Anpanman - The Carrier Coup: How AST SpaceMobile Locked the US Market

[00:00:07] Speaker A: This is the AST SpaceMobile Podcast.
[00:00:10] Speaker B: It will just basically come to your phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Listen, the opportunity that we have is very, very, very large.
[00:00:27] Speaker C: Everyone, thanks for joining. Uh, I don't normally do 3 Spaces in a day, but man, what a fast-moving day. Um, I'm, I'm in Vegas. I just got back from the spa. Uh, I had a massage and I'm completely relaxed. And, um, I couldn't even like fall asleep during that massage cuz I just kept thinking about all the implications of the news that hit today. Um, but I did want to talk about something we learned later in the afternoon. And it's funny to see Tim Farrar and his ilk try to contort even further and somehow make this a negative for AST SpaceMobile. I mean, it's just, it's mind-blowing, right? But yeah, I think the street, Wall Street still, they haven't figured it out yet and they eventually will. Over the next coming days, weeks, months. I think to any outside observer, when they see this JV, they're like, oh, okay, I guess like the 3 companies are getting together and they're going to try to face against and try to negotiate something with the direct-to-device satellite players, which there's only 2 right now, right? There's only 2 that are authorized for supplemental coverage from space. That's AST SpaceMobile and Starlink. So for someone from the outside looking in, they view this release and they're like, okay, I mean, it doesn't specify like what companies, who's working with who. But a key indication, of course, was the fact that AST put out a press release 2 minutes later, right after the JV announcement, saying that they commended the framework that's being put forward and they're looking forward to working with these companies. I think the biggest tell, and this is something that like the hedge funds, short sellers, they're not following this stuff that closely, but one of the biggest tells of course was Abel retweeting that tweet and tagging T-Mobile amongst Verizon and AT&T. Like as an executive, you don't do that unless you're working with the company, with T-Mobile. And as I mentioned before in previous space, to get this through regulatory review, they're not going to talk specifically about who they're working with, or they're going to say it's— they're open to working with everybody. But in the end, it's— there's only one company that's providing 4G and 5G broadband connectivity to unmodified devices, and that's AST SpaceMobile. And, you know, that the people, the FUDsters try to like spin this as Somehow like AST is trying to get in the limelight. And I think Tim Ferriss was saying this JV was put together so they could negotiate directly with Starlink. No, absolutely not. AT&T, Verizon, and T-Mobile are threatened by Starlink. And this was put together as a defensive move in some regards, right? But also these companies are going to pull their resources, pull spectrum together, and they're going to Verizon and AT&T already leased it out to AST, but beyond that lease, if they can come to a mutual agreement, T-Mobile will contribute spectrum as well and become part of the group. And so I think it's important to really understand the carrier dynamics here, the MNOs. First of all, AT&T and Verizon, they don't like each other. They're very competitive. They're kind of viewed as the premium carriers. But they came together, they put their differences aside, they came together and saw the threat that Starlink was, but also saw the superior solution of AST. AT&T said, hey, you know what, Verizon, you can come join. And so 2 of the 3 biggest competitors decided to join hands and work together in support of AST. Fast forward to today, I think you can ask anybody in the industry, AT&T and Verizon absolutely hate, they hate T-Mobile. The idea of these 2 companies working together, T-Mobile, you can ask anybody who covers TMT, like it's just unfathomable, right? But today, T-Mobile is now in a JV with AT&T and Verizon. That's like, I was talking to Cook about it. That's like, The Ayatollah of Iran taking like a Jewish bride. It's insane. It's like, it doesn't make any sense, right? But they're doing it because they want to deliver a broad, true broadband service to consumers. And they also want to put some competitive, because they know that Starlink Mobile is trying to gun for them, is going to eat off their plate, right? Like the FCC has been, and God bless them, like the FCC is trying to enable more competition. They're giving Starlink easy build-out requirements. Hey, you can light up AWS-3 and H-block spectrum by just deploying it over your satellites. You don't have to build towers. So Chair Carr is favoring Starlink as much as possible to go after the carriers. And so the carriers are like, okay, well, I mean, T-Mobile, yes, as Mike Sievert, he made a mistake. He's where he worked with Starlink. He got fired. Deutsche Telekom CEO, Publicly said, we're wary of working with Starlink. You know, we'll see if anyone else can provide service in Europe, we will work with them. Which, by the way, like, I think in the next few weeks, you know, the head of Satco, Satellite Connect Europe, said specifically, we are planning to add some MNOs in Europe in the coming weeks. So don't be surprised when Deutsche Telekom joins Satellite Connect in Europe. And so just imagine like the fact that T-Mobile is now moving over and working with AT&T and Verizon in partnership with AST SpaceMobile. That means that Deutsche Telekom, Hodges, the— I think his name is Hodges, the CEO, he's authorized that. And that means like Deutsche Telekom's thinking about working with AST too, right? Because they see the competitive issue that Starlink presents for all MNOs. Elon Musk clearly stated we want to be an MNO, clearly stated we're going to develop our own phones. Of course, like he said that in kind of casual conversations, and then when people pointedly asked him to repeat that, he's like, oh no, no, we're going to work, you know, we're going to work in partnership with them. But we all know like where it's going. And so does Gwynne Shotwell, and so does Dave Goldman, right? Gwynne Shotwell is the CEO of SpaceX and of course Starlink, and Dave Goldman runs regulatory for Starlink and SpaceX. So, but yeah, I think the analogy there, the fact that AT&T and Verizon, this is so critical and important and a huge opportunity that they decided to welcome T-Mobile into the fold. It's like mind-blowing and the market doesn't understand the implications of all this, right? It's like for institutions and hedge funds who aren't following this closely, they see the announcement and they're like, oh, okay, I don't know. But then as the stock continues to grind higher, they're going to be like, wait a second, I didn't really understand the implications of this. You're telling me that Verizon, ATT, and T-Mobile are now locked with AST SpaceMobile and this JV is standing up some competitive framework that is going to respond to Starlink and eventually Amazon? Oh, this little company AST, like it's, they have 100% of the market. Like what are the economics of that? If they share 50/50 revenues with each of the MNOs, Maybe it's underpriced at $83. Maybe it's underpriced at $100 or $120, $130, $140, $150, whatever it is, right? If you have 100%, and by the way, like if you have 100% of the most profitable market in the world and Starlink knows this, like you're putting up a constellation, it's really hard to justify the cost of a direct-to-device constellation if you don't have the critical core market of the US. So Starlink direct-to-cell V2, is it going to be economic for them? I mean, this is on the cusp of their IPO, by the way. Like on that roadshow, people are going to be like, oh, so how's that T-Mobile partnership going? And what are they going to say? And so I think it's really important to understand the T-Mobile, sorry, the Starlink response today. So Tim Ferriss astutely pointed out, he was like, oh yeah, this is great for Starlink. It's bad for AST SpaceMobile. And then of course, like, he's like, you know, AST put out this press release just to try to get to be, pretend they're part of it. Which by the way, like you don't put together a detailed press release that's gone through legal review and simultaneously put it out at the same time as this joint venture. And in my follow-up conversation with management, yes, they knew this was coming. They're part of it. And the telling thing for these like Starlink stans and apologists and whoever else, right? Like these FUDsters, they're like, oh well, this is good for Starlink. Well, I didn't see a press release from Starlink. 8 hours went by, 10 hours went by. I didn't see anything. I didn't see anything from Globalstar. I didn't see anything from Viasat. I didn't see anything from Equidus or any of these like wannabe players, Link. But then the telling part is then we had 2 SpaceX executives completely crash out on Twitter. And so I think you have to understand the mindset of these people, right? Like if you're an executive at SpaceX and you see this joint venture announcement and you're not part of it and you had no idea what was going on, your initial reaction should be, okay, I'm going to learn more about it. Well, but that's weird that AST also PR'd this.
[00:10:22] Speaker A: too.
[00:10:23] Speaker C: So I don't feel good about it, but I'm going to learn more. I'm going to be civil about it and I'm going to welcome it because competitively, like if I'm offering a great solution, I should be like, okay, great competition. I want to compete too. But we didn't hear anything from them for 10 hours. And then, and then they lose their shit on Twitter, which is crazy. So if an executive crashes out like that, it means like something bad has happened. Like These these executives should be composed. They shouldn't go out in public. But Gwynne Shotwell crashed out on Twitter, and then it was retweeted by the SpaceX account, the Starlink account. And I'll read what she said. She said, "Well, you know, we l w e e l l l l l l." I guess Starlink Mobile is doing something right. It's David and Goliath times three all over again. I'm betting on David. So Goliath here, when she says times 3, that means Goliath is AT&T, Verizon, and their old buddies T-Mobile. So what would drive a CEO to tweet this? It's like so unprofessional, right? Because again, like if this JV were to go out and it was positive for them, Starlink would be like, hey, we welcome competition and we welcome the opportunity to potentially work with AT&T and Verizon. In addition to our partner T-Mobile. No, they didn't press release that. They said, she said, it's us versus the 3 Goliaths. So my reading of this is that T-Mobile went to, well, first of all, Starlink, they learned about it today and they're like, what? And they call T-Mobile. T-Mobile's like, oh yeah, you know, when we get exclusivity, you're done. You're out. And then Starlink's like, what do you mean? Like, we're working together and we were going to go take on AT&T and Verizon. And T-Mobile's like, no, we're not working with you anymore. We're going to go into the JV. We're planning to work with AST SpaceMobile and c'est la vie. Sorry. And so that's why you had Gwynne Shotwell come out and just absolutely lose it, right? If there was any possibility to come back together, to join forces again, Gwynne Shotwell will not put this tweet out there saying that she's going, you know, Starlink is the David versus the Goliaths of AT&T, Verizon, and T-Mobile. And let's like parse that statement for a bit, right? Like, this is SpaceX going public at a $2 trillion valuation. They just got like 60 megahertz of AWS-3 spectrum and H-block spectrum in the US. The FCC is doing all it can to support them. It even gave them like really low buildout requirements, like, oh, you can meet these requirements by utilizing satellite coverage, which is unheard of. This is that I already talked about it earlier this morning, but that's a game changer, right? Like the fact that AST is now going to be a huge CapEx savings story for all these MNOs is like a whole nother discussion. But the fact that This whole situation, like the fact that Starlink is now saying like, we are David and those 3 are Goliath. Those companies have market caps of like, what, $300 billion? AST has a market cap of $35, $36 billion. SpaceX has a market cap of $2 trillion. What are you talking about? Like there's the fact that, like, I get it, the carriers are old school and, but they're critical. They're critical to providing service and they're differentiated. Like one thing that you can't do if you're going to truly compete, you can compete to a degree, but if you want to truly compete and offer real pervasive cellular service, you need low-band spectrum and the carriers will not give that up. They will absolutely not give that up to Starlink. They are going to pull AT&T and Verizon the 850 megahertz spectrum, and T-Mobile is going to throw more spectrum in there as well. Abel actually alluded to this, and these are the nuggets that people who follow AST very closely, he alluded to this on the earnings call. He said, we, even in one of our countries, which he was talking about the US, we will have access to 100 megahertz of spectrum. So, right? So that's like 50 from Legato, and that's going to be 50 megahertz of low-band spectrum. You can piece it all together. FirstNet, AT&T, Verizon, and now T-Mobile. And when he said that, I was like, well, what market is he talking about? I guess it's the US, but then is Verizon, AT&T really going to give him that much spectrum? That must include T-Mobile. And this is something we've been talking about for years where it's like eventually when T-Mobile finds out that they strategically compromised themselves, they're eventually going to come back or it's going to be required that Verizon, AT&T, let them enter the fold, right? And so that's what we're seeing today. And so going back to what I was saying before, if T-Mobile, if there was a way to work with T-Mobile for Starlink and this JV, the FUDsters are like, oh, this is good for Starlink. Well, where's the press release? For 10 hours there was no press release. And then you've got the executive saying, we're going to take these guys on. Like that's telling you that Starlink is absolutely not part of this. They were told, to hit the road, like head for the mountains. Like David Goldman, who heads regulatory, he's like a pretty nasty fellow. He's the guy who's been doing lawfare, trying to take spectrum from Iridium, from Globalstar. He's been, you know, he called, funny enough, he called AST SpaceMobile a meme stock and like backed by foreign investors when in fact their biggest partner at the time, who's not their partner anymore, T-Mobile, is owned by a German company, right? And so the mental contortion that these guys do for lawfare is, it's pretty laughable, but I applaud him. Like, that's his job. So he then retweeted what Gwynne Shotwell said, and he said, I'll take that bet. Interesting read. Registration required. SpaceX spooks the telcos and throws towers a bone. A press release, not a deal. He writes, there is no definitive agreement yet, which is the tell. I don't know what he's trying to imply by that. The DOJ question, the bigger question is whether the DOJ even allows it. 3 high-margin competitors moving in parallel just as new rival prepares to enter is the kind of pattern that raises real collusion concerns. So yes, that's true. The DOJ and the FCC are going to review this JV very closely, and this JV is going to go to the regulators and say, we want to— the only way to provide wholesome broadband service to consumers is to pool our spectrum Use AST SpaceMobile today, and they're going to tell regulators, by the way, so be prepared. They're going to say in the future we might invite other satellite companies too, because if you want to get through competitive antitrust review, you're going to have to say that, right? And the ground has been prepped. AT&T, Verizon, and just recently T-Mobile, the CEO said, hey, we want to use like other satellite companies too. You have to make public statements to back up what you're trying to do, right? And so by doing that, they're going to say we're fostering competition, we're supporting Chair Cars, like, you know, improving services for everyone. But they're going to be able to say like, hey, so this guy Starlink, you gave them 60 megahertz of spectrum. They can sell directly to consumers, which is what they're already doing now. And they can sell consumers an eSIM, which then, because Starlink is a separate roaming network, it's not integrated into the MNO's core. So they're going to be able to compete. They can sell that eSIM service to Verizon, T-Mobile, AT&T customers. And so they're going to be able to compete directly, right? I mean, it's a $2 trillion company. They got a marketing budget. They can do it. And then, oh, by the way, like this Amazon guy, they just bought Globalstar and that's Amazon. And they're providing this like backup service to Apple and eventually they'll get there maybe in 3, 4, or 5 years. Like when they have to wholesale design a new constellation, So if you're a regulator, like you're telling me as AT&T, Verizon, and T-Mobile, you got like Starlink here who's like, they want to eat off our plate and Amazon who eventually is going to try to do something. You're saying like that's anti-competitive? No, no. We're just trying to provide a real broadband service because what Starlink is doing is texting, intermittent texting, and Globalstar is doing intermittent texting to provide a real critical solution, which by the way is like a national security issue. We're going to pull our resources and deliver this solution, and it's going to be great for the Department of Defense. It's going to be great for FirstNet, disaster recovery, all this stuff, right? And so Dave Goldman here, as I said before, and Gwynne Shotwell, they crashed out today on Twitter instead of applauding this JV because it's good for the industry. They're coming out guns blazing saying, we're going to fight this. And of course, Tim Ferriss, after saying like, this JV's going to work with Starlink and blah, blah, blah, he's like, oh, I guess they're fighting it. Because like, yeah, I mean, Tim Ferriss, what a complete idiot. He's, I guess he was claiming that, actually, I don't, I mean, I don't know if he, at this point, it's like pure cinema, right? It's entertainment. This guy, he's just totally kiboshed his career. And even in the face of factual evidence, right, that AST's working with a company, with, with AT&T, Verizon, and T-Mobile. You know, we heard at Deutsche Bank today to, you know, that, that was echoed. And, you know, I talked with the company and, and what, what can't be said in the press release, they're working together, right? And, and it's, it's confirmed by the Starlink executives crashing out saying, we're going to go take on those 3 guys. Why would they say that? They're saying that because they're now on the outside looking in. The T-Mobile exclusivity coming in June/July, that's going away. And T-Mobile, maybe they'll work with them for a few more months, or maybe they'll— I mean, and this is the way that from a competitive standpoint, T-Mobile can couch this to the regulators. They're going to say, yeah, we're going to offer Starlink to our customers, but it's not going to be the preferred service, but customers will have an option to pick it. But then if they want true broadband, they'll pick the AST SpaceMobile solution. So it'll be on a menu of options and maybe AST's solution will be, I don't know, $12, $15 a month. Starlink is $10 a month. Do you want broadband or do you want texting? And so we'll leave it up to the consumers. Like that's one way where they'll go to the DOJ and FCC and say, hey, look, I'm giving people the choice. And it's like the old Windows analogy when they try to bundle Internet Explorer, but everybody kept buying Or everyone kept downloading Fox, you know, the Fox browser, Firefox or Chrome. It's like, well, I don't want to use Internet Explorer. It's a piece of shit. And that's what Starlink is, right? And so maybe the regular might say you have to offer Starlink as a potential choice. And sure, sure. Like if we're going to compete on the merits of the service, I will take AST every day and twice on Sunday versus Starlink, right? And so that's, That is one of the competitive dynamics where when they go to the DOJ and FCC, that's how they get it approved, right? Because like, you're going to tell me that a $2 trillion company that's been given a war chest of spectrum, mid-band spectrum, not low band, but that they can't compete? Of course they can compete. But are you going to twist the arm of T-Mobile that they have to, after they made this mistake, that they have to carry their service? No. It's up to them. They can decide who they want to carry, right? And so I think for anybody who's trying to FUD and say that Starlink is not walking from T-Mobile, ask them, look at the tweet from Gwynne Shotwell and Dave Goldman. Like, what? So if they're not walking, like, why are these executives at Starlink acting like they just got left at the altar? Like, why would they crash out on Twitter like this? It's totally unprofessional. And why would they? Yeah, it's the cognitive dissonance, the cognitive dissonance to get around like facts that are staring you in the face. And this is like when I was a hedge fund, when I was in the hedge fund world and, you know, my job is to read everything that's being said and not being said and looking at the mosaic. For Space Mob, it's like, oh yeah, you could piece it all together. Like this morning, the PR came out from the JV. 2 minutes later, PR came out from AST. SpaceX did not say anything for 10 hours and then there was no PR. And then Starlink executives come out and say they're going to fight this. They're going to fight the Goliath of AT&T, Verizon, and T-Mobile. And Dave Goldman, from a regulatory point of view, is going to fight this. It'll be interesting to see their arguments when they file with the FCC in trying to kibosh this. But I can guarantee you this, like, I don't see T-Mobile going back to Starlink. And so they're going to have to figure out a way to sell the direct-to-cell service on its own on a standalone basis. And we might actually get to this point where Elon may make a decision where it's just not economical to continue, right? Because like, if you don't have at least a third of the most profitable market in the world, then how can you amortize and justify the economics of a constellation globally, right? And I'm not talking about the fixed wireless service that goes to your home that you need to dish. I'm talking about direct-to-cell, right? And so AST just locked up the US 100%. In Europe, they've locked up everybody with the exception of Deutsche Telekom. And I'm telling you right now, watch Deutsche Telekom join Satellite Connect in Europe because that's going to happen. It's absolutely going to happen in the next few months because Deutsche Telekom had to agree to allow T-Mobile to do this. And as we know, Deutsche Telekom knows like they don't trust Elon Musk. And so I, it's going back to what I was saying this morning, like it's interesting the structure, like AST SpaceMobile and Vodafone created the joint venture Satellite Connect Europe in order to deliver these services. And they brought all these carriers on board. They got like covering 27 countries in the EU, but that was the structural framework that was put in place to allow these competitive carriers to work together. for a common cause, which is delivering broadband connectivity no matter where you are in Europe, and also to provide disaster recovery services, FirstNet, the equivalent of FirstNet. Interestingly, that model has now been brought to the US. The model that AST developed with Vodafone is now being put to use between AST and AT&T, who AT&T is the quarterback, the senior partner of this JV. The 2 junior partners are Verizon and T-Mobile. Previously, when it was just AT&T and Verizon, AT&T was a senior partner. Verizon's a junior partner. AT&T has a board seat at AST. Verizon has a board observer seat. They're both investors. They both contributed spectrum, but now T-Mobile's joining. And this JV is exactly the same like Satellite Connect in Europe. And so don't, I wouldn't be surprised if we see in the next few weeks this new JV called Satellite Connect America, right? And Yeah, it, it, the reason why you need this JV is that you've got, you know, 3 competing partners. And so you're going to have to create some entity that's going to be able to, you know, coordinate all this stuff. As I mentioned before, I think it's, and for those people that heard it already, you know, apologies for the redundancy, but, you know, from the release it says like the existing agreements are going to continue on with with the carriers, right, as is. So AST has a 3-year mutual exclusivity, or sorry, exclusivity with AT&T. Starts when service starts, which will be probably what, early 2027? With Verizon, they have, I think, around 2 to 3 years. No one really knows, but that's kind of the sense that I got in various discussions with the company and from some research. And guess what? T-Mobile with Starlink, that exclusivity actually ends Next month or in July, right? And so that's why this is happening today. And that's why the Starlink executives crashed out, right? Because they're getting left out. And anybody who's telling you that that's not the case, they're in absolute denial. So while I'm speaking here, if you have questions or comments, feel free to to leave them and I'll go through any questions because I'm sure some people have them. Actually, here's one. Juan Gonzalez, any potential antitrust concerns on the JV out of Brendan Carr? Yeah, Brendan Carr, he's going to poke holes through this and the DOJ is going to do it as well. But just know like the attorneys at, the regulatory attorneys at AT&T, Verizon, and T-Mobile are really good. And so they're going to structure this in such a way that it's pro-competition. They're going to commit to having an open framework and evaluating other satellite services. And so they're going to make it seem like it's pro-competitive, which it will be, right? But then it's up to them. They don't have to work with Starlink. Clearly they're not. Starlink just told us today that they're not. Could they work with Amazon? Apple in the future, maybe, but Globalstar doesn't have enough spectrum to work with. They're not bringing much to the table. They have an old constellation. They have to replace it at some point. Amazon will develop a new one, but they're not bringing anything to the table because their satellites are focused on mid-band. AST, the first Block 1 satellites are focused on low-band cellular. So they can provide additional value to the carriers in lighting up their spectrum. I talked about this before where If you have spectrum that's not being used in these like dead zones, then by the fact that AST can light that up, that adds value to your spectrum because then users can go there and they have a good experience. On top of that, from a CapEx perspective in these suburban areas, you can actually start decommissioning towers, right? Because according to the FCC, you can use satellite to meet buildout requirements or coverage requirements, right? So that by the fact that you're lowering your ongoing CapEx to build new towers, but also reducing costs of decommissioning towers, like your margins go up. And then by servicing incremental people that you weren't able to service before, your revenues go up. And so that spectrum, by being lit up by a satellite, it actually increases the value. If it was worth $10, then it's worth probably $12 or $13 or $14 because it's used more efficiently and you get more out of it. So, but going back to your question, like, I don't think from an antitrust point of view, I already went through it before, but they're going to make a very good case as to why this is pro-competitive. Most importantly, it's good for the consumer. And Starlink is a perfectly capable party. They've got big boy pants, they've got like spectrum, they've got $2 trillion market cap, like they can go compete. they can go directly to consumer and try to stand up some type of service. Like this whole idea that they're the David versus Goliath, like who are they kidding? It's like such a crazy, bizarre like message they're trying to convey. And so yeah, I don't think that there's going to be any competitive issues here and, you know, they might need to concede some things here and there, but at the end of the day, the best technology should win. And this new JV is going to pull low-band spectrum, and there's only one company that can deploy low-band spectrum, and that's AST. And then AST is going to bring to bear its mid-band spectrum, and it's only going to sell that through the carriers because that's the model. We've talked about how AST is a partner of carriers. They don't want the customers. You're just providing wholesale services, right? Whereas Starlink and Amazon, They eventually want to own the customer, right? And so I don't think it, from a competitive standpoint, if you're, it's kind of hard to argue that Amazon and Starlink at some point in the future won't be competitive. So yeah, let's see. Someone's saying, why is the volume so low? Is it, are they talking about like the Trading volume or me talking? Hopefully you guys can hear me. Let's see here. But yeah, it's— let me see if there's more comments. But yeah, today I don't often do this, but like there's people that, you know, I talk to and today, I mean, I'm pretty conservative in terms of not telling people like go out and buy stock. But today I was saying, This is the one day where you can go out and when AST was at like 76, 75, and we went even to 74 for some bizarre reason, I was like, you should go buy it because the market's not pricing this in. This is like the announcement when we got Verizon and the stock was up like, I don't know, went from 5 to like 9 or 8. But then eventually, like as this market started to process the news, the stock rallied to 11, 12, and then it ended up at a high a few months maybe it's like 2 months later at 39. This is that news today. This is that news. Like I actually, in one of my family accounts, like I thought I had put in a buy order and it didn't go through at like 75. So I actually still went out and bought it like 81 because it's still a good buy here, right? It's still a good buy at 82.5, right? Because this is like the clearing event, right? This is the watershed moment for the industry where Starlink is going to have to go out and compete on their own. And AST is now bringing T-Mobile into the fold. And so it's got all 3 carriers, right? And I don't know like what better bet there is out there. That's just, and we're only talking about the commercial business. We're not even talking about the defense side, right? And the doubts that people might have had earlier, like, what does this mean for Starlink and all that stuff? Like we got affirmation in the afternoon, like the Starlink executives pretty much said like they're cut out of this or they will be cut out or T-Mobile has told them to go walk. And so yeah, what an exciting time. Like I think I was telling Kook that Verizon getting added was a transformational event. And I covered this earlier in the space, but I know some of you guys have joined later. Verizon and AT&T, they absolutely, they hate each other, but then there's no one more they hate more. They don't, there's not a party they hate more than T-Mobile. T-Mobile is like a thorn in their sides and they absolutely hate T-Mobile. The fact that they brought them in, I made the analogy of like, it's imagine like the Ayatollah taking Iran and Israel making peace. Like they bury families together or something. Like this is what that is right now. The fact that T-Mobile is joining AT&T and Verizon absolutely hate their guts. They hate them more than each other. They just hate them. They should tell you something. And this whole notion of the direct-to-device market being too small or, you know, people won't pay for it, whatever it is, right? Like these carriers are banding together and creating a JV to make sure they get it right. And so that should tell you a lot, like from a competitive framework, like the potential threat to the business. But also the economics. And someone at Deutsche Bank, Scott, spoke at this conference earlier today and someone was like, well, what if the carriers try to squeeze AST on margins? And it's like, that's not how they're thinking about this service. Like, this is a direct-to-device, is a revenue driver. It's going to help them drive ARPU and reduce customer churn. That's not something that you try to crimp on margins. Right? Like in a 50/50 joint venture, sorry, where you're splitting revenues 50/50, you're going to try to drive revenues, right? Like why would you try to squeeze your partner and they not invest in the constellation of the network and it ends up being crappy? No, this is a, if you can imagine like the MNOs, they've been praying for something like this, something to sell to consumers that consumers will want. Why would they skimp on that? And that's why Starlink failed, right? They put up a, minimally viable product of 650 satellites that can do about, what, 3, 4 megabits per second within a very large radius versus AST that can do with the previous satellite, 100 megabits. And the new one, the Block 2 satellites will do 200 megabits per second. And that's going to increase probably up to like 1 gigabyte per second once the mid-band constellation's launched. And you get some of these spectrum efficiencies from you know, AI optimization. But for the carriers, like they want to, this is a revenue driver, right? And it's also a big CapEx savings for them. They're not going to want to skip on this. They're not going to be penny-wise, pound-foolish. And, you know, we learned from the T-Mobile agreements with Starlink, which is absolutely insane. T-Mobile paid Starlink for access and then they were giving them 80 cents for every dollar that was generated and T-Mobile kept 20 cents, which is crazy for shitty service. Whereas AST is splitting it 50/50. So for every carrier, like it's a win-win, right? Like they're going to get better customer satisfaction. They're going to drive higher ARPUs. Like this is going to be part of some premium plan. I mean, this is my guess, like a premium plan and they're going to charge a premium for it. And they're going to be able to drive ARPU increases and people are going to be happy to pay that. Or for people who are on vacation, they're going to pay $10. Like if you're a mobile worker or I made this, I talked about this example earlier in the midday talk where Amazon, they have this new commercial on TV where the dad is with 2 kids and they're camping out in nowhere. And the dad takes a picture of this rash and AI tells him like it's poison ivy. And then, you know, it says Amazon Health or whatever. And then I was watching that advertisement and I was like, well, how is he going to connect? What network is he connected to do that? Because he's out in the, you know, out in nowhere in this tent with his kids at nighttime. And then of course it's like, oh, well, eventually they're going to hopefully get Globalstar to that point, which, you know, good luck. But you're going to need that type of service, that connectivity, and people will pay a premium Like when I go skiing or when I go to the Hamptons or if I'm just driving upstate or even across parts of New York and I'm in a pretty dense urban environment, like when I'm down south or on the West Coast, you get dropped calls all the time. Like people will pay premium. And if you are someone, if you're a power user, right? Like if you need your Bloomberg setup and your trading screens or whatever and you're out in some cabin somewhere, like you're going to pay you're going to pay $20 for a day pass or it's going to be just part of your premium package, right? It's like when the alternative is no connectivity, I would pay $30, I would pay $80 to have connectivity because I need to get my stock trades in or I need to do research or if my kid gets lost, like I'm going to pay a premium to keep tabs on them, right? And so Yeah, I think it's an exciting time right now where the market doesn't fully appreciate this and it's going to take time. I think Deutsche Bank, by the way, like they did the call with Scott earlier today and there were some good questions out of that. Like I think he's probably going to publish a note, maybe he'll upgrade the stock because he started to get some sense of what this means, right? And so I think Roth Capital did as well. Bank of America totally missed the mark today, but they'll get it. eventually get it. And maybe some of these research channels aren't following Starlink, the executives' accounts, but they should be. They should see that Starlink is up in arms about this, right? And they're only up in arms because they're getting, they're not part of it. They're absolutely not part of it. Don't forget what Tim Ferriss is saying or any of these clowns, like they have no clue. And yeah, it's just absolutely entertaining. But Someone's saying here, yes. So when we talk about catalysts, like AST, the satellites, the batch shipment could go, that PR could be tomorrow. It could be this evening, could be over the weekend, but that's going out soon. The FAA is going to approve Blue Origin for launch very soon here. And that's based off of due diligence and talking with various people like We feel very confident about that. We being Space Mob. So I think you're going to see a Blue Origin launch probably in early June. That's probably going to be Amazon LEO first, but then AST, we've got a handful of Blue Origin launches. We also have a handful of SpaceX launches and equivalents, meaning ULA Centaur or Vulcan Centaur. And so, you know, we've got a launch in June and then we've got either 1 or 2 launches in July. I mentioned this in the space earlier today, but I think the company is now on this cadence where they're, I think the old statement of like launch on average one every 1 to 2 months, that was actually for the entire year. But in actuality, from here on to the end of the year, they're going to be launching 1 to potentially 2 times a month. So that's new alpha for everybody. But yeah, the The last time, I'll just remind people, last time I was in Vegas was 2025 in May, and we were at $25 and we were consolidating for some period of time and people were upset. And then we had, I think, like Trump get into a row with Elon Musk and we, I think Satellite Connect Europe may have been announced at that time. And there were a few other things as well. We got Vodafone Idea as an MNO and the stock just absolutely took off and just went on this unidirectional move over the course of June and July and went to like from $25 to $55 and then dropped back a little bit and then just kept going higher. Similarly, in 2024, where you had actual comparable events, which is what's happening today, which is in May of 2024, we had AT&T announced a commercial agreement with AST. They finally inked that after having worked together for so many years. And the stock went from like 2 to 5. And then at the end of May, that's when Verizon announced that they were joining the partnership, contributing spectrum, making a strategic investment. And the stock went from 5 to 11 and just never looked back. Like it was a unidirectional movement up and it closed at like 39 high or hit intraday high of 39. Maybe it was like a few, maybe it was July, August, I think August. Yeah. So it was like 2 months later. But that's what we have here. And I'm telling you, like, we have all these catalysts lined up. This, Tut was telling me the other week, he was like, I, you know, there's going to be something out of left field that really takes the stock up. And that's what this is. This was out of left field. This is like, okay, it wasn't explicitly said in the PR, but for people who understand it, AST just brought on T-Mobile and they locked up 100% of the market. Like, what more do you want? And then we're on this launch campaign. We're about to like ship a batch, a new batch. It's going to go on Falcon 9. There's going to be another one. And then New Glenn's going to take up 4 and then it's going to take up 6 and then eventually get to 8 satellites. And then Vulcan Centaur, ULA, that's going to take 5 satellites. We also learned something today from this Deutsche Bank conference where Arianespace will be able to take 4 to 5 depending on the configuration. Japan's Mitsubishi Heavy, I think it's going to take about 3 satellites. And then because these are composite satellites, India's ISRO can actually take 2 of them up and launch. And so there's a whole host of launches that are going to become available in 2027. By then, in early 2027, we should have 45, 50 satellites. Once we're at this production cadence, like getting to 60 quite fast. And then I think Scott mentioned, you know, starting in Q1, they might start dribbling out the new mid-band Bluebirds, which are going to be Block 3, right? So that's already in the works. So I've been rambling. I probably need to, you know, I dipped out on my friends. I need to go meet up with them, but it's an exciting time. Like, I think, I don't say, I don't make predictions often, and partially because I'm scared of being wrong. But when you have high conviction, like when something's staring you in the face, which is what it was this morning where the stock was like at 74, 75, 76, people didn't know what to make of it. And I was telling friends like, you need to buy this. Like you need to buy as much as you can because we are about to enter like a multi-week run. unidirectional run, right? Because you've got SpaceX IPO that's coming up, that fact is going to be released soon. It'll be interesting to see how SpaceX kind of couches this on the roadshow that T-Mobile's leaving. They're probably not going to say that, of course, but that's what's happening here. So you've got that tailwind. Rocket Lab is like crushing it. The stock's doing well. That's great. Like other space names are doing well. The backdrop is all here. Like the ingredients are here. Like we've got 3 new military contracts like during the quarter, which people forgot about because like the price, the stock price wrote the narrative. But yeah, we got T-Mobile, we got T-Mobile, Verizon, AT&T. Like what more do you want? And we've got, we're launching Constellation. Like everything is primed to go. Like we are coiled. Like we have underperformed the space sector and, you know, rightly or wrongly, but I'm bullish. I'm so bullish. I added upside today, like with abandon, right? Like when the stock opened at 75, 76 and it was like teetering, I was like, this is just dumb. Like I'm buying. It's similar to like when Cook like ripped a few hundred thousand shares of AST when the Verizon news came out and the market like didn't know what to do with it, right? But that's what we have. That's what we have. And it's going to take time for the market to digest this. And as they digest this and as they look at Tim Ferriss like contortion and be like, what is he talking about? Like he has no clue. And these sell-side analysts like actually dig in. They talk to Scott and Abel and they figure out what this means. It's going to turn, isn't it? And it's going to turn fast. And as this stock rallies, people are going to be like, wait, what happened?
[00:45:32] Speaker A: What is this?
[00:45:33] Speaker C: What's going on with this company? And they're going to dig in and wait, what? They got AT&T, Verizon, and T-Mobile, and Starlink is getting kicked to the side? Yeah, that's what this is. I don't know what other story can be that compelling. It's like the years ago, it was like an impossible outcome, right? And then Verizon joining AT&T was an impossible outcome. And then now T-Mobile, it's like, what? Which has happened. And so that's where we are. I highly recommend that you guys, you don't have to listen to the space I did early this morning because I was like really tired, but listen to the midday one because I go through a lot of details about what transpired in the competitive dynamics here. And then this space, if you joined late, it's recorded, you should listen to it. But yeah, the key thing is that we have confirmation from 2 senior Starlink slash SpaceX execs that they are out of this. They are out of this. Like, they want to go to war against AT&T, Verizon, and T-Mobile. T-Mobile is dropping them like a bad habit. And yeah, there's going to be some interesting regulatory filings and we're going to learn more. I wouldn't be surprised if we hear rumblings that AST and T-Mobile are going to start working together in June, July. And then the big one too is going to be Deutsche Telekom. Like, I wouldn't be surprised to hear Deutsche Telekom as part of their offering the best service to their customers, they're going to take on AST SpaceMobile too and become part of Satellite Connect and join and explore potential service like that. They're going to be as light-handed as they can about it initially, because again, we got to get through regulatory review. But this is where the puck is going. And so Yeah. Congrats everyone. I, it's early, but I have conviction. Like if the market really understood what happened today, the stock would be at $100, $120 and it would keep growing higher.
[00:47:32] Speaker B: Right.
[00:47:32] Speaker C: And I think that's what's going to happen in the next few weeks. So anyway, thanks everyone for joining. Appreciate it. And yeah, thanks for listening to me for the 3rd time today, but I'm excited. I haven't been this excited since we announced our partnership with Verizon. But this is even bigger than that. Anyway, thanks and take care, everyone.
[00:47:51] Speaker B: Goodbye.
[00:47:52] 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.
[00:48:23] Speaker B: We're doing something very, very big, and I think with this technology we can really affect billion lives. AST SpaceMobile is the only company that has proven technology to deliver cellular broadband connectivity directly from space to the everyday smartphone. People will just basically turn on their phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Our role is to bring this into reality, always in partnership with the MNOs.
[00:48:56] Speaker C: Listen. Mmm, waffles.