Anpanman - SpaceX / Echostar Spectrum Deal - Implications for MNOs

[00:00:06] Speaker A: 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.
[00:00:25] Speaker B: Hey everyone, another, another day, um, to discuss news overnight. Um, also just, um, wanted to— well, I wanted to fire up the space because there were some comments from Elon Musk overnight in regards to his Spectrum purchase. Um, but I also wanted to share some initial thoughts, um, in regards to that, and then Also answer any questions people have, so feel free to ask questions in the comments. I didn't really prepare anything, but just wanted to provide some initial reactions to this interview that Elan had with the All-In Podcast crew. And so for those that missed it, I posted it as a tweet, so you can go back through my profile and see what he said specifically. But Interestingly, he was prompted by the host to give his thoughts on the EchoStar spectrum purchase. And basically, he affirmed that it's a long-term strategy that he wants Starlink to have the ability to deliver high-bandwidth connectivity from satellite to phone. As we all know from a tech perspective, their efforts have had a number of issues operating on T-Mobile, what I believe is 5 by 5 megahertz of spectrum. But this purchase will allow them to have more spectrum to carry that will carry higher capacity. However, as Elon said yesterday, this spectrum won't be available for use for probably about 2 years. And perhaps even longer. The reason why that is, is that hardware manufacturers have to incorporate new chipsets that will have this spectrum working or incorporated into the chipset. So even if you were to fully deploy the spectrum today, you actually need phones that support it, which probably aren't going to be on the market for another 2 years. And then on top of that, You'll need the SpaceX V3 satellites, which for at least currently, the plan, what I understand from SpaceX is that those satellites will eventually be available once Starship is working. And so that's another, I guess, bottleneck for service in that Starship has to get on a successful regular cadence. And then those V3 satellites, which have a larger phased array, from my research, I think that phased array will be about—
[00:03:09] Speaker A: Yeah.
[00:03:10] Speaker B: 5 meters by 5 meters, and that, you know, comparing that to AST SpaceMobile, which is 15 meters by 15 meters, you know, still has some disadvantages. But obviously, you know, Starlink plans to have more of those satellites for coverage. But I think, you know, the EchoStar spectrum does solve some of their interference issues because, you know, it'll be much wider in bandwidth. or wider in megahertz. And so I don't think by moving from operating in a narrow bandwidth to a much wider bandwidth, I think they'll be able to solve some of those interference issues. And so eventually, as we've always said, I think Starlink will develop a robust and decent competing product, but it's going to take some time. I think the other thing that's important to note is that Starlink today and for the foreseeable future Operates primarily just on, or only operates on mid-band spectrum. Today that's 1900 megahertz, but once these new satellites are up and running, it'll expand into 2 gigahertz. And so what that means is that, you know, you'll have capacity and decent coverage when you're outside of a building, or maybe it's a thin building, but, and you know, you'll have decent data throughput, but for actual coverage and penetration through walls and buildings, AST SpaceMobile, the first constellation will be focused on low-band spectrum. And so that's going to be a key differentiator. As most of you guys know, AST, the initial satellites will focus on 600 to 900 megahertz low-band spectrum, which is good for coverage and propagation. And then the second constellation will be focused on mid-band spectrum, which is well, lower mid-band spectrum, which is 1.5 gigahertz up to, as Bell recently has disclosed, 2.6 gigahertz. And so that mid-band shell, which will leverage AST SpaceMobile's Ligado spectrum, that will be, I think you'll start to see some of those satellites deployed at the end of 2026 and that service, the mid-band shell, start really coming into play sometime in 2027. But I think, you know, last night, the comments from Milan were quite telling. You know, he, and this was partially prompted by the host, but you could tell, I mean, some of this stuff is scripted and it's obviously top of mind. I mean, I think it's one thing where SpaceX goes out and with their PR and says, hey, we want all MNOs to, we want to, you know, they underlined in their PR yesterday. underlying partnership, like we want to partner with MNOs, we're going to work with you to deliver this great service to your users. But then I think people in the tech community and people like us who are intimately familiar with SpaceX and their long-term plans and also what this means for the industry understand that this is a true competitive threat for MNOs, right? And so I think as a consumer, for me, I think it's great. More competition is good for consumers generally. So I'd welcome that. But I think for the MNOs themselves, whether that's T-Mobile, AT&T, Verizon, and then MNOs globally, this is a pretty big competitive threat, right? So the vision that Elon was asked about and agreed to is that he wants to have Starlink as a global service without the need for MNOs. And there's a few ways you can accomplish that. I think it's important to, first of all, kind of frame this. So by just having direct-to-cell in mid-band, you're not going to have the levels of performance that you get today with the terrestrial network. This is something that AT&T CEO John Stankey covered in the Goldman Sachs Copia conference yesterday, where he talked about Terrestrial network where you have an abundance of towers that are reusing spectrum and can serve many users, that dense network is going to always have the highest performance in terms of throughput and low latency. And so if you can imagine beyond just the applications that we use today, which are video, email, texting, things like that, when it comes to AI, and other enabling type of technologies where you're going to need high-level bandwidth and connectivity, whether it's drones, robots, connected cars, I think the terrestrial network, especially in dense urban areas, like that's always going to have a huge competitive advantage. But in areas where it may not be as economic to build up towers or it actually makes more economic sense to blanket something with satellite coverage, which by the way is going to get better and better over time. That's where I think, you know, that's where AST SpaceMobile and Starlink come into play. But, you know, today, for AST SpaceMobile and Starlink, you definitely need an MNO partner to not only deliver that service seamlessly to your customer, but then the economics of doing so, whether leveraging an existing install base, having the marketing and sales support. For AST SpaceMobile, that's a very important and key asset, right? Which is why there's this revenue split model with AT&T and Verizon where Unlike back in the day, I'll use Iridium as an example, where Iridium had to build a vertically integrated company from the ground up, and then they had to actually go out and get customers. They had to go spend marketing, sign customers up. They had to develop their own handset, which obviously was a big and continues to be a big problem for them. But for ASTV/Six Mobile, working in partnership with the carriers, that from an economic standpoint and from a go-to-market standpoint is just much more attractive. And doing that in partnership versus competing with them, you know, that is pretty much the game changer in how to deploy this business model. But for Starlink, you know, obviously they are working with T-Mobile today in partnership and, you know, T-Mobile is Actively marketing Starlink's service, even though they do compete today against each other in fixed wireless. But I think the short-sightedness for T-Mobile and the big issue, which I guess, you know, Elon kind of, or prompted by his post, like he basically admitted, is that eventually he wants to go create a service that is going to have its own direct customers that's going to provide You know, high-speed internet at home, which was through their Dish Fates service that everyone's familiar with today. But then in the future, the direct-to-cell is going to be kind of a replacement, or not a full replacement, but a reasonable replacement for the relationship that you have with your MNO, right? And so that's the big competitive threat. And I think You know, when, when he was prompted, when he was asked about what the spectrum means and, you know, he was egged on like, hey, so does this mean that you'll be able to buy a SpaceX phone? And, um, you know, could I just buy my wireless service from you? Um, you know, he did mention, and this is Elon, that, you know, he's not going to put MNOs out of business, but because they own a lot of spectrum. Um, but then. You know, one of the options you mentioned is for Starlink service to basically provide a comprehensive solution. So what that means is like they will provide the wireless internet service for your home. And then when you step outside, they will provide direct-to-cell service. That service is not going to be as robust as a terrestrial service. So my guess is that if Elon decides to really go down that path, he would probably need to Do one of two things. One would be to, and this, this is probably the most likely path, is to develop a mobile virtual network operator relationship with T-Mobile and or perhaps a combination of of AT&T and Verizon if they decide to go down that path. The what? So why would an MNO and and when when we talk about mobile virtual network operators, this is similar to like a Mint Mobile or Boost or someone basically like. Is a brand and marketing arm, but then they actually utilize through an agreement, they utilize the network of somebody else. And the reason why there's like, there could be real value here, or there should be real value here is that Starlink is a well-known brand. Obviously Elon is a well-known brand. Tesla is a well-known brand. They could probably create some type of new mobile service that is, it could be Tesla Phone or it could be Starlink phone or some new entity, X phone, which, yeah, I think there'll be a whole swath of consumers who are very positive of that. And there's probably some people who would never want to use it. But I think if he were to get into a relationship with an MNO, then you could actually see the ability to offer kind of an across-the-board service where you have the internet at home. It's also going to leverage a terrestrial network. And then when you're out of coverage or even when you're in coverage by doing carrier aggregation, you'll have pretty good high bandwidth access on your mobile phone. Now, some might question like, why would an MNO be okay with that? And that's a key strategic question. I think there are clearly, and this is how T-Mobile thinks, there are near-term benefits, right? So if you were to resell, or if you were to provide the facilities to a Starlink MVNO service, you could, you're going to get the economic benefits of obviously, you know, Starlink paying you to use your network. If you think Starlink is going to take market share, I mean, obviously they're going to take some share from your own customers, which is not good, but then they're also, Starlink probably ends up taking some share from Verizon and AT&T overall, if you think that your net loss of customers being replaced by Starlink's ability to go get Verizon and AT&T customers, and then obviously they got some of your customers, but they're paying you a lower margin than you normally would've made, but they're paying you something. If you think net-net that's going to be good, then you might find entering into that partnership attractive near-term. The other thing is that, you know, there is a bit of prisoner's dilemma, right? So if AT&T, Verizon, and T-Mobile are all looking at each other and they're like, okay, these guys, this guy Starlink is going to come in and try to eat our lunch. We can either all decide not to work with them, or if one person cracks and decides to work with them, then the other 2 are kind of screwed, right? And so, so that I think is another competitive reason why someone might decide to go ahead and work with Starlink if they decide to go down this path. On the flip side though, and this is where, you know, a board really has to contemplate what it means long-term. So you're gaining some near-term economics and that will be a boost for, I don't know how many of our quarters, but then over the long run, what have you done? You've actually sold your, you know, a decent amount of the value of your business. You've given it away, right? And so if you can imagine like the negotiations for an MVNO agreement near term where you're just getting off the ground, like it's gonna, if I'm T-Mobile, I'm gonna want the best economics and Starlink's gonna be like, okay, you know what? I'm just trying to get this thing off the ground. Sure. I'll pay you. I'll pay you 70 cents on the dollar, 80 cents on the dollar, whatever it is, right? And then net-net, that's, that's a positive, right? Because you're getting, you're getting a decent amount of your economics back for the customers you lose to Starlink, and then you, you net gain customers from other carriers. And so that looks like a, a great proposition. However, in the long run, if the Starlink service, you know, mobile service gains a lot of customers, um, and becomes large, like a materially large juggernaut, right? So let's say it becomes a credible 4th wireless competitor and maybe in the US, I'm just making stuff up, but like, let's say they get 50 million subscribers. Then when that agreement comes up for renewal, if you're T-Mobile, you lose leverage, right? Because then Starlink can say, hey, if you don't I want to pay you only 30 cents, not 70 cents. And then if T-Mobile's like, no, go screw yourself, then Starlink will say, okay, well, I'm going to go to Verizon or I'm going to go to AT&T and I'm going to go ink this, ink a deal with them. And so basically over time, what you've done is you've sold your business for pennies on the dollar and you become beholden to Starlink. And that's a real That is the fear of, I think, all the carriers right now in that the key, the most important thing is like who owns the customer, who has control of the customer. Like the relationship today that I have, for example, with my mobile carrier, like I pay the bills for them. They're always sending me promotions. I'll upgrade my phones. They throw in like free Apple Music and all this other stuff. But they have the, they control the relationship with me, the MNO, right? And so even though, excuse me, the MNOs, the 3 of them, they basically, sometimes people will joke about owning the keys to space. Well, the MNOs own the keys to wireless mobile access, right? And so everything has to go through them. Apple, to an extent, there's a bit of an uneasy relationship with them when they try to push features or take value or try to own the customers. But at the end of the day, Apple needs the MNOs because they own the customer and they're powerful. Like back in the day when the iPhone was a majority of handset sales, maybe Apple had more leverage, but these days because of Android and Samsung, their market share has gone down. And so Apple's leverage over the MNOs is not as strong as it used to be. But if you can imagine a world where, and this is where the competitive issue really comes to fore, is that If Starlink owns the customer and they provide wireless home internet, that's pretty damn good through their dish service, then that's like a competitive threat. First of all, for the MNOs, for their fixed wireless ambitions, for their fiber ambitions, and then for the cable companies, like that's obviously pretty bad. Not in dense environments where cable is always going to have An advantage, but in the suburbs and those markets, that becomes a problem. But then for, again, going back to the T-Mobile example, if they decide to work with Starlink to be an MVNO, they lose control of the customer, right? And so when you lose control of a customer, then you're not the price setter, you're going to be the price taker. And so that's the Faustian bargain that I've talked about before where T-Mobile was like, hey, you know what? This is sexy. We're gonna add satellite service and we're gonna, we're gonna call it T Satellite and powered by Starlink. This is gonna be wonderful. We're gonna take, we're gonna, we're gonna get a boost in, in what have you done over the long term? Like you're basically spending marketing dollars promoting this competitor that is gonna become increasingly competitive to your core business. It's just bizarre behavior. But I don't know what T-Mobile's board, which also includes Deutsche Telekom, I have no idea what they're thinking. Mike Sievert's the CEO there and clearly it's a very marketing, buzzy, promotional company. And so maybe they thought that trade-off was decent, but they are probably surprised now, right? That Starlink bought this spectrum. They now, they're, they're, I guess their leverage of, for example, by providing Starlink with the PCS-G block spectrum to, to offer service in the US, like that leverage has gone down tremendously. Right. And I think it's very telling, like in the Elon interview last night, when people posited like, oh, is this competitive with MNOs? And are you going to become an MNO yourself? And he basically was like, yeah. Obviously he was kind of put on the spot and I don't think all of it, it was, I mean, clearly it wasn't all scripted, but I think if you were to ask the same questions to Abel or Scott Wisniewski, their first and immediate response would be, no, we are a wholesaler. We partner with M&Os. We go to market with M&Os. We're not looking to compete with them. Like we don't have a, Fixed wireless business that's going to— that's competing with their fixed wireless business. And when it comes to, you know, supplemental coverage and also providing broadband connectivity over satellite, we— that is a go-to-market strategy that is in 50/50 partnership with MNOs, right? Whereas in the Elon interview, he was like, oh yeah, eventually I want to create a global a global wireless service that's going to compete with regional players. And eventually the two options, he said one of the options is to, or the one option I talked about, which is creating a mobile virtual network operator, that's one way to kind of pursue it. The other one, which then the interviewers prompted him on was, would you go, how about just go buy a wireless carrier? Which he was like, yeah, maybe, maybe we could do that. And so I think it's quite telling that, you know, in the responses that it wasn't the friendly, you know, we want to, no, no, we're not looking to go compete directly with M&Os. We, you know, we're partnering with them. That wasn't the response. The response was like, We want to create our own mobile network operator and eventually compete with them and go global, right? And so I think that's, it's at this point, it's, I think it's an existential question for MNOs, right? So, and I think the market, by the way, in regards to AST SpaceMobile, you know, you've got this like knee-jerk reaction of like, oh my gosh, it's Elon, it's SpaceX, you know, how are they going to compete? But it's not as if the MNOs, the incumbents are tiny startup companies. These are like hundreds of billions in enterprise value entities that own a tremendous amount of spectrum, not just mid-band, but low-band spectrum. They own towers. They're behemoths, right? And while some of us loathe like the times when we lose service in certain areas, like the service that they actually deliver to your mobile phone is incredible. Like the value that you get for what you pay. And yeah, not everyone loves their MNOs, but also they couldn't live without them. But I think people are kind of losing sight of the fact that there's like 2, this is straving to be a duopoly, right? There's either Starlink satellite service, which If you're an MNO, you're going to have to make certain trade-offs strategically to work with Starlink. And it's always going to be in the background that Starlink is competing with your fixed wireless business and eventually is going to try to take your customers and basically, to the extent possible, replace some of the terrestrial service that that you're selling versus working with AST SpaceMobile, who is doing that in partnership with MNOs is, you know, we, AST, their MO is like, we want to work, we work with carriers. We're going to provide services that they can resell, low-band spectrum, supplemental coverage, but also mid-band spectrum for augmented additional capacity. Those are 2 very different value propositions, right? And I think as we've seen play out in any number of markets, when you do have high capital intensive businesses that are natural duopolies or oligopolies, those tend to be very attractive, right? And I think today, sorry, not today, but the day that Starlink announced, well, going back to January, the day that AST SpaceMobile announced their Ligado spectrum acquisition, that raised the bar For entry into direct-to-device market. And then of course, you know, Starlink responded by buying this EchoStar spectrum. So, and by the way, like both of these deals are only for the US, right? So as we've kind of conducted our due diligence over the last, I guess, last 48 hours, it's clear that EchoStar, that spectrum is 50 megahertz and it's only applicable to the US. And then of course, AT&T SpaceMobile Legato is 45 megahertz and it's only applicable to North America. And so both players will have to undertake this campaign over the coming years to go acquire or consolidate more S-band and L-band spectrum around the world. And in some of those processes, like it may take some money, in others it's a regulatory review and assignment of spectrum. And we've talked about Europe where in that particular market, I think perhaps Starlink is going to be disadvantaged for when spectrum renewals come up in 2027, just given the politicization of Starlink and everything around it with Ukraine, a focus on sovereignty and defense. But as I mentioned before, You know, it looks like it's shaping up to be a 2-horse race, perhaps a 3-horse race. You know, whether Globalstar somehow ends up surviving or Iridium in a different, in a different, you know, capacity, maybe there can be a 3rd type of player. But I think it's clear that the MNOs want choice. ATT and Verizon even said such. I guess it was like, or Verizon said this 2 days ago and AT&T said yesterday, you know, choice is good. And that's true. Choice is good. And right now there's, there's 2 choices. But then the question remains, you know, which choice is actually positive and an accelerant for your business versus the other choice, which is going to become increasingly competitive and a detriment to your business. And so I think that is the key question. And I think that's something that the market, at least right now, totally misses. And maybe over the coming days, weeks, they'll start wrapping their heads around it and coming to the point of view, which I think we all understand very well, because this is something that we've been steeped in for months, for years, is that AST is a more attractive partner to work with. And so, and there's going to be more than one player. It's going to be a duopoly. There'll be economics that support a duopoly or perhaps 3 players. And so where do you want to make your bet?
[00:28:03] Speaker A: Right.
[00:28:04] Speaker B: And I think the interview last night again was quite telling where Alon said the stuff that everyone's thinking out loud. And so how do MNOs and how does the industry react? I think it's also important to kind of look back at history. Cable companies in the US, they all tried to roll out their own mobile network, MVNO strategies, whether it was like Spectrum or or sorry, Charter or Comcast. They, back in, I guess it was 2010 or so, these cable companies during spectrum auctions, which by the way, like when AWS-3 was auctioned to Dish, who won quite a bit of it, there were cable companies that were also part of that auction as well. And previous to that, cable companies had bought some low-band spectrum because the view was that they were going to try to do They were going to try to bundle service, right? And so back then, the cable companies did end up rolling out a bunch of hotspots. So in major cities, you probably see, you know, Xfinity hotspot or whatever in different, you know, densely trafficked areas. But they thought that they could string together a service that could compete with the MNOs. And of course, the MNOs decided to help facilitate that through their virtual network operator Agreements, but the cable companies bought their own spectrum. They thought, well, maybe eventually I'll build some towers and roll out some of that spectrum, but at least I'll put a bunch of high, you know, Wi-Fi hotspots around them, dense areas. And then I'll launch a Spectrum, for example, branded mobile service, which will be cert— the actual underlying facilities network will be Verizon and AT&T. The reason why the cable companies wanted to do that is that they wanted to get more customers, reduce churn through bundling, get more customers. But the issue is that that service never got off the ground because cable companies, as we all know, the customer service is notoriously bad and people just have bad experience. Like cable companies legitimately probably have the worst customer service. It's something again that we all rely on, but the outages and the customer service make it painful. But I think I think consumers were turned off by that, right? Because they were like, okay, I really rely on my wireless service. Do I really want to deal with cable company customer service for that critical service? And the answer was no. And I think also, you know, I personally never tried out any of the wireless cable company or wireless services provided by cable companies because I I just had too much fear, but I think the integration was clunky as well. And so I'd be curious actually if anybody listening to this does have or does get their wireless service through a cable company. But each of the cable companies were able to get a few million in subscribers, but I think for all intents and purposes, that was kind of viewed as a failure. And so cable companies actually did turn around and they ended up selling their spectrum back to MNOs or And decided to, I guess, not pursue actually building out towers and truly competing head-to-head with MNOs. But that just goes to show that even in that situation, the MNOs were willing to provide their infrastructure as MVNOs to the cable companies. Because I think the MNOs knew back then, even though they might take some share eventually, that the economics were attractive and they knew that they wouldn't be able to compete with them. And so they were comfortable with that. But I think, as I mentioned before, Starlink is a different animal. And so it has a good reputation in terms of branding, and obviously there's the Tesla and SpaceX halo effect. And so I think the question for MNOs working with Starlink is a different calculus, right? Because I think just from a brand perspective, it could be viewed as much more attractive for consumers versus a cable company. And so yeah, there's a real competitive threat there. And as I mentioned before, over the near term, an MNO that works with them, the economics might be attractive, but over the long term, you end up losing control of the customer and you probably end up getting becoming a price taker and getting worse economics. The other thing that's really important in all this discussion is the handset guys, right? And so Elon has toyed with the idea, at least, you know, talked about potentially having X phone or SpaceX phone or Tesla phone, whichever brand you want to slap on it. But if Elon does end up owning the customer, then why wouldn't that customer be willing to buy a phone from them, right? As long as it's good enough, or maybe it's going to be really great, who knows? But I think for Elon, if you can imagine like putting, having an X-branded phone that comes with all the apps already installed and runs XAI and maybe has great integration, you know, you drop it, you use it in your Tesla car and it's like fully integrated. There's a lot of interesting things they could do with that, right? But on the flip side, like if you're Apple or you're Samsung, you're probably shitting your pants, right? Because that's your bread and butter business. And then what if Elon comes in and tries to, you know, take control of your customer? And then, and it's not just about the hardware, right? For Apple, it's about services revenue. It's about the App Store. It's about, you know, selling iCloud subscriptions. It's about all those things. And so, I think what people kind of lose sight of is that it's not just mobile phone service. Like obviously the network is important. It's not just the handset hardware is important, but it's the applications on top of it. Right. And so for Elon to sell more X subscriptions to get people to use and, you know, XAI and, you know, that will be more data fed into his, the learning algorithms and I mean, there's a whole host of implications, right? And so it's not just an MNO problem or a handset problem. It's also like a complete vertical stack, right? So, and this is where other companies come into play, whether you're talking about Microsoft or Amazon or Google, you know, is it the Elon stack or is it going to be the open stack of various companies working together, which I think that's where AST SpaceMobile fits in. But yeah, this is a much bigger strategic question than just AST SpaceMobile, than MNOs. It's broader, right? So it's the tech ecosystem. And so that's why I think AST plays a critical role, right? Because satellite coverage today, the way that we think about it, it's very simplistic. But if you think about it over the long run, like, you know, MNOs say, hey, we've got 99% of the population covered. Yeah, you do where they live, but in terms of geography, only 50 to 70% of land is covered, right? And so when it comes to drones, autonomous vehicles, trucks, anything, you're going to need to have coverage, 100% persistent coverage all the time for data. And some of that coverage will need to be It's okay if it's low data throughput coverage, high latency, but probably for a lot of these apps, you're going to need high throughput and low latency, right? And so that's where having a service like AC6 Mobile where it's true broadband directly to any compatible 3GPP device, that's going to be important, right? And so As you know, we've got these satellites that are on the cusp. I mean, it's imminent. We'll see when exactly when they launch, but you've got broadband connectivity that's going to be rolled out in 2026. Whereas, you know, Starlink, this spectrum is going to be a game changer for them, right? Like they are going to have some level of broadband connectivity, but you're probably looking more at 2027, 2028 when it gets rolled out. So So there's going to be a time, there's going to be some time before that actually happens. And by the time Starlink rolls out satellites that support this spectrum that they purchased, that should be around the same time AST's rolling out its mid-band constellation, which will have the Ligado spectrum featured and any other additional L and S-band spectrum that they procure around the world. But yeah, I mean, this is why I've kind of, I kind of go back to the whole thought and idea that, you know, and this is why Google made a strategic investment in AST SpaceMobile. Like you need to have an open ecosystem that is not going to shut down, be a walled garden to your apps. Right. And that's why I think eventually, not today, Not maybe in months, but eventually I think Apple, Amazon, I think all these players, Microsoft will make or will contemplate making an investment in Base DSpace Mobile because you need to have an open environment for their apps to run on.
[00:37:58] Speaker A: Right.
[00:37:59] Speaker B: Because I think eventually Elon will have his own stack, right? And it's going to be valuable and some people are going to use it. But for other companies, they're going to want something that's open. And so that's why I think there's this tremendous value for AST currently because it's enabling 70% of the market share, MNO market share in the US, but also globally. We've got 50 mobile network operators around the world. And so maintaining that level of openness, I think is important. And it's not just for consumers, right? It's also for governments. For first responder networks, but also for defense applications, right? And so I think, as we all know, you know, when Elon had a, I guess, when he had problems with Trump and threatened to pull NASA missions and access to the space station, I think that gave the US government a huge about a wake-up call that, you know, you can't rely on one company or one founder or one person in particular for all your critical needs. Like you actually need to have dual, maybe triple sources of, or providers, right? So whether that's launch, whether that's communications, imaging, any number of things, right? You, and I think of course, as Europeans found out when Starlink was cut their service over Ukraine, they themselves want some level of having sovereignty and control over these assets is important, which is why AST developed the joint venture SATCO with Vodafone, where Vodafone's leading that venture in Europe and where you've got 21 member countries, MNOs that operate in those member countries that aren't Vodafone have indicated interest of signing up for that service. And so this is all important stuff. But yeah, I think for the handset guys, like this is not only for MNOs, but the handset guys, it's an existential question of how far does Starlink go? And in order to counterbalance that, who do you work with? I mean, at the end of the day, like this isn't winner take all, right? It's going to be just like any market. Windows, Mac, you know, Samsung, Apple, you know, who do you want to work with, right? So you can either work with Starlink or you can work with AST SpaceMobile. It's, I think it's like pretty simple or straightforward. I think the market today is pricing in or is worried because of uncertainty that perhaps Starlink is going to be winner takes all. But I think as we know quite well, It's going to be a 2-horse race and these companies will have to pick which side they work with, right? I guess the other thing I would say about handsets is that it's not an easy thing to do, right? So for those that remember, Microsoft tried to create their own handset and that failed. And, you know, but then even putting forward the most consumer-centric company in the world that's done quite well, Amazon. Amazon tried to come out with their own handset and there were rumors that they were going to enter into MVNO relationships with carriers and come out with their own handset. Of course, that never came to fruition because it was just too tough. And so these are interesting ideas to talk about and the potential is obviously there, but we're pretty, I mean, we're, there has to be a lot, multiple steps to get there. And then even then there's no guarantee of success if Starlink decides to go down that path. But anyway, I think these are all important topics that the investors, institutions, but also street analysts, like they'll start writing about. I mean, I saw some of the initial reports From a few banks that were saying like, oh, this Starlink service, this doesn't mean Starlink's going to compete with MNOs and it's going to be complementary. And yeah, that's the, guys, that's the official line, the PR. Like I read that in Starlink's press release. We want to partner with MNOs and it's going to be great, hunky-dory. But I think when Elon spoke with his buddies at the All In podcast and Everybody in tech is thinking it. It's like, oh, eventually he wants to compete with MNOs. He wants to eat their lunch. And so that's something I think the Street will eventually start figuring out. And once it does, that's where you're going to see this change. Because, you know, the EchoStar deal, I think, validated AST SpaceMobile's Legato spectrum strategy. It validated, obviously Starlink getting into direct-to-cell in general validated the market that AST created. But now, you know, now that the chess pieces are really, now we're in full swing, right? Like before, if I could, the analogy would be that we were playing a traditional chess game of where each player gets 2 hours to make their moves. But now we're entering into speed chess.
[00:43:36] Speaker A: Yeah.
[00:43:36] Speaker B: Not blitz yet, but maybe each of the players gets 30 minutes. But eventually, as things are evolving, it's going to be a game where players get 15 minutes to make their moves or 5 minutes. You know, it's going to be rapidly evolving. And I think now we're seeing, especially on the cusp of AST SpaceMobile launching their network with the multi-launch campaign, you know, we can debate whether that's going to happen in October or November, but you're going to have this launch cadence that just starts going into full swing, I think it's going to focus people on the real strategic issues here, right? And who are the winners and who are going to be the losers? And I think, to me at least, it seems crystal clear that AST SpaceMobile is going to be a huge winner in this, and they're going to facilitate for people who want an open environment. And then there's going to be Starlink, right? That's going to eventually kind of try to push this vertically integrated stack to consumers and compete with MNOs. And so I think, you know, the market to a degree, at least maybe investors don't fully understand that, but MNOs understand that. I mean, as I've driven home the point many times since Starlink announced their service that they were going to pursue this business back in August of 2022, You know, their first customer was T-Mobile, and since then they've only announced 7 others, right? So they have 8 MNOs working with them globally, which represent, I think, like 270— no, I forget the exact number, but around, let's say, 250 million subscribers. Whereas AST, since announcing their plans back in 2020, they've signed up over 50 Global MNOs representing over 3 billion subscribers, right? So I think the MNOs for the most part know what working with Starlink means for them, you know, from an existential threat standpoint. But I don't think investors know that yet, and eventually they will in the coming months. So anyway, let me see if there's Some questions here, which I'm trying to cover. What's the over-under on how many times CNBC can mention space-based direct-to-device broadband without mentioning AST SpaceMobile? I like that rhetorical question. I think, yeah, I hate to say it. It's like, I sound like a crypto bro, but we're early. I think there's more awareness about AST SpaceMobile now, than clearly there was a year ago. But now you're going to have this whole deluge of articles that are written about what Starlink is doing. And if those journalists do their job and they dig around and they see who the other players are, I think you'll, in a positive way, you'll see more awareness about AST SpaceMobile. But obviously it's going to take people some time to get over the hump of like, well, it's SpaceX. So Clearly they're just going to own the market like day one and there's going to be no room for anyone else. I think it's for obviously the people who dig a little deep and peel back layers of the onion will recognize, realize that, oh, AST has a technological lead and has all the right partnerships. And so they're going to be very formidable, right? And Starlink is catching up. They've been catching up since the beginning, whether that was entering into this market after AST did and buying Spectrum after AST did. They're kind of like the me-too company, I guess. But yeah, sometimes it takes the market time to recognize that, which I think, as I mentioned before, it's going to take time for the stock price to kind of settle out on churning investors who are worried versus people like us who see Tremendous opportunity, right? But yeah, well, we'll see if the mainstream media figures it out. You know, I don't, I would expect them to eventually, but, but we'll see, especially, well, I take that back. As AT&T and Verizon crank up the marketing as they should, perhaps that's going to change. Let's see. Philip Rye. T-Mobile cannot abandon Starlink yet. Verizon, who hasn't committed to anyone yet, could just take its place. Prisoner dilemma. T-Mobile wants to be taken over by SpaceX. It should be talking to AT&T and AT&T to ensure a spot at the table or bail later. Uh, I, okay. Uh, T-Mobile can't abandon Starlink. I agree with that. They can't abandon them yet. Um, but at some point that relationship is going to become pretty tenuous. Verizon hasn't committed to anyone yet, could take its place. That's not true. Verizon. So it's kind of funny. It's like news of the spectrum purchase makes people immediately flip the table and think like, what has happened strategically is irrelevant now. I think people lose sight of the fact that we just had our supplemental coverage from space application that was jointly submitted with AT&T, Verizon, and FirstNet. That was just accepted on Friday of last week. And so I think people, you know, in the heat of the news forgot like, oh, Verizon is an investor and they've given us prepayments and they've contributed their 850 MHz spectrum and we have application, you know, a spectrum leasing agreement with them and we have an application at the FCC for full commercial service. So I don't think that's changing. If you're asking the question of if Verizon could act as an MVNO for Starlink, yeah, I think they could. But I think at the same time, again, going back to the long-run implications of that, do you want to give up your customers to Starlink in exchange for some near-term profits? If I was a Verizon board member, I would say no, but I'm not a Verizon board member, so who knows? But yeah, I think, and by the way, like this whole idea of SpaceX buying a wireless carrier. So let's go down that path for a minute. So let's say SpaceX decides like they need to own wireless companies because obviously in order to access low-band spectrum and built-out towers, that's what you have to do. So I think what SpaceX, let's just say it's worth $400 billion today. Clearly they don't have cash to go pay all cash for a wireless carrier because even in the Spectrum purchase, they had to issue stock. But T-Mobile, just to give you an idea, enterprise value today is $377 billion. So you're looking at basically a merger of equals, right? And then Elon, through that transaction, would basically have to give up control of SpaceX. So I don't think that's possible. But let's just run through, let's just say like it is possible that somehow SpaceX is valued at $1 trillion tomorrow, right? And so then they're able to pay a reasonable acquisition premium for T-Mobile. And by the way, like private valuations are very different than public valuations. Like I think I would argue that SpaceX, their valuation is probably somewhat frothy, right? But let's say they If you're a T-Mobile board member or Deutsche Telekom, which owns just under 50% of T-Mobile, like, are you comfortable taking SpaceX paper, like stock? Or it, I kind of joked about this before, but it's almost like back in the day when AOL, when their stock was like highly inflated, they went on, acquired Time Warner. And then of course, you know, they issued all stock. And then of course, when the internet bubble burst, like that, the combined entity completely cratered and it was hugely value destructive. And then Time Warner ultimately ended up selling AOL to, I think it was Yahoo for pennies on the dollar. And they, you know, that was like a whole crazy situation. But yeah, if you're T-Mobile, do you take SpaceX paper? And then if you're a SpaceX shareholder, like, do you want to own an MNO? And this is just for the US. Obviously, the US is like a very valuable and important market. It's the most profitable market. And so owning an MNO here is not a bad idea if it's truly an important stepping stone to what you need to do over the long run. But I would argue for SpaceX who wants to get to Mars, like, yeah, cash flows are important, but owning an MNO maybe isn't the best way to get there. Like you can get a lot of the benefits by partnering with MNOs to the extent they want to partner with you without having to own one. But let's just say you decide to buy T-Mobile and for all intents and purposes, Elon loses control of SpaceX because you have to issue a decent amount of stock to do that. Then what do you do next? Right? So Then the rest of the MNOs around the world are like, oh my gosh, this guy bought T-Mobile. It looks like he wants to compete with us. So what do we do? Maybe they do work with him or maybe they don't. But then if Elon does want to, or SpaceX, if they do want to continue down that path, then you basically have to go buy a mobile network operator in every market. And that's not cheap at all. And then on top of that, are regulators comfortable with that? Let's say US regulators are okay with you buying T-Mobile. Are they then, or would a European in the UK, would they be okay with a US MNO buying an operator there, especially given how things quickly change politically in the US landscape?
[00:53:47] Speaker A: Right.
[00:53:49] Speaker B: So yeah, there's a whole host of, you know, that first step seems interesting, but from an economic standpoint, it would be very expensive. There's control issues. But then once you kind of take that first step, how do you parlay that into buying more network operators around the world? Or maybe you don't, right? Maybe you just partner. But anyway, there, obviously it's a very complex issue. You know, people on Twitter may just kind of throw around Oh yeah, he can just go buy this and everything's solved. Or people on the guys on the All In podcast were like, hey, that sounds like a great idea. Just whip some money around and it'll happen. It's not that easy or straightforward. So there's a lot of things to think about. Let's see. Please compare AST and Starlink as DoD PNT IoT potential solutions. Yeah, I mean, Starlink is already doing some of this stuff today with Starfield and their constellation. What differentiates a C-Series mobile is that it is, it has a differentiated large phased array that can do very specific things better or uniquely do them that Starlink can't. And, you know, Katya has written in depth on this, but as the company mentioned, there's like 10 unique use cases already that are non-communications use cases. So I think the relevance, and this is the part where we can hem and haw about the commercial side of the business and who's going to win and how quickly it's going to take. But I think on the defense side, I think it's, I think here, and by the way, for the $50 to $75 million of revenue that we're expecting in the second half, I think that seems like it's in addition to gateways that are being sold for commercial service, a decent amount of the revenues are defense related. So And as we've, you know, as I've talked about, uh, I think the US government wants more than one supplier to rely on, um, especially, you know, suppliers that are closely held, um, by a specific founder who might be political, like, you know, that, that could be an issue, right? So, um, so I think, I think AST is well positioned for government and defense business. Um, and I think given The events that unfolded between Elon and Trump over the last, the previous months, I think that is more important now than ever. Let's see, some of these questions I've already asked. What are your thoughts on launch? Yeah, I mean, there's some people who I guess are newer to the situation who are like, well, what if SpaceX just shuts down? Doesn't launch any satellites for AC SpaceMobile. That's not how it works. Like SpaceX is a, you know, Starlink is a separate division. SpaceX launches different. As we've emphasized over and over and over again, SpaceX has and will continue to launch competitors' satellites, right? They launched all OneWeb satellites, Globalstar, Iridium, any number of competitors they've launched. When people make the point that perhaps there are some potentially nefarious things going on, I mean, yeah, eventually there could be, but we also have these things called antitrust laws in the US, the Glass-Steagall Act and Clayton Act, or sorry, not Glass-Steagall, that's for banks, but the Clayton Act and Sherman Act. And so in the US, there's the rule of law and I think if SpaceX were to do things that were anti-competitive, then that would just tighten concerns from the US government, but regulators, but also from defense side as well. And so I think you've seen, and I have a tremendous amount of respect for SpaceX, like you've seen them act in a pro-competitive manner because ultimately they want to make money and fund the mission to Mars. And so launching satellites is their business, right? And so if you start shutting down access for some of your customers, then perhaps other customers won't be comfortable in using you. And then, you know, obviously there's Blue Origin, there's Rocket Lab, there's any number of companies that are looking to get into the business. You don't want to enact an anti-competitive manner that ends up fueling the launch businesses of your competitors, right? So there is some rationality to working with competitors because it's not the only thing you're doing, right? It's not just, It's not as if SpaceX is just focused on Starlink. Like they actually are focused on launch and getting Starship working and eventually sending missions to Mars. So I think it's, you know, I think from a launch perspective, at least from what I can tell, I don't think there's any issues there. Let's see. Let's see the other questions here. Just to confirm, let's see. Just confirm Starlink's newly acquired spectrum requires chip modifications. Yes, that's right. Legato spectrum can be utilized with current phones, correct? I'm not sure. I think Legato is in some phones. I don't think it's in all phones, but I think, I mean, I think for both spectrums, like they will have to be Included in chipsets, right? And so for Legato, from what I understand, I think it's further along. And so you're going to start seeing those phones that can utilize the spectrum sometime in 2027 as well. But that's when the constellation will be up and running. And so I guess taking a step back, it's important to note that Currently, AST 6 Mobile, the plan is to launch their Bluebird Block 3 Bluebird satellites, and that is imminent in terms of deploying that constellation. In particular, that constellation works with 600 to 900 megahertz low band spectrum, which is incorporated in all phones today. The service is compatible with phones, unmodified phones that you use every day today, right? So that's That's one kind of piece of the puzzle. The second piece of the puzzle is this whole deployment of mid-band spectrum, which is for AST SpaceMobile, it's Ligado. That's their own spectrum. And then for Starlink, that is the AWS-3 spectrum. That, that's, those 2 spectrum bands in particular are going to be rolled out in mobile phones sometime in 2027. I think from what I understand, I think Ligado is is ahead of the curve on that. But yeah, I mean, that cancellation is not gonna be up and running until sometime in 2027 anyhow. And so that, and that's for both AST and Starlink. The other thing I would mention is that there is other mid-band spectrum that's cellular-based that is not MSS. And so carriers today do use spectrum in 1.7 all the way to 2.6. gigahertz that is not MSS. And so to the extent that AST gets additional MNOs that want to deploy this service on their cellular spectrum in those frequencies, they will be able to do so when that mid-band constellation is up. And conversely, for Starlink, to the extent that there are MNOs that want to work with them that want to bring their own spectrum to the table for supplemental coverage or perhaps primary coverage, they can do that as well. So it's this spectrum in particular, it needs chipsets and it needs a new satellite. Same goes for AST. But then beyond the spectrum, carriers that do bring mid-band spectrum to the table and say, hey, I want you to light this up, they both can do that too. Let's see. Could OmniSpace S-band be a significant piece of the puzzle here? That's a good question. I'm not sure. I think OmniSpace is this like paper constellation company. They have some spectrum rights, like I think in South America and other places. Maybe they get acquired, maybe they lose their licenses. Maybe, I mean, as I've discussed before, like SBAM, it's kind of like a backwater where none of these licenses are, a majority of places they haven't been assigned. And so I think as you see this market develop into a 2-player race, maybe a 3rd player shows up, you'll see regulators probably allocate sections of S-band to the various players, and then that's just kind of how the market's going to work. To the extent someone already owns rights, then they'll need to either, perhaps they might be acquired or they might enter into some partnership with AST or Starlink, right? So That's potentially how things could go. Is there a realistic path for T-Mobile to leave Starlink? Yeah, I think there is. I think there's a year of exclusivity, right? So probably sometime in 2026, T-Mobile could leave Starlink and then join AST SpaceMobile. From what I understand, I think AT&T has exclusivity with AST SpaceMobile in that AST cannot use anybody else. But Verizon is, Verizon has, they have the ability to potentially work with others. So that's the reason why, for example, they work with Skylo today for simple texting with their Geo service, but then they also work with AST SpaceMobile. So you could see a situation where T-Mobile drops Starlink and moves over to AST. I guess the question is like, would AT&T and Verizon be okay with that? Which I guess prior to Starlink buying Spectrum, they probably were not okay with that. But then with Starlink buying Spectrum, maybe they will be okay with that. Maybe it's important to have a unified competitive balance, counterbalance to what potentially Starlink ultimately will try to do. This question also brings up a fun point. which is that Skylo, this Skylo is basically like a middleware company. They provide software and it's incorporated into devices where they can allow for newer phones that have strong antennas, geo-satellite connectivity. I think it's like at most a few hundred, 60, 70 kilobits per second, truly text messaging and reportedly, I think they have some algorithms where they might be able to do some level of voice. But Skylo, for all intents and purposes, is the reseller of GEO satellite services. So Skylo works with like Viasat, EchoStar, Ligado, and a few other players, and they aggregate those services and provide it to, for example, Verizon offers it on a few of their phones today. What's, I guess, strategically interesting for Skyla is that Legato is being bought by AST Space Humboldt. So Skyla becomes a customer of AST and then MicroStar, the portions of the satellite spectrum that I think are potentially going to be utilized. And I'm not sure, I've got to dig more into this, but yeah, I mean, perhaps Skyla will become a customer to a degree of Starlink. And so, um, it's kind of like the Office Space movie where the guys are interviewing employees. They're like, so exactly what is it you do here? And for Skylo, it's like they're a middleware guy, kind of shuffling papers from one end to another. Um, I don't really know what ends up happening with that company. Um, 'cause they, they don't really own anything. They're just kind of a middle layer.
[01:05:57] Speaker A: Yeah.
[01:05:58] Speaker B: To enable connectivity. But anyway, let's see. When are we launching something? That's a good question. I mean, the satellite's ready. There's speculation as to—I mean, there was like this presentation from ISRO yesterday saying that, and I think it's probably wrong—is my guess. But they. They've said like the launching of FM-1 is going to be in September. I guess it's possible, but my guess is it's probably more like October. And then you've probably, our guess is like you, FM-2 will get launched either on Blue Origin or SpaceX as a, as on SpaceX as potentially a rideshare or a Blue Origin as part of one of the test launches for New Glenna.
[01:06:49] Speaker A: Yeah.
[01:06:51] Speaker B: But yeah, once that starts, then you kind of kick off this campaign of every 1 to 2 months, right? And then you're going to be hurling batches of 3 to 6 to as up to as many as 8 of these things, Block 2 satellites into space. And so that's when we start cooking, folks. So, but yeah, I think obviously the market is waiting impatiently. For when we get an announced, or sorry, a launch window. As we all know, like when you're, when you go for launch, you'll get some kind of range and then it gets narrowed and you get closer and closer. And then obviously everything's kind of subject to conditions, whether that's weather or other things for launch to go off. But I think it's soon, probably needs to happen sooner for a lot of people who are nervous for me. I'm okay. In my mind, it's going to happen and the rest of them are going to happen. So I'm okay with days, a few weeks. I mean, we'll see. Any Golden Dome updates? No Golden Dome updates, but I feel pretty strongly about it, as do others. And just based off of due diligence, whether it's just kind of reading the tea leaves from management commentary or discussions with them and kind of reading the body language, but then also due diligence with people who are familiar with Golden Dome or contractors, things like that. It seems like it's going to happen. So the question is timing, right? And just given that Trump wants Golden Dome to be active and deployed before he ends his term, which is You know, a little over 3 years from now, that's not much time. And so things start, they start, you know, they need to ha— start happening now. And so I think in terms of awards and some of the winning, I think some of the initial awards from, and I forget exactly where this came from, but I think we might start seeing something towards the end of September. And so, you know, whether AST is part of that, initial award or maybe subsequent ones, who knows, right? But I think given the unique capabilities of the company's satellites, I think will be a key part of Golden Dome and/or other defense initiatives, whether with the SDA or DIU. It seems like every day there's new articles talking about adjustments to these programs or some things are getting boosted, some things are being deemphasized. But yeah, we'll see. I mean, we've got As Scott mentioned in his call last week, we've got a number of programs of record with the Defense Department, or I guess Department of War now, which, you know, programs of record have the opportunity to grow into hundreds of millions of revenue each annually. So that's a big deal, right? And as we know, the US government, they want more than one supplier. They want They want 2 or more, possibly even, um, because they don't want to rely on a single point of failure or a single person, right? So, so that's important. Um, let's see. I think that's probably most of the questions. I've been rambling here for a pretty long time. Uh, oh, there's some more questions. What is this? I think that's pretty much it. Um, someone did ask like, what's the difference between Legato Spectrum and The AWS-4 spectrum. AWS-4 is, depending on if it's downlink or uplink, it's like 1.9 to 2 GHz. And then for Ligado, it's 1.5 to 1.6 GHz. And so AWS-4 is kind of more mid-band. Ligado is lower mid-band. And so lower mid-band, you know, you'll have Greater propagation and coverage, mid-band, you know, there might be slightly better capacity. But I would say on the Legato side, yeah, I mean, there's some unique aspects there that will give, I think, give AST some advantages. You know, I think the Department of Defense or Department of War already has some applications working in and around that spectrum. And so perhaps ASTs can be well positioned for some of future applications around there. But for all intents and purposes, one spectrum has slightly better coverage and the other spectrum has slightly better capacity, but we'll see. I mean, the other thing I would say is that there have been some interference concerns in the past around Ligado, which is why AST The Legato spectrum, which is why AST was able to acquire that spectrum at such a very reasonable price, or actually very low price. That said, low price meaning low upfront cost, but then there is a revenue share agreement with Legato stakeholders. So clearly Legato stakeholders see tremendous value in the use of the spectrum and the economics of it. So they're participating in some of the upside. But yeah, originally Legato the folks who own that spectrum, which is Ligado stakeholders, they wanted to try to roll out a terrestrial-based wireless service. And so, and there were some concerns around interference. This originally was intended for mobile satellite service usage. But yeah, there were some interference concerns from a number of groups that expressed concerns. And so By AST stepping in and picking up the rights to this spectrum and using it for what was originally intended, which is satellite terrestrial service, I think, and especially with the architecture of AST's space mobile satellites, you're able to basically assuage and overcome any of those interference concerns. I think the value of the spectrum in the hands of is C-Space Global is pretty tremendous. As I've mentioned, I think Lugata Spectrum's probably, you know, the company will tell you in their bankruptcy that the spectrum was worth, I think like $33 billion or so. And that's obviously like full ownership, right? Like we just have usage rights for 80 years. But, you know, I think conservatively that spectrum, if it's put to proper use, like it's probably worth $15 to $20 billion, right? And AST SpaceMobile, who owns those rights, the rights to use this spectrum for 80 years, you know, you're looking at a market cap of $13.5 billion. And so actually it's less than that. Sorry, enterprise value, $13.5 billion. So if you buy AST SpaceMobile today, in some of the parts valuation, you're basically getting, you're getting Leonardo spectrum And then you're getting the rest of the business for free, which is kind of crazy. But that's the market, right? That's how the market perceives things right now. I guess you could kind of say like a few months ago the market was like, hey, this is great. You got Legato Spectrum and the upside of the commercial and defense business. And so we're going to value, we're going to ascribe a value of $60 per share, right? And then today they're saying, okay, the value of the business is only worth Legato. So the rest is a goose egg, which is quite funny. You know, I joke like if you're a deep value guy or growth at reasonable prices, like you should be looking at AC SpaceMobile. So anyway, I think I'm going to pause there. I've been going for, I guess it's an hour and 15 minutes. That's probably more than you guys can stand and I'd probably need a break. But yeah, I'll host more of these as we kind of learn more about how this landscape is changing. But I think it's important in closing to emphasize that last night, the conversation with Elon, I think was quite telling. I think over the long run, he does want to compete with MNOs. That seems pretty clear and it makes a lot of sense for him too. I mean, I'm not, by the way, I'm not like bagging on Starlink or Elon. I think it's a great strategy. He totally should compete with MNOs. Like, that's his endgame, should be to take and extract as much value from MNOs as possible, right? And so I think for the people who are myopic and can't see beyond their nose, like, that's scary for the industry and it's scary for anyone competing. But I think also you've got to recognize that these MNOs are powerful and they've got T-Mobile is basically the same valuation as SpaceX, right? And then that's Verizon, AT&T, they're no slouches either. And so they are going to go to war and they're going to use— and AST SpaceMobile is the tip of that spear. And the amount of enterprise value created for AST for itself and also for The wireless carriers is going to be tremendous, and so you know I think the risk overall to the industry has been dialed up with this this transaction, but also the amount of opportunity for AST has been dialed up as well. And so that and that's on the commercial side of the business, right? Like we're talking wireless consumers, wireless customers on consumer side. We're not talking about defense side or government. And you know, like we saw yesterday, I mean sometimes people need a reminder. It's like. In the FirstNet presentation, they talk about how AST SpaceMobile is going to be an important layer to the first responder network, which, I mean, that's a huge business in and of itself, right? So yeah, I think, I think it's important, and this is why I'm doing these calls, like it's important for people to stay focused. There's a lot of noise and yeah, it's exciting and interesting and I guess like also people panic, but it's important to Really think through what the implications are and what it means. And, you know, has AST's value along— has it been impacted negatively or is it being impacted positively? Right. Has their strategy, the direct-to-device market, before it was viewed as a niche and people poo-pooed it, but now all of a sudden you've got players like Elon Musk throwing $17 billion on spectrum to make it a reality. Right. And that move was done after AST SpaceMobile did their Legato spectrum deal, which people were scratching their heads like, well, I don't know why this makes sense. And does this make them competitive with MNOs? I thought they were using MNO spectrum. It's like, guys, spectrum is valuable. Like if you can, if you have the technology and the infrastructure to utilize spectrum and you can do that, in AST's case, in partnership with your MNOs, there's going to be tremendous value created there, right? And so that should be, that's something that I think for the people who understood it, applauded that move. And now in hindsight, it's like, oh, thank God they did it. And now it's like a, as some people have said on Twitter, the bar has been raised. Like it's a minimum threshold. The minimum bet to enter into this market is to own 40, 50 megahertz of mid-band spectrum, right? That's like the ante to play poker. This is like the World Series of Poker to play. And it's actually, you know, it's not one guy that's going to win the whole thing, but there's going to be 2 to 3 winners at the end, but they take the entire, they take the entire, you know, they win the entire amount, right? But in order to play, like you don't, You need a chip and you also need a chair. And that chip happens to be anywhere between a $10 to $20 billion bet on spectrum. Just kind of, I mean, going back maybe a year or 2 years ago, who would've thought, right? But here we are. But yeah, I think as we kind of learn more, it'll be interesting to see how things shift around here. And as the narrative changes, I think sort of Wall Street analysts who finally start to get it, I think Barclays, by the way, like I tweeted their report. They get it, right? Do you want to compete with someone who is vertically integrated, who's working with you today and will be? You want to work with someone who is going to help facilitate your business and is doing that in a partnership, which is AST. So yeah, we'll see how things kind of play out. And I think the market, it's going to take some time to digest this. And once they do, I think the value of AST SpaceMobile will get reflected. We'll probably see a pretty significant rebound and some catalysts around the corner, which is launch, right? That the narrative is going to shift to, oh, the company's launching satellites and this is real and the constellation's going to be up in a few months. And that's like, I think that's going to kind of slap people back into reality. And the other, I guess the last thing I'll close with is that I think short interest in AST has gone up now. It's like at 44 million shares from a low of 33 kind of at the beginning of August. So the ingredients are all there, man. We're primed, like we're ready that once the launch campaign starts, you've got like all these hedge fund douchebag bros shorting the stock because they think they're smart. But I don't think they fully comprehend everything that's you know, what this means for the industry and basically like why AST SpaceMobile becomes even more of a strategic asset and draws them closer with MNOs that are not working with Starlink and handset manufacturers and even the application guys, right? Microsoft, Google, any number of folks. But anyway, I'll end it there. I hope this was helpful and we'll talk again soon. I'll let this keep running so that it doesn't get cut off and then yeah, we'll talk again, uh, if not before, um, Kook's Face on Sunday or, you know, sometime thereafter. But, um, yeah, we'll see. I think, I think AST, there's a number of big news items that can drop any day now, and, um, I think we'll all be surprised. Take care, everyone.
[01:21:41] 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 SpaceMobile, make sure to subscribe. Thanks again, and I'll see you next time. We're doing something very, very big, and I think with this technology we can really affect billion lives. AST SpaceMobile. OneMobile is the only company that has proven technology to deliver cellular broadband connectivity directly from space to the everyday smartphone. People will just basically turn on their phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Our role is to bring this into reality, always in partnership with the MNOs. Listen.
[01:22:41] Speaker B: Mmm, waffles.