AST SpaceMobile and Verizon Announce Plans to Target 100 Percent Geographical Coverage of the Continental United States from Space on Premium 850 MHz Cellular Spectrum

Rhea-AI Summary

AST SpaceMobile (NASDAQ: ASTS) and Verizon (NYSE, NASDAQ: VZ) have announced a strategic partnership aimed at providing 100% geographical coverage of the continental United States using the premium 850 MHz spectrum. This collaboration involves a $100 million commitment from Verizon, which includes $65 million in commercial prepayments and $35 million in convertible notes. The partnership aims to eliminate dead zones and enhance connectivity, particularly in remote areas. AST SpaceMobile's technology is produced in Midland, Texas, and the company has agreements with over 45 mobile network operators globally, serving 2.8 billion subscribers worldwide.

Positive

• AST SpaceMobile and Verizon's partnership aims for 100% U.S. coverage, a significant commercial milestone.
• Verizon has committed $100 million to AST SpaceMobile, signaling strong financial backing.
• The $100 million includes $65 million in commercial prepayments, ensuring immediate capital infusion.
• AST SpaceMobile has agreements with over 45 mobile network operators, covering 2.8 billion subscribers globally.
• Enhanced connectivity will eliminate dead zones, benefiting remote areas of the U.S.

Negative

• Out of the $65 million in commercial prepayments, $45 million are subject to certain conditions, adding uncertainty.
• The $35 million in convertible notes could lead to future shareholder dilution.

Insights

Financial Analyst

The partnership between AST SpaceMobile and Verizon, with a $100 million commitment, signifies a major financial investment designed to expand cellular connectivity. The inclusion of $65 million in commercial prepayments, of which $45 million are conditional, highlights Verizon's strategic investment to enhance its network. The remaining $35 million allocated to convertible notes offers AST SpaceMobile a flexible financing option. For retail investors, assessing the financial impact of this partnership involves considering the potential revenue boost for AST SpaceMobile from this and similar deals and how it aligns with Verizon's broader network enhancement strategies. Given the sizable investment and the promise of eliminating connectivity dead zones in the U.S., this news indicates a positive development for both companies, likely boosting investor confidence. However, it's important to watch for the fulfillment of the conditional payments and overall execution of the plan.

Tech Expert

The deployment of AST SpaceMobile's satellite technology to eliminate dead zones in the U.S. is a significant technical milestone. By leveraging the 850 MHz spectrum, known for its robust penetration and extensive coverage, the partnership can potentially offer seamless connectivity in remote areas. This technical approach combines Verizon's terrestrial network with AST's satellite arrays in low Earth orbit, suggesting a hybrid model to address connectivity gaps. For investors, understanding this technology's viability and scalability is critical. The successful integration of satellite and terrestrial networks could set a precedent for future connectivity solutions globally, enhancing the long-term value of AST SpaceMobile's technology. This blend of space and ground-based infrastructure represents a forward-looking investment in the telecommunications sector.

MIDLAND, Texas & BASKING RIDGE, N.J.--(BUSINESS WIRE)-- AST SpaceMobile, Inc. (“AST SpaceMobile”) (NASDAQ: ASTS), and Verizon (NYSE, NASDAQ: VZ) today announced a strategic partnership with a commitment of $100 million from Verizon, to provide direct-to-cellular AST SpaceMobile service when needed for Verizon customers.

AST SpaceMobile and Verizon Announce Strategic Partnership (Photo: Business Wire)

“This new partnership with Verizon will enable AST SpaceMobile to target 100% coverage of the continental United States on premium 850 MHz spectrum with two major U.S. mobile operators in the most valuable wireless market in the world, a transformational commercial milestone,” said Abel Avellan, Founder, Chairman, and CEO of AST SpaceMobile. “This partnership will enhance cellular connectivity in the United States, essentially eliminating dead zones and empowering remote areas of the country with space-based connectivity.”

“Verizon has always been strategic and efficient with our spectrum strategy. We use the spectrum entrusted to us to deliver outstanding cellular service for our customers through our terrestrial network. By entering into this agreement with AST, we will now be able to use our spectrum in conjunction with AST’s satellite network to provide essential connectivity in remote corners of the U.S. where cellular signals are unreachable through traditional land-based infrastructure,” said Srini Kalapala, Senior Vice President of Technology and Product Development at Verizon.

The combination of Verizon’s highly reliable terrestrial mobile network, the multi-operator 850 Mhz band and the largest and most powerful commercial communications arrays ever deployed in low Earth orbit, is planned to enable cellular consumers to stay connected wherever they are, anywhere in the continental United States. The $100 million Verizon commitment includes $65 million ​of​ commercial prepayments, $45 million of which are subject to certain conditions, and $35 million of convertible notes.

Today, AST SpaceMobile has agreements with more than 45 mobile network operators globally who collectively serve over 2.8 billion existing subscribers. The company produces its state-of-the-art satellite technology in Midland, Texas, with manufacturing and testing facilities that collectively span 185,000 square feet.

About AST SpaceMobile

AST SpaceMobile is building the first and only global cellular broadband network in space to operate directly with standard, unmodified mobile devices based on our extensive IP and patent portfolio. Our engineers and space scientists are on a mission to eliminate the connectivity gaps faced by today’s five billion mobile subscribers and finally bring broadband to the billions who remain unconnected. For more information, follow AST SpaceMobile on YouTube, X (Formerly Twitter), LinkedIn and Facebook. Watch this video for an overview of the SpaceMobile mission.

About Verizon

Verizon Communications Inc. (NYSE, Nasdaq: VZ) was formed in 2000 and is one of the world’s leading providers of technology and communications services. Headquartered in New York City and with a presence around the world, Verizon generated revenues of $134.0 billion in 2023. The company offers data, video and voice services and solutions on its award-winning networks and platforms, delivering on customers’ demand for mobility, reliable network connectivity and security.

Forward-Looking Statements

This communication contains “forward-looking statements” that are not historical facts, and involve risks and uncertainties that could cause actual results of AST SpaceMobile to differ materially from those expected and projected. These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “would,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology.

These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside AST SpaceMobile’s control and are difficult to predict.

Factors that may cause such differences include, but are not limited to: (i) expectations regarding AST SpaceMobile’s strategies and future financial performance, including AST’s future business plans or objectives, expected functionality of the SpaceMobile Service, anticipated timing of the launch of the Block 1 Bluebird satellites, anticipated demand and acceptance of mobile satellite services, prospective performance and commercial opportunities and competitors, the timing of obtaining regulatory approvals, ability to finance its research and development activities, commercial partnership acquisition and retention, products and services, pricing, marketing plans, operating expenses, market trends, revenues, liquidity, cash flows and uses of cash, capital expenditures, and AST’s ability to invest in growth initiatives; (ii) the negotiation of definitive agreements with mobile network operators relating to the SpaceMobile service that would supersede preliminary agreements and memoranda of understanding and the ability to enter into commercial agreements with other parties or government entities; (iii) the ability of AST SpaceMobile to grow and manage growth profitably and retain its key employees and AST SpaceMobile’s responses to actions of its competitors and its ability to effectively compete; (iv) changes in applicable laws or regulations; (v) the possibility that AST SpaceMobile may be adversely affected by other economic, business, and/or competitive factors; (vi) the outcome of any legal proceedings that may be instituted against AST SpaceMobile; and (vii) other risks and uncertainties indicated in the Company’s filings with the SEC, including those in the Risk Factors section of AST SpaceMobile’s Form 10-K filed with the SEC on April 1, 2024.

AST SpaceMobile cautions that the foregoing list of factors is not exclusive. AST SpaceMobile cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors incorporated by reference into AST SpaceMobile’s Form 10-K filed with the SEC on April 1, 2024. AST SpaceMobile’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, AST SpaceMobile disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240529554741/en/

Investors:

Scott Wisniewski

investors@ast-science.com

Media:

Allison

Eva Murphy Ryan

917-547-7289

AstSpaceMobile@allisonpr.com

Verizon

Katie Magnotta

201-602-9235

Katie.Magnotta@verizon.com

Source: AST SpaceMobile, Inc.

FAQ

What is the ASTS and Verizon partnership about?

AST SpaceMobile and Verizon have partnered to provide 100% geographical coverage of the continental United States using the premium 850 MHz spectrum.

How much is Verizon investing in AST SpaceMobile?

Verizon is committing $100 million to AST SpaceMobile, including $65 million in commercial prepayments and $35 million in convertible notes.

What is the goal of the ASTS and Verizon partnership?

The goal is to eliminate dead zones and enhance cellular connectivity, especially in remote areas of the continental United States.

How many mobile network operators has AST SpaceMobile partnered with globally?

AST SpaceMobile has agreements with over 45 mobile network operators globally, serving 2.8 billion subscribers.

Where is AST SpaceMobile's technology produced?

AST SpaceMobile produces its satellite technology in Midland, Texas.