percent. And so space is no different. Let's see. So Rocket Lab is down four and a half percent. Black Sky is down eight percent. Planet is down three percent. And so I actually took a look at. recent space stock performance and from the most recent peaks, Rocket Lab is down 15%, Intuitive Machines is down 19%, Planet Labs as well, 19%, BlackSky is down 30%, and then we are down around 29, 30% from the most recent peak in April. And so yeah, the entire sector has been pulling back and obviously having Blue Origin fail to deliver our payload to space, that doesn't help. But as we've talked about before, there's, we're on the cusp of a lot of other catalysts that are coming in up in May. And in some respects, if you think about what transpired at launch, at least we didn't lose multiple satellites. It was just one test satellite and Blue Origin, they're going to figure it out. But yeah, the market stinks right now. Even though the market's near at all-time highs, other sectors have been catching up. And so hot sectors such as space, Have been pulling back and in tech, some areas of tech, for example, semiconductors have been rallying. But then with today's news around OpenAI not hitting their top line estimates, internal estimates that you know you're seeing a pullback in in all these names. But yeah, it's sentiment currently at the lows. I think we've probably hit the kook bottom. I know he's he's not too happy with. Current share price performance and just looking at people's sentiment online, it appears that folks are quite upset, which you know it's part of. This is part of owning a high volatile name that's kind of a battleground stock, right? Where you know interestingly today we just saw some news with with SpaceX doling out a pretty large pay package if Elon hits the milestone of. having, I think it's like 1 million colonizers on Mars and then some of these other milestones. So it's not as if the space theme is going away. And recently we started to see a trickle of news around Golden Dome, which I expect we'll hear some news around Golden Dome for AST probably in the next, but at a minimum within Q2. But yeah, there's still, everything's kind of plugging along according to plan, but obviously there's this big uncertainty related to Iran and if we're going to reach some settlement around peace potentially or something besides a ground war. But with uncertainty comes opportunity, right? And so that's where owning a name like AST and having to ride pretty big drawdowns, right? Like I think we're what, more than 40% off our all-time high. Actually, let me just calculate that. So the all-time high we hit maybe intraday was $128. Now we're at $72.44.
[00:04:42] Speaker A: So—
[00:04:44] Speaker C: oops, this is wrong. So yeah, we're like 43% drawdown from our all-time high, which, uh, is pretty normal actually for AST for those people who have invested In this name, and so yeah, it's not out of the ordinary. But I did I did post earlier today charts comparing 2024 and 2025, and we've kind of gone through this similar setup where Q1 stock price kind of consolidates and doesn't really do anything, and that lasts through part of May. And then you you see this kickoff right where You have consolidation that's been happening for quite some time, and then you have these catalysts that come in, and then the stock, you know, is off to the races and makes new all-time highs. And so in 2024, obviously that was AT&T, and then shortly, I guess it was a day or two after the Verizon partnership was announced, and then the stock never looked back. In 2025, the catalyst there was that the first one was Trump threatening Musk. Looking to potentially pull his, or he threatened to pull his contracts. And then the other catalysts that were around that period of time in May was AST getting added to the US large-cap Russell 1000 index. Also, the Legato Spectrum term sheet finally got finalized in that month. And then, you know, we signed Vodafone Idea, but there was this whole deluge of positive catalysts that happened. In May, which then caused the stock price to jump in June. Um, let me just take a look at this post that I did. But yeah, so that— we're kind of setting up for something similar, I believe, where— yeah, so in 2025, the stock, I think it bottomed right at the end of May, and it was, call it, somewhere in the, I guess, mid-20s. And then it, it ratcheted up to the 60s, and then it ended up the 60s over July, June, July, and then pulled back a little bit, consolidated, and then hit 100 in October. And so similarly in 2024, you know, the stock was, I guess it was like at around 3 heading into the end of May. And then of course AT&T and Verizon hit and the stock, you know, gapped up eventually to 6, 7, 8, 9, 10, and then peaked at 40, 39, right, over August. And so, you know, obviously there's macro factors to consider, and even if things are going well fundamentally for a company, if there's something like COVID or a potential larger escalation of an armed conflict, that could impact things. But we've been consolidating for quite a while, right? And I think the stock price performance, all things considered has done pretty okay. Um, just given that, you know, we— I would have thought like the stock would have performed pretty well once we had launched, um, Bluebird 7 and that was successfully placed in orbit. And then, um, you know, you, you had an unfolding of that satellite, and then of course the FCC approval came, which, um, we thought was imminent, and then it, it actually came. However, obviously because of Bluebird 7 not Reaching orbit, and then you've had this big pullback in space stocks. That's been hard to overcome, right? And so that's— here we are consolidating, recoiling in April and May. However, you know, we've got these things to look forward to, right? So the first batch shipment, if the company can execute on the timeline outlined, which, you know, is obviously— we got to see it happen. But that would be sometime in mid-May, right? So May 19th. We also have the earnings update on May 11th. And so that will be quite interesting to hear from the company in regards to what they learned from the Blue Origin launch. If there's any updates around some of the government work that we're doing, maybe some performance updates, which, by the way, like I encourage people to send in questions to the company because they are very good at answering them. And so one of the key questions is, you know, what have you learned, um, from Bluebird 6 being the first Block 2 satellite? And, you know, perhaps they can give us additional color around some of the performance metrics, which, um, you know, Abel did disclose at launch that they're seeing north of 150 megabits per second. And so, uh, hearing, hearing an update on in that regard and, um, Of course, we all want to know about production. I think it's important that people level set their expectations because I think, as I've mentioned before, the company, the original guidance was 45 to 60 satellites and then 45 satellites to be launched or to be deployed in space. And then of course, now they're saying approximately 45. The reason why that's weakened is that a lot of it's going to have to hinge on the ability to get Blue Origin up and running again, right? And so in terms of thinking about timelines, um, I think now it's not exactly comparable, but when Falcon 9 had mishaps, um, the turnaround time has been a lot faster. Obviously it's a more trusted and tried form, um, and so the turnaround there for FAA investigations have been approximately 2 weeks and then fixing things, needing a backup, and running has been very quick. But I think Blue Origin, if you guys recall the first, the New Glenn launch, there was an investigation because the booster didn't refire. And so they lost the first booster. I think that took a few weeks and then the fix was maybe a month and a half, 2 months. And so if you think about the turnaround time related to this, and from all indications, it seems like Blue Origin is pretty confident. And what I hear indirectly from AST management, it sounds like they feel pretty confident. I think you could see Blue Origin New Glenn fly again at the earliest sometime in August. And so those that don't know, Blue Origin now has 2 boosters. One is Never Tell Me the Odds, and I forget the name of the second one, which is newer. But now that they've got 2 boosters, if they can get on a cadence of refurbishing those every 30 days, then you're basically able to launch every 2 weeks, right? And so as long as you're building enough second stage NG-2s, then you can launch, you probably get to, previously it was, I think they were targeting 8 to 12 launches this year. They probably are going to get to like, my guess is 6 to 8 if things go well. And You know, what, what does that mean for us? Um, if they can get back online in August, um, then the timeline actually for our launches doesn't change that much. Um, and of course, you know, a lot of things have to go right. And, um, yeah, that, that means, you know, you might ask, well, if they were expecting to launch 8 to 12 and then They're going to launch 6 to 8. Like, how can we get up to orbit with fewer launches? Obviously, we're not taking all those launches because they've got to launch Amazon LEO, which will most definitely be the first launch that they'll do, first commercial launch after the FAA investigation, after they implement fixes. No one's going to want to go on that first one. And so it'll have to be an Amazon LEO launch, but The certifications for Space Force, because that counter resets, they're going to have to get 4 commercial launches in a row successfully done before they can launch any Space Force or government payloads. And so because of that, the manifest is actually going to open up quite a bit. And so out of those maybe 6 to 8 launches this year, we might get a few more, or what would've been essentially the equivalent of what we were going to get if it was more like 10 to 12 or 8 to 12. And so, um, so yeah, I think, I think there's, there's a chance that we'll get to 45, but I wouldn't assume, I wouldn't give that a high probability. Um, what I will say is that the, the next 3 launches are on SpaceX Falcon 9, and those next 3 launches will have batches of 3 each of Block 2 Bluebirds. And so by the time that those are done, Blue Origin New Glenn should be up and running and okay, which will be sometime in August, maybe early September. And so what the timeline could look like is that we've got, we should have a first batch of Block 2 shipment of 3 satellites, call it May 19th. I assume the second batch probably goes out either at the end of May or early June. And then the third batch, again, these are all batches of 3. Third batch is probably sometime in mid-June. Right? And then hopefully, fingers crossed, the fourth batch, which would be bigger, and at this point the company should be hitting on, you know, all cylinders for production, you're maybe looking at the second half of July, right? And so that larger batch would be 6 satellites. And so what does that mean in terms of launch cadence? Well, if those batches are delivered as I kind of laid out, then you're looking at a Falcon 9 launch probably the second half of June, and then a second Falcon 9 launch in first half of July, and then a third Falcon 9 launch sometime in the second half of July or early August, and then your first Blue Origin New Glenn batch of 6 launch, maybe that happened sometime in late August or early September. And so, um, when thinking about the You know, we've been coiling and kind of consolidating for a really long period here. I think Reformed Trader posted something earlier today about how many days it's been. Maybe it's been like 60-some-odd days or something like that. But yeah, we're in this consolidation phase. And once, you know, I think most people agree, like when that first batch shipment goes out, I think it's going to ignite the stock. And then what will kind of take us to the next level will be how quickly the second batch comes. From the first batch. And so, um, you know, the key thing for me in my mind is not, you know, whether we're getting 45, we'll have 45 in space, but more so how much time transpires between batches, right? Because then if you're able to get to a consistent level of cadence, then that's more important to me because then 45 is pretty much like an arbitrary number. Like, well, we hit 45, At the end of December, or it'll be mid-January or mid-February. But once you get that ramped up and going, then that's kind of the key metric for me, which, you know, I think when considering where the company is on production, you know, they're now at what, 32? Well, they're probably more like mid to high 30s now for number of microns that they've built. Although, um, actually I take that back. They've, they've built 30, 32, but then they've, they've stopped. They've paused because then now they're going to shift towards, um, building Microns with ASICs, not FPGAs. And then, um, if you think about the, the rings, they've got, you know, they just got an additional batch of rings, which now they can build up to, I think it's 20 satellites worth. Is that right? There were 7.
[00:16:33] Speaker B: Yeah.
[00:16:33] Speaker C: Yeah. Or they're at number 20, right? And so when building satellites, some actually, one of the interesting nuggets that someone had heard from speaking with a person at AST is that they are actually at a pretty high level of cadence for satellite production. However, there are a few components or things in the supply chain that have been bottlenecks for them. And so that's kind of slowed them down, but supposedly they've solved that. And of course, you know, they had to solve stacking as well. But then, you know, once you build the satellites, you also have to test them at least initially, uh, in early, in the early process. That's right. And so it was interesting because they're in one of these expert network calls. Um, I think this one person had talked about Starlink where they initially had to, and we are probably following a similar path, like you, you test every single satellite that you make in the early batches. Right. And, and, you know, we currently have 2 TBACs. I believe the company has 2 other TVACs that are on the way. These are the large environmental chambers where you can test a satellite for, you know, changing, changing the temperature and kind of running it through its paces and making sure that nothing fails. Um, but in the early parts of the production, you're going to test every single satellite that comes off the factory floor. However, as you get more comfortable with production process and, and if every satellite keeps passing, you know, the test, then you're going to start shifting towards testing them, you know, sampling, sampling, um, satellites. Perhaps maybe you test every 3rd satellite or, or every 2nd satellite. Um, but then once you're through that process and everything's consistent and everything's passing, then you might test like every 10th satellite or every 15th satellite. And the testing process, I believe, is takes about 2 weeks. And so this is part of standing up production and getting to a cadence where not only are you able to produce things faster and you've learned and you've automated things, but then on the testing side, once you're comfortable with the product that you're building, then you don't have to test every single one. You start testing less and then you just do spot testing, right? And so yeah, I think By the time we get to the summer, we should be getting, you know, the 6 satellites per month production cadence should be hit sometime in June. And then beyond that, maybe you start bumping up into 8 territory or 9 or 10, who knows? But I think the company is targeting somewhere along the lines of 12 satellites per month. I'm not sure what additional CapEx investment is required to hit those numbers. But given that, you know, once we finish the Block 1 satellites, or sorry, Block 2 satellites, there will be work underway to start manufacturing Block 3 satellites, which are mid-band satellites, which is a, you know, beyond that, there's also this potential for government shell, which I think, you know, That there were some hints about that potentially in regards to having prototypes and the focus is now building, I guess, what we could call FM-3, like the next generation of this Space Force or, sorry, SDA satellite. But having the ability to build a government shell and if needed, building an ex-US sovereign shell. And so perhaps, you know, you might build another shell that just focuses on Europe and other countries that perhaps want sovereignty outside of U.S. purview. That could be possible as well. So, but yeah, just as a reminder, you know, we did lease additional space and we have, we will have a factory that's solely focused on more automated, more fully automated production of microns. And the other satellites, which I know there was some speculation of when the batch could ship, I would expect that we'll see the first batch ship by May 9th, perhaps— I'm sorry, May 19th, perhaps sometime earlier. But we will get an update as the company posted today that there will be a quarterly update on May 11th. And so So that'll be interesting. Moving on to spectrum. And so one interesting thing that came up yesterday, and I want to give credit to another Smith, when reading the S-band or MSS spectrum order from the FCC, it did look like initially that, well, first of all, whoever has US licensing for MSS, S-band or L-band spectrum, the way that the FCC came out in this order, they pretty much said, if you own rights to S-band or L-band in the US, then we recognize your priority basically to have that access globally. And so to the extent that, for example, for Legato, this is the interesting part. So for AST and Legato, because they have rights to L-band in the US, they actually have priority for global L-band rights according to the FCC, right? And so if you have a constellation that's flagged here in the US and you're a US company and you're doing, with that constellation, you're doing operations here in the US, that constellation will have priority according to the FCC globally, right? Now that doesn't mean like in another country, say like the UK, they have to follow what the FCC is doing. But the FCC will not give you, let's say like if SpaceX wanted to try to operate on the L-band with the existing constellation and they wanted to go do it in Europe, they wouldn't be able to do so because the FCC would say, no, you can't do that with the same constellation. The way they could get around it is they could build a new constellation and then pursue L-band rights in Europe and that constellation would be flagged in Europe and then they would be able to possibly get it. But for all we, you know, as we all know, you want to amortize the cost of a constellation because it's going to be, you know, if it's just operating over the US, that's not optimal, right? In terms of, well, if you only have a constellation that's operating over the US, that is the most profitable The path. If it has no ability to operate elsewhere, at least you're focused on the most profitable market. But ideally, you want a constellation that can obviously serve the rest of the world. That's the most efficient way to do it, right? But in this order, what the FCC said is, if you have the rights here in the US, we will not approve another competitor to go use that spectrum in another country. And so interestingly, that puts Viasat and Inmarsat in a really weird place because they obviously have preexisting rights to use L-band elsewhere outside of the US. Legato has rights here in the US. And then per the agreement that AST Legato entered into with Viasat, they are not precluded from pursuing L-band spectrum globally. Now they do have to coordinate. with Viasat so that there's no interference. However, if you take into account what the FCC ruled, it puts AST and Legato in a really strong position where they are going to go pursue L-band spectrum globally. And the FCC is going to be essentially, the FCC is backing them or encouraging them to do so. If you're in Viasat's shoes and you want to launch a competing direct-to-device Network on L-band, that network, that satellite constellation actually has to be flagged somewhere else. It can't be flagged here in the US, nor can it be used in the US. And so it kind of sets up for a really interesting dynamic here because obviously ViaSat's trying to work with Space42 and they want to build their own direct-to-device constellation. I think there are rumors that they're trying to raise $1 billion to go do that, which we all know $1 billion is pretty small relative to how much investment you need. You know, there's patents, there's all kinds of technology that you've got to develop in-house, maybe work around patents that AST has or Starlink has. And so if you're going to do that and it's just an ex-US constellation, you're missing out on the most profitable market. How does that work? Right? You've got to not only build your own technology, but you're going to operate without the most profitable market. And so what that tells me, and then the FCC, you know, from a regulatory point of view says, That constellation can't be flagged in the US. If you're going to build it, it has to be flagged elsewhere and only operate elsewhere. And by the way, like AST is going to pursue those international rights for L-band. And the only constraining factor is that AST and Ligado have to coordinate with you not to interfere with whatever you're doing, which, you know, L-band and S-band are not really in much use today. These are pretty much virgin beachfront property. And so coordinating around interference is not going to be difficult because ViaSat's not really using it. ViaSat Inmarsat is not really using it today, nor if they can't get a constellation up, then there's not going to be much need for coordination because there's not going to be traffic or any potential interference. And so So yeah, I think, and this is part of, it's important to take a step back and digest some of this news from the FCC. 'Cause I think there are a lot of people who immediately knee-jerk reaction came out with all these different views about what it meant. And even me, like, I'm not a regulatory lawyer. And so, you know, I'll be the first to admit, like, I've had to heavily rely on AI to some extent to kind of parse through it. But But I think, um, you know, the FCC yesterday— this is, and this is an important nugget in regards to S-band. I think initially people were like, well, I think this shuts out AST from S-band. But then, um, you know, that when the order first came out, it seemed to be very broad in terms of how much spectrum of S-band it was covering. And, and people just assumed, well, I guess that's all going to go to EchoStar. But in— there was a change because there was a typo, which another Smith found. And it actually only covers certain parts of S-band. And so the other parts of S-band, the FCC has not ruled on. And the other parts of the S-band is another 20 MHz by 20 MHz of uplink and downlink. And so that could be up for grabs to be used by EchoStar, Viasat, or AST, but it's unclear. But we'll find out. And that's That's an opening wedge. I think it's important to note that, you know, we have Jennifer Manor who's been doing, you know, regulatory policy for many decades. She was previously at EchoStar and obviously knows, you know, how to navigate regulatory waters, and she's been doing this for a long time. So I have the utmost confidence in her that she will help us get to the right place in terms of, importantly for AST, you know, getting L-band access to more L-band spectrum globally, and then potentially getting another 20 by 20, maybe 10 by 10 megahertz of S-band. But it's important to note that this stuff like S-band and L-band spectrum, it's all gravy. Like the key, the core, the key to AST's operations and the core part of our thesis is that we are using terrestrial spectrum, you know, cellular low-band spectrum. So stuff between 600 MHz to 900 MHz, and this is the stuff that gives you great coverage and propagation. Now, initially for service, we're getting pieces of it, maybe 5 MHz here and there, or for FirstNet, it could be 10 MHz or so. But over time, as carriers become comfortable with this service and they see that, hey, AST has demonstrated that they can fill in coverage gaps and are not interfering with existing terrestrial networks, then, hey, you know what? I gave you 5 megahertz in 5 by 5 megahertz in the 800 band. I'm going to give you another 10 by 10 in 700, or, or, you know, I'll give you another 10 by 10 within 800 megahertz. Right. And so as the service gets rolled out and they demonstrate the efficacy of the solution and that people want to use it, It doesn't really cost carriers anything economically to allocate more spectrum to AST, especially again, this is like utilizing spectrum that's not being used in these areas where there's no towers. And so it's kind of like a wasted asset where it's just sitting there, whereas AST can go light it up and then you can provide even better service in these areas that don't have any coverage. And so I think you're going to see that kind of develop over time. And as that happens, regulators around the world are going to say, hey, these guys are, they know what they're doing. They're providing great service on low-band spectrum. Why don't we allocate them some S-band or we'll give them the rights to operate L-band here in our country. And so this is like, this is the long game, right? Like when people react to What you know, FCC comes out with some new order, and then people say, "Well, I guess this is going to determine what how things are going to be for the next 10, 15, 20 years." Well, the FCC excuse me, the FCC changes with every president, right? Whether it's Republican or Democrat, and so leaders might have different focuses, and then their their policies may change, and then also regulators make mistakes, right? And so I think. Supplemental coverage from space is fairly new. It was something that was brought to breathe into life, I think it was in 2023, and it was as a result of AST SpaceMobile creating this market. And then, and of course got more attention because Starlink's like, hey, that's really cool. I want to go do that too. And they announced that they were going to do it in 2022. And that lit a fire under the regulator's butt to come up with a policy framework to enable this type of service. And so as this thing evolves where, you know, you might have some legacy guys like, like BioSat who are, you know, they're losing customers left and right on the legacy fixed wireless side to, you know, serving maritime and airplanes, they're losing to Starlink. And they're like, well, we're going to try to cobble together a 3 or 4 party solution to go attack direct-to-device. We're going to go up against, you know, AST, Starlink, and eventually Amazon, who may or may not do something maybe in 2029, 2030. Regulators are going to see like, okay, well, who actually can deliver the service? Who has partnerships? Who's working with local MNOs? Or is it just a US company that's trying to deliver a standalone service? Like, how is that sold? How is it enabled? There's a lot of considerations, right, that go into regular decisions of who to allocate spectrum to. And I think we're going to see this in Europe in 2027, which is only a year from now, because I think the reallocation of 2 GHz S-band spectrum is going to happen in May of 2027. They're going to see who's been using it, right? And so EchoStar, obviously, they're in a deal with SpaceX and Starlink, and that deal's going to close sometime at the end of the summer of 2027. But the regulator's going to go look at what EchoStar has been doing with that spectrum, which is nothing, right? And so then it will be up to Starlink and SpaceX and Elon Musk to go to European regulators. They might have done that. to say, hey, we're going to— yes, EchoStar hasn't done anything with the spectrum, but we promise we're going to provide service. It's going to be a great benefit to all citizens of the EU. And they're going to have to make their case, right? And Viasat is going to have to do the same thing. And so when that jump ball situation comes, AST will go to the regulators with Vodafone Satellite Connect Europe, Orange, any number of European telcos, Telefonica, and they're going to say, hey, we want to provide this solution. Not only are we going to provide the European citizens, European Union citizens with service in areas where there's no coverage, but then we also are going to provide what the equivalent is of FirstNet here in the US, where we're going to give you the ability to stand up a first responder network in disasters like, you remember, the floods in Spain where all the network infrastructure goes down and, hey, these satellites are going to be able to provide service and help first responders and also victims get the help that they need. Excuse me.
[00:34:12] Speaker A: Sorry.
[00:34:13] Speaker C: And then on top of that, in regards to military communications, we're going to give you the ability to harden communications with warfighter drones, vehicles, all those things. And then these other applications too, which at the end of the day, I'm not sure ultimately, and I can't say with certainty, I'm not sure how comfortable Europe will be in utilizing the same constellation. And that's where perhaps, and this is where AST has prepared for any number of paths forward, but Satellite Connect Europe is going to be a Luxembourg-based entity. It's going to be run and wholly you know, controlled and owned by Europeans, and they're going to have the kill switch, right? But then if that's not good enough, but if AST is at a production cadence of 12 satellites a month, and if, I don't know, if 30 satellites are good enough to cover Europe, um, we'll just build them their own constellation. And by that time, if production is, is humming along, um, it's going to be pretty cheap to do so, right? And by that time, Blue Origin will be at a very steady cadence on New Glenn. They'll be launching every 2 weeks. SpaceX Starship, maybe by that time will be launching on cadence and launch costs. My guess is if those 2 bad boys are up and running and going full bore, I'm going to assume that the market for launch costs, like the bottom is going to fall out, right? Like it's going to be pretty cheap moving from Many thousands per kilogram to perhaps, I mean, I think Starship, they're trying to target somewhere in the hundreds of dollars per kilogram. Um, and so the economics are going to change quite a bit. And so, um, but yeah, this, this news around spectrum, I think, um, it requires a bit more thought and, um, and I think there's, you know, some, some potential constraining factors, but from what I can read, it actually strengthens our hand. In our key area of focus, which is L-band. L-band is like, you know, 1,500, 1,600 megahertz. It's kind of the sweet spot between low band for coverage and mid band, which is, you know, data capacity, having more throughput. So it's lower than where S-band is, which is 1.9 gigahertz to as high as 2.2 gigahertz. And that's where Starlink That is a strategic fit for Starlink because they already, their current satellites, which a former product lead of Starlink said was the current service is shitty. That's where they currently live, right? They actually utilize this one part of spectrum, which is still considered cellular spectrum. It's called the PCS block. It's 1.9 gigahertz and T-Mobile allocated to to SpaceX, they allocated their G block, which is 1.995 gigahertz. And so this is still cellular spectrum, but it is mid-band. And so it doesn't have the same propagation or coverage, but it has decent data throughput. But that's their area of focus. And that's why they're staying focused. That's why they acquired EchoStar. When you look around who who is working with Starlink, it's all centered around mid-band spectrum. And so for those that don't know, you can't build a satellite that can talk, that can basically communicate with all these different flavors of spectrum. There's a specified range depending on the element spacing that a satellite, a phased array can communicate. And so for AST, the Block 2 satellites are, the sweet spot is between 600 and 900 megahertz. For the Block 2 satellites, it will be 1.5 gigahertz to, I've seen as high as 2.4, 2.6, which is a pretty wide range. And then for Starlink, their sweet spot is, I believe it's like 1.9, 1.8 to call it 2.2, right? Their phase arrays are smaller, but they're focused on mid-band. And so that's really good for data throughput, but not good for coverage. And so This whole idea of wanting to use this service in your car or in your home, maybe one room into the house, it's going to be low-band spectrum that gets you that type of service where it's seamless and you don't have to worry about pointing it at the sky. When you're in mid-band spectrum, you might be able to get penetration through a window or some coverage like tree coverage and things like that, but you're going to suffer some level of degradation. a service. And then, and then for Globalstar, which, um, uses spectrum closer to, you know, Wi-Fi, um, then you're going to have issues where you really need to point your, your antenna on the phone close, you know, with open sky and see the satellite unless, unless they develop like high-powered satellites, which, um, you know, for, for Globalstar and Amazon, they're going to be relying on the MDA space. You know, the, the, the next 17 satellites, which are for replenishment, that's the old generation. They're going to develop They're going to launch a new one, which is currently, I guess, being designed. It hasn't been produced yet, the MDA Space Aurora satellite, and they're going to launch 50 of those. I'm not really sure what the specs are on that one, but I do know the phased array is pretty small. So I don't think there's going to be much of an improvement in terms of speed, or there is going to be improvement in terms of speed and capacity because it's just, I mean, it's not 25, 30-year-old tech. It's newer. And, you know, those satellites will be able to do beamforming. And so they'll be more efficient, but it's not going to be anywhere near what AST is doing today or what Starlink is going to be able to do tomorrow. And then beyond that, I assume Apple is going to develop their own satellite at some point in the future. And as we all know, that takes a lot of time. I mean, Starlink announced this initiative in 2022 and they put up a minimally viable product.
[00:40:15] Speaker B: Yeah.
[00:40:16] Speaker C: And, um, they're hoping to get something at the same level of Block 2 satellites sometime in 2029, right? Because they're developing their own ASIC, they need Starship. Uh, there's a whole host of things, right, where they need, need, um, these things to come together in order to compete at the same level, which, you know, they're— I think recently Starlink was saying that they could achieve over— was it with the V2 satellite once it's up and running, perhaps over 120 megabits per second or 130, whereas with our current satellite, we're already, that's just FPGA, by the way, like we're already getting over 150 megabits per second. So yeah, the company's not sitting on their hands. They're going to continue to iterate, right? And this is part of the thing that Cook talked about over the weekend. You can't build a constellation by purchase order. You need to build, you need to have production capacity in-house. You need to be nimble. You need to make adjustments. If something's not working, just like we found out with our composite shells, you've got to fix it. And you've got to then redesign it and send, send those new designs to your manufacturer and have them change it, right? Whereas if you're doing these by purchase order, if you're working with MDA Space, and it's like, oh, you know, the first 10, something's wrong with it, you have to go to them. They have to go through their process. You maybe have to look at the contract that you signed with them. It's like, oh, how much does it cost to fix this or change this? And so that's when you run into, when you're working with a prime, that's when you run into these like massive cost overruns. And of course things taking much longer. I mean, you can see that with ViaSat and their current generation of satellites that they're launching. As we all saw the F3 satellite, it got delayed and I think it's going to launch tomorrow on Falcon Heavy, which would be really cool to watch. But that satellite is, I don't know, it's like several years late and way over budget. And so by doing things internally, you can avoid that. Now, obviously, as we've said before, production is tough and space is tough and you're going to run into problems. But as you run into those problems and you solve them, you get better and things get faster and so forth. And so things come to those who wait. And I think having patience here where the company clearly has gone through production hell and FM1, FM2 stood up, you know, it's helped the company build the machine that makes the machines. We're still going through that, right? And so once that first batch comes out, that'll be a great point of celebration. And then we, you know, even the bigger catalyst in my mind is like when that second batch comes out, it's like, Oh my gosh, you know, that took— I don't know, I'm just making stuff up— that took 15 days or 2 weeks, uh, or 3 weeks for the second batch to come out. And then, then it takes the next batch 2 weeks, and then the next batch, um, well, the next batch it will take a little longer. It'll take maybe 4 or 5 weeks because it's a batch of 6. But I don't know, I mean, at some point you'll get to this, this cadence of 6 satellites per month, and then I'll edge up to 7, 8, 9, 10, and as Scott mentioned, and this is where they're trying to industrialize production. They want to get to 12, 12 a month. And so imagine like 12 satellites a month. That's kind of nuts, right? Like if you get to 12 satellites a month, that's 144 a year. And we have a, for global coverage, you need 90. And so then you start putting in additional satellites for densification, which then gives you MIMO, you know, carrier aggregation, like all these bells and whistles that boosts capacity. And then you start working on, you know, once that initial, call it 60 satellites for Block 2 is up, you're going to start working on Block 3. And then after that, you know, do you build a government shell? Do you build some sovereign shells? At that point, you know, it's instead of looking at, you know, or seeing things as somewhat of an insurmountable wall. It's like, oh, we can go do that. We can. It's almost like now when you see Starlink launching satellites, it's like, oh, every few weeks or days, it's like, oh, there goes another 24. Obviously they've got to put up thousands and thousands and thousands of satellites. So it's a very different problem. And you're seeing that with Amazon Leo where they've, to get to industrial production, it took many years, but they're slowly getting there, right? And So they had 2 launches recently, but we're eventually going to get there. And when we do, that's when— and the important thing is when you start seeing the time between batches gets shorter and shorter, that is when it's game-changing, right? Where you're just on this constant cadence of putting satellites out, producing them, launching them, filling out the constellation, service gets better, and then you start moving on to the next constellation. But yeah, that's, I mean, I think while we're in this period and this is, I think this is important, like for anybody who's invested in the company and, you know, it's like, don't stare at the stock price all day. Like you're, I know it's hard, but, and another reminder, like don't be overleveraged. 'Cause when you have periods like this, this is when people get tapped out, right? Or I see a lot of folks who are on Twitter saying, oh, stock's not going up, I'm going to sell, this is boring or whatever. It's like, well, you're going to miss the move, the big move higher once. And it's not like there's no definable catalyst, like they're right around the corner, right? Now we're at T-minus 2.5 weeks, 3 weeks, right? For the first batch to come out. So, but yeah, it just requires patience. And I think in that, in the meantime, reading more, underwriting, understanding what you own is important. And so going through some of the topics I just covered, I think it's important to just remind yourself what is on, what we're on the cusp of and what it takes to get there. And yes, it takes time. If this stuff was easy, there would be no moat and everybody would be doing it, right? but no one's doing it. It's only, at least for now, and this was like when people had posted it before, it's a very good point. It's like there's only 2 operators that are approved for supplemental coverage from space. That is ASD SpaceMobile and that's SpaceX. There's no one else. Could there be more? Yeah, eventually there might be, but these 2 companies have a lead and it's interesting, You know what, maybe later I'll tweet this quote, but, um, you know, this former product lead at Starlink was saying that, you know, AST definitely has a lead and the key thing is for them, uh, is to hold onto it. Right. And, and this person thinks like there's a viable path for them to continue, continue that. And, you know, this is like someone who worked at Starlink, was in the nitty gritty, um, understood the differences between the architectures and, and where they are. And I was like, yeah. AST is in the lead and, um, I mean, obviously it'll be, it's theirs to lose, right? And so we've got to continue to execute. Um, let me see here. Oh, so I guess that covered most of what I was going to talk about. Um, I don't know if people have comments, which I'll take a look, but, but yeah, I think, um, you know, as we see these Golden Dome awards kind of trickle out, I think the company is expecting more news around that. And so, you know, exactly when, I'm not sure, but we're probably ripe. Let me just take a look and see if anyone has questions or comments. Can you speculate when AST will provide intermittent coverage to the US? Well, I mean, AST could provide intermittent coverage today, but it's going to be very intermittent. Um, it's just a matter of how comfortable are they? Because there's this trade-off, right? Like if you roll out a service to consumers and it is too intermittent, then people will say, well, this is crap because, uh, it takes however long for the next satellite to come overhead. Um, but my guess is to get reasonable intermittent coverage, you're probably looking at, you know, that number of 25 for beta testing where people will understand that. There's not enough satellites up to give you proper coverage, but when you do have coverage, it's good, right? Um, but I think intermittent coverage, you're probably looking at that 45 number. Like, that's going to be pretty decent coverage. Um, and when you're in, in view and, and in service, that's going to be the point in time when, um, they'll probably roll it out and just give the caveat that, hey, this, this network is, is going to get much better as we roll out more satellites, but In the meantime, if you are looking to use it intermittently and when you're off the network, then you can tap into it. Let's see, how many sats do we need to initiate full-scale open beta tests with AT&T and Verizon customers? I think it's 45. I think 25 is more for maybe FirstNet and some early-stage alpha users, but for beta testing, it's probably 45. Can you walk through Farrar's latest FUD around latency, altitude, et cetera? I don't think so because I don't really pay attention to Tim Farrar. For those that don't know, I've dealt with this guy. I've talked with him, dealt with him back in my hedge fund days in 2012, '13, '14. The guy was completely wrong on making his calls around spectrum, for example. He was a big bear on mid-band spectrum, which is the spectrum that, by the way, everyone's fighting over right now. He was saying, he was telling people back then that coverage wasn't good and carriers wouldn't be interested in it. And then of course, a few months later, the AWS 3 auction, or not a few months later, maybe it was like 2 years later, 1 to 2 years later, AWS auction went off and Charlie Ergen blew his brains out, bought a bunch of AWS-3 spectrum for, I think it was like north of $13 billion and AT&T and Verizon participated in that. And obviously everyone laughed at Tim Farr. And then when Straight Path acquired a bunch of millimeter wave, really high-band spectrum, he was telling people like it was worthless. And then AT&T and Verizon got into a bidding war for that company, which ended up selling for, I think it was like the bidding started at $3 $30, or, or sorry, the stock was trading at $30, ended up selling for— gosh, actually I need to go back and look. But, um, yeah, a lot of people lost money on missing out or shorting that name, which he, he was bearish on. Um, let me see. But yeah, Tim Ferriss, um, he's been wrong. He, he was very bearish on SpaceX and Starlink And he was wrong on that. And then obviously since 2020, he's been bearish on AST SpaceMobile. He's been completely wrong. He's moved the goalposts and so they're not going to get financed and then they got financed. The tech's not going to work. It works. And you name it, like he's been, yeah, he's been awful in his calls. And part of his shtick is that he's a consultant. he puts forward like a negative view and then people call him as part of due diligence. They're like, well, why is this guy negative? And then, you know, they pay him a few hundred bucks to hear him out and then they figure out what to do with their lives, right?
[00:51:56] Speaker B: Yeah.
[00:51:57] Speaker C: So Straight Path, as a result of Verizon and AT&T getting into a bidding war, the stock sold for the company, sold for $184 per share. So I think it was like a 300 or 400% premium relative to where it started. But that situation know, Tim Ferriss is bearish on, and he was wrong. But, um, but yeah, I, I, I mean, I didn't say that, um, I didn't mean to be dismissive, but in regards to Tim Ferriss, I am dismissive. Like, I really don't follow stuff that he tweets or says, because when you do, you often lose money if you follow him. And, um, you know, there— it's pretty brutal, but there's, there's been— there were a number of Space Mob investors over the years, um, especially in 2022, '23, '24, where Tim really got to them. He got into their heads and they ended up selling for a loss. And then, you know, the rest is history, right? And so this guy, even, you know, he's— when he's wrong, he never apologizes. Well, never acknowledges he's wrong. And look, I've been wrong on a lot of things, and I'll be the first to say that I am. But even with this FCC approval, which he said, he pretty much was claiming like, it was an impossibility back in 2022, 2023, especially when the SES FCC framework came out, which by the way, like, yeah, the framework came out, there were comments to it. And of course the regulators changed. And, but you know, this guy has a rigid, close-minded approach to things where he's like, oh, I remember very vividly where he's like, well, AST is comprehensively screwed. They'll never get approval. And look Lo and behold, we got approval. But I don't know, I guess maybe I will go back and see what he wrote. But yeah, I don't really have an opinion of what he wrote because I haven't read it. And in some regards, I don't really care. What I've definitely learned is that if you follow Tim Ferriss and his advice, you'll lose money. And then if you ignore him, You, life is much better. So that's, that's how I live. Let me see. Yeah, that's, I guess that's my space. Um, I didn't have anything else to cover, but, um, yeah, it's a tough time right now. I mean, all space stocks are down. Um, all high beta names are down. I think we're still waiting to see what happens in Iran. And, um, but You know, for me, I am just sitting around, sitting around waiting for May because I think May is going to be a strong month of catalyst for the company. And then we've got launch. I'm planning on being down there. Originally, I was selling myself for the Blue Origin launch. I was making excuses why it was going to be too tough to go down. But then of course, when they set that launch date, I was like, okay, I need to be there. And so I went down and met many of you. And so when the next 3 Falcon 9 launches happen in June, July, August, I'm planning to go down there. And then of course for the Blue Origin launch that will happen, I guess it'll probably be August, September, which will be the first batch of 6. Definitely planning on making that. So yeah, there's a lot to look forward to. I think again, in these periods of time when the market's pulling back, and again, it's so important to understand the context where the entire space sector is down, a lot of high beta names are down, but you'll see people post like, oh, the company, there's something wrong with AST specifically. It's like, well, yeah, we lost a satellite, but beyond that, it's a stock and it has beta and it trades with the rest of the sector, it trades with the rest of the market. And so if you can't handle volatility, then maybe it's not for you. Like maybe go buy S&P, go buy some index and not sweat it. Or I guess maybe buy one of these space ETFs like NASA, which has, you know, a stake in SpaceX, which is kind of interesting. But then Then again, and actually, I guess I'll talk a little bit about this too. I think for this upcoming SpaceX IPO, it has been and it probably will continue to be a catalyst for the sector. But there, I do have a little concern about SpaceX just given that all these AI companies and other things are being thrown into SpaceX. So, you know, they made this They have this option to acquire Cursor. Obviously, xAI was thrown in there. And so there's, I don't know, like, is SpaceX really going to be a proxy for space? I mean, it is to a large degree, but then it's going to be saddled with a bunch of this other stuff too. And so if I wanted exposure to space, you know, there's only a few, or there's already existing pure-play companies to do so. And that said, like if you look at Amazon and their recent stock price performance, they've done quite well. And I think a decent part of that is the fact that perhaps people are starting to look at Amazon as having some level of space exposure, just given the most recent deal they did with Globalstar. And then, you know, that deal's going to close at some point next year. But then people now seeing more Amazon LEO satellites going up, it's like, oh, okay, this company, has space exposure. And so how do I price that in? Right. And so I think Amazon's kind of getting the benefit of that, which obviously SpaceX, once it goes public, if it's, I don't know if it ends up at a $3 trillion valuation or $3.5 trillion valuation and the company did $15 billion of revenue last year, that's a pretty high valuation multiple. And so people are expecting a lot from that company in terms of future expectations, which I guess a lot of people on Twitter or elsewhere have a hard time understanding that companies aren't valued based off of historic results. It's about what people expect for the future. Of course, are the future projections reasonable or not? And maybe they're too high or they're too low, but we'll see. But anyway, I'll end it there. Thanks everyone for joining, and we'll catch up again soon. But yeah, in this, in the meantime, if you're having a tough time with volatility, go outside, touch grass, go fishing, go do exercise, do pushups, do the pushups like Cook required. But yeah, don't, don't staring at the screen for minutes, hours, days on end. It's not good for you. So be sure to get out, hug loved ones, go do something fun. There's life outside of staring at stock prices. Take care, everyone.
[00:58:48] Speaker B: Bye.
[00:58:48] Speaker A: 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.
[00:59:09] Speaker B: We're doing something very, And I think with this technology 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 their phone and be seamless regardless of where you are. We don't want you to even know that it's connected by satellite. Our role is to bring this into reality, always in partnership with the animals.
[00:59:46] Speaker A: Listen.
[00:59:54] Speaker C: Mmm, waffles.