Latest / AST SpaceMobile Podcast / Anpanman - Amazon's $10B Space Bet and AST SpaceMobile's Production Breakout

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Anpanman - Amazon's $10B Space Bet and AST SpaceMobile's Production Breakout · AST SpaceMobile Podcast

0:06
This is the AST Space Mobile podcast, just basically.
0:11
From your phone, be seamless. But regardless of where you are,
0:15
we don't want the user even to know that it's connected by
0:17
satellite. Listen, the opportunity that we
0:22
have is very, very, very large. Everyone not sure if this is
0:29
going to work, let me just say people give me a thumbs up if
0:33
you can hear me OK. I tried to use hotel Wi-Fi but
0:39
that didn't work too well. And then I think I'm roaming on
0:45
Bells network, but then I think I used up all my 5G connectivity
0:49
and so I think I'm probably running this space on 3G.
0:54
So I'm not sure if that's going to work but I'm getting thumbs
0:57
up. So seems like it's OK, but I'm
1:01
in the Vancouver airport. I'm in the hallway of our hotel.
1:06
Unfortunately, our room does not have a private place to do this
1:10
space. And this hotel in particular
1:13
does not have a business center either.
1:15
So, so I'm just doing this out here in the hallway.
1:20
But yeah, I just wanted to get people together.
1:24
Quite sorry I've been away. I was, I was actually been with
1:29
family here in Vancouver for spring break.
1:32
We went skiing this weekend. Of course before we started the
1:35
trip, everyone was sick and so not ideal, but happy to say that
1:40
everyone's had a great time thus far and we're coming to the tail
1:44
end of this trip. And of course, during this
1:48
entire week, while I was kind of out of Commission, of course, a
1:50
lot of news kind of hit the wire and whether that was macro stuff
1:54
or things related to AST and of course some things and the space
1:59
sector as well. But I didn't want to fire up a
2:02
space and just provide some preliminary thoughts about the,
2:05
the rumoured Amazon interest in Global Star and then talk about
2:10
production as well. So let's talk about Amazon.
2:14
So the Financial Times were in a report that Amazon is supposedly
2:20
interested in acquiring Global Star.
2:21
They've, they've had talks and, and for those that remember Jay
2:25
Monroe, who is the CEO global star who owns a pretty hefty
2:29
portion of it, there were rumors, I think it was like last
2:35
last spring that he was interested in selling the
2:38
company. And you know, clearly the leaks
2:41
for that's the sale process came from Monroe and his advisors.
2:45
And you know, he was seeking something worth of $10 million
2:50
in terms of valuation for the company.
2:53
And I think it's important to note that, you know, we're
2:55
pretty much there. And so for any event driven or
2:59
or merger ARB or speculators who are trying to see if there's any
3:03
potential upside from Global Star, we're pretty much at his
3:06
asking price. Now, it is possible that perhaps
3:09
the company could sell for a higher price than what is being
3:13
kicked around. However, I would say that it
3:16
sounds like there was some fall reporting, I think from SIM 4
3:19
saying that M and OS have taken a look at Global Star and it
3:22
passed and it seems like SpaceX, it probably passed as well.
3:25
I think for SpaceX, for those that are wondering, it probably
3:31
doesn't make sense for SpaceX to do this deal right now, just
3:34
giving that they've got their IPO, you know, coming up and on
3:39
top of that, they're trying to close the Echostar Spectrum
3:42
deal. And so from a regulatory
3:43
standpoint, you probably don't want to go into the FCC process
3:47
and you know, muddy the waters by going through the approval
3:53
process, which for Echostar, I think they're targeting sometime
3:57
the end of summer of 2027. And so by doing that deal and
4:03
then potentially getting Global star, that transaction going
4:07
through regulatory process, that just would complicate things
4:10
quite a bit. And so, so I think it's probably
4:15
off the table for SpaceX, but who knows, right?
4:19
Because I think from Spacex's perspective, if you look at
4:23
things from an antitrust point of view, for them to buy
4:26
Echostar Spectrum and then to purchase Global Star.
4:29
And then, yeah, there's like supposedly rumors that maybe
4:31
they're interested in Iridium. I think that's probably too many
4:34
deals for them to try to get through regulatory review.
4:36
But, but who knows. But I, I think from what I've
4:40
heard, it sounds like SpaceX that, that interest around
4:44
Global Star wasn't really there. And it seems like Monroe is
4:49
done. You know, he's, he's used the
4:52
press to kind try to draw up interest.
4:54
And, and it, it does seem like the Amazon interest is real.
4:57
However, who knows, right? Like they've for those that
5:02
don't know, I think Amazon had tested global stars, terrestrial
5:09
spectrum, this, this private and 53 band back in I think it was
5:13
like 2013, 2014 and they never pulled a trigger on it.
5:17
And so no, there, there is something familiar to do there.
5:21
But but we'll see. And I think, you know, one of
5:25
the key takeaways is that for those people who the naysayers,
5:29
you know, you've got all these like consultants who are at Sat
5:33
show who a year, two years ago were like, oh, direct to device.
5:37
It's not really a real market. It's niche.
5:39
And who knows, like if there's any real serious business that
5:44
can come come about it. And then of course, this this
5:46
time around sad show like that's all people talk about is
5:48
directed device. And those same consultants who
5:51
poo poo the market are now spreading rumors like that
5:57
SpaceX and Amazon and and everybody and their brothers
6:01
like trying to get into the market.
6:02
And so it's kind of paradoxical, right?
6:05
Kind of funny, but but yeah, I think, you know, for for Amazon.
6:09
So taking a step back like Global Star, what what do these
6:12
guys have? So they do have rights to 7.7
6:16
megahertz of L band and that's for uplink.
6:19
And then they've got 6 point 16.5 megahertz of S band for
6:23
downlink. And out of that S band actually
6:27
about 11 1/2 megahertz in the US, which is you know, the most
6:31
valuable market, 11 1/2 is actually carved out for
6:34
terrestrial use. And so not for MSS, but
6:37
peristrial private, you know spectrum use.
6:40
And so that's it's part now part of the three GPP standard and
6:46
global start for the longest time has been trying to sell,
6:50
you know, enterprises and companies on using this 11.5
6:54
megahertz of, of spectrum, which is similar to like, you know,
6:59
Wi-Fi, right? Like you could license that to a
7:03
company to use in, in certain geographies.
7:05
And, and that would be TDD or TDD, which is it's not full
7:10
duplex, but you would actually do both the up and down link on
7:15
that one channel. And so that's something that
7:18
Monroe has been trying to, you know, pitch to companies to M
7:24
and OS and and others as hey, we've got this like unencumbered
7:30
Wi-Fi, like spectrum that you could use.
7:32
And so I think Amazon could actually be quite interested in
7:36
that, that part of the spectrum for terrestrial use.
7:40
And that can be part of the reason why they're they're
7:42
pursuing this, right. And so, but I think you're
7:48
looking at global store overall just just to you know, level
7:51
set, what exactly is there. You know, you've got that again
7:55
the L band spectrum, 7.7 megahertz for uplink is 16.5
7:59
megahertz of S band spectrum for downlink.
8:01
However, 11.5 of that is carved out for terrestrial use in the
8:05
US. And then, and then you know,
8:10
with that, of course, you have Apple, which owns 20,
8:14
effectively 20% economic ownership in Global Star, but
8:17
then they have the rights to 85% of the current and all future
8:22
network capacity. And so Apple effectively has
8:25
what we call in deal parlance, a poison bill, right?
8:29
They have a veto on any deal. So they have a right of first
8:32
refusal. So let's say if Amazon, you
8:34
know, offered a price like Jay Monroe was like, hey, that's
8:37
great. I want to sell the company.
8:38
Apple would have the ability to top that offer if they wanted to
8:42
buy the company. But the key, the key question
8:45
there is to ask yourself is like, does Apple actually want
8:48
to own this company? And based off of the structuring
8:50
that they've, they, they put in place with global *, it's very
8:54
clear they don't want to own it. They don't want to become a
8:56
service provider. They want it, they don't want to
8:58
compete against their M&M customers.
9:00
They don't want to be a, an FCC regulated entity.
9:05
And so they don't want it, right.
9:07
And but what they did want out of this was to provide satellite
9:13
connectivity, like a new feature for their, their iPhones and,
9:16
and, you know, watches, which enabled SOS messaging, some
9:20
level of tracking. And they thought, you know, back
9:24
in 20, you know, when they negotiated this, I think in 2021
9:28
and then announced in 2022. And they, they threw like, you
9:31
know, under $2 billion at this. They're like, hey, we're going
9:34
to provide this new feature for the phone and it's going to help
9:37
help us sell more handsets. What they didn't foresee, for
9:41
whatever reason, is that, you know, AST Space mobile was going
9:44
to provide broadband connectivity and then Starlink
9:47
was going to get into the market as well.
9:49
And so, you know, for them, this is a very sub optimal situation,
9:54
right, because they're what was interesting back in 2022 is now
9:59
kind of a not, not a has been solution, but it's it's
10:04
something that's not very interesting, right?
10:07
Like for anyone who's used Apple's SOS messaging, you have
10:12
to like be outside, point the phone directly at the satellite.
10:15
You have to hold it there. You can send messaging messages,
10:18
which is, which is pretty handy. Like if they're in, when there's
10:21
like no other connectivity where you are, like if you're out in
10:25
the woods, it's great to have. But from a practical
10:28
perspective, you know, you can't do a voice call, you can't do
10:33
video or anything rich. It just is very short messages
10:38
and you have to point your, you know, the phone at the satellite
10:42
in order to send and receive messages.
10:44
And and that can take, you know, a few minutes to perhaps even
10:48
longer. And it's it's not very reliable,
10:50
right? But if you believe what the
10:54
information reported this over the last several months, you
10:58
know, Apple in the next iterations of the iPhone, they
11:00
want to get to a service support satellite service that will be
11:07
seamless, that will work in your pocket, that will work indoors.
11:10
And that's something that Global Star cannot provide today.
11:13
And it's not something that Global Star can provide for the
11:17
probably the the medium term or the future for that pattern,
11:20
right? And so, so that leaves Apple in
11:24
a pretty tough spot, right? Like they're, they've invested
11:27
in this company, You know, they've also fronted, they paid
11:31
off that for Global Star. They've also fronted capital
11:34
for, you know, upcoming consolation to not only, you
11:39
know, refresh the existing consolation, which I believe,
11:44
let's see my notes, I think Apple has is paying for about 90
11:48
/ 95 around 95% of the cost of replenishing the existing
11:53
consolation of global star satellite.
11:54
So, so MDA Space is building 17 satellites, which will just help
11:59
replace the current consolation. And then they have this plan
12:04
which they announced in February 2025, where NBA Space is going
12:07
to produce 50 Aurora satellites for the next generation where
12:12
they're calling C3 constellation for global star.
12:14
And so that one is going to be more capable.
12:17
There's not like a ton of details out about it, but it
12:20
will be, you know, these will be software defined satellites for
12:23
those that have followed some of my previous investments.
12:25
This will leverage Satixfy, the company that MDA Space acquired.
12:30
It'll leverage that technology, the ASICS there.
12:33
And so these highlights will have higher power.
12:35
It will have beam forming capabilities.
12:37
It will utilize the same exact orbits, but supposedly offer
12:41
better performance in terms of, you know, reaching a device that
12:45
is compatible indoors to a degree.
12:48
And also in cars, they'll be less of a need to Orient the
12:51
antenna towards the satellite. So what they're hoping to
12:55
achieve is better messaging, narrow band data, the ability to
13:00
allocate capacity more dynamically.
13:02
And so if there's more usually in the specific area, they can
13:05
put more capacity there versus having fixed capacity in in, you
13:09
know, all the areas of coverage. But there's no indication that
13:14
that consolation will have any ability to do broadband, right?
13:18
And so going back to what I was saying before about Apple, like
13:21
they're in a tough spot, right? Like they've got they've they've
13:25
got their chips in with Global Star.
13:26
It's a nice kind of backup service.
13:28
But in terms of the road map, like it's going to get better,
13:32
but it's not going to be broadband.
13:33
And so for Apple, like, what's the point of supporting this
13:37
thing when you don't have control over it, right?
13:40
Because they don't want control over it.
13:41
But then your partner is kind of weak because it's it's global
13:44
star and they need money and the technology's old and they're not
13:51
they don't have any innovation, right?
13:53
Like they're actually, they went out on ARP process and they went
13:57
to MDA space and said, hey, can you show me what you got?
14:00
Like I want to do these things and can you do them?
14:04
And MDA space is like, hey, here's the Aurora satellite.
14:06
This is the best we can do And they're like, OK, great, we'll
14:10
do that, but it's not good enough, right?
14:12
Because then they're competing against AC space mobile and
14:15
Starlink. And so for Apple, based off of
14:18
some of their reporting this past week, they're, they're,
14:22
they kind of want to get rid of being in this spot where
14:24
they're, they're tied to this kind of mediocre service that's
14:28
not going to get any better. And well, you know, you've got
14:31
Starlink and AST that are going to, you know, surpass anything
14:35
that they're doing near term, medium term, long term.
14:38
And so with that, you know, there is this idea that perhaps
14:44
Apple will exit global start because they are acknowledging
14:48
that train has left the station and why compete, right?
14:52
Because at the end of the day, like it's almost the the analogy
14:56
would be similar to where Apple has kind of made the right move,
15:00
at least so far, in AI, where it's like, hey, we're not going
15:03
to invest in AI. We're going to let open AI,
15:08
Google Anthropic, like Duke it out and then we'll just, we'll
15:12
be the gatekeeper. We'll allow people to access AI,
15:16
you know, pick their API on the phone.
15:18
And so all of a sudden the market's like, hey, that's
15:20
great. You're not spending money to go
15:22
do it and you're getting the benefit of on your phone.
15:28
You know, whether that or not that's a good long term
15:31
strategy, who knows, but at least Apple, at least from the
15:35
AI perspective, like maybe they're they're taking similar
15:38
attack for direct to device. And so, so that's where Amazon
15:42
comes in because then I think you know, for Amazon, they
15:47
they're, you know, they're clearly focused on fixed
15:49
wireless. They're they're doing launch.
15:52
They don't have a strategy and direct to device or IoT.
15:56
And so this could kind of feel that niche for them, right.
15:59
And so if you want to have the ability to offer, you know, a
16:03
full stack as it's like a overused term, but a full stack
16:07
offering versus Starlink, then direct to device is pretty
16:10
important. Now, does that mean that they're
16:12
going to go offer the service themselves and compete with
16:17
Starlink? That's somewhat questionable.
16:19
It's unclear, right? Because I think obviously Amazon
16:21
has the consumer relationship and they could offer a service
16:26
in tandem with with, with with their Leo service.
16:31
However, if it were a mobile device, that would be pretty
16:34
tough, right? Because you need terrestrial
16:37
spectrum, which is low band 600 and 900 megahertz to offer
16:41
something that's comparable to what M and OS provide.
16:44
I'm guessing Amazon doesn't want to get into that level of
16:48
service. Maybe they could do become like
16:51
a virtual network operator and partner with the Verizon or AT&T
16:55
and then they could lay around this new directed device service
16:58
on top of it. But I think I think going down
17:03
that route is not, is probably not going to be that
17:05
economically attractive, although Amazon could justify it
17:09
because they, they obviously, you know, they, they, they can
17:12
generate economics in other ways from consumers.
17:17
But I think for Amazon at this point, it's probably worth the
17:20
optionality, right? Because I think owning spectrum
17:23
is always a good thing. And for Amazon, they could in
17:28
the future, like once Starlink has built out their fixed
17:31
wireless business, they could use that satellite capacity to
17:35
then start building a direct to device consolation.
17:38
And it may not be focused on mobile phones, but it'll be 3
17:42
GPP compatible. They could do IoT, they could do
17:46
a bunch of different things there.
17:47
They could try to sell, you know, services to military.
17:50
There's a whole host of things that you could try to do, right?
17:52
Like the key thing is having the ability to build a, a cable
17:56
consolation and then having spectrum access to spectrum,
17:59
which AC has access to spectrum in two ways.
18:02
One is through its terrestrial, you know, they, they get access
18:07
to prime real estate terrestrial spectrum through M&L partners.
18:11
And then they of course have their L&S band strategy where
18:13
they bought 80 year usage rights of Legato in the US and Canada.
18:18
And then they have, they have ITU priority rights globally,
18:24
which they're going to, you know, for example, in Europe,
18:26
they're going to go through the regulatory process and get 2
18:28
gigahertz of, of spectrum in 2027 through the EU process.
18:34
But but for Amazon, like there is optionality and it's, and
18:38
it's somewhat cheap, right? Like it's $10 billion plus for
18:41
global Star. You get an existing consolation.
18:44
It's not great, but you know it, it is a consolation.
18:48
But the key thing is like you have these global rights for
18:50
spectrum And so Amazon could do a lot of things with that.
18:54
Now, you know, some people may ask, well, is this competitive?
18:57
Is it a threat to AST? It could be long term, but as
19:01
we've said before, like the market is going to be huge.
19:04
It's massive, right? Like it's not just mobile
19:06
phones, it's IoT devices. It's I mean we've seen now like
19:10
the company is getting golden Dome awards.
19:12
I mean, the company's with its particular satellite, you know,
19:15
technology, there's other applications beyond just a
19:21
broadband connectivity for mobile phones or IoT devices.
19:24
There's ten different military use cases for it, right?
19:27
Like sensing, jamming, GPS, all kinds of things, right?
19:30
And so Amazon could be thinking about some of these things too.
19:35
And so however, because it's Amazon in talks with Global
19:40
Star, it's probably not going to be, it's probably going to be
19:43
something that's more consumer focused.
19:44
It's not going to be, you know, if it, if it had more, I guess
19:48
military applications, then it could probably be an acquisition
19:52
done via the origin. So, so there, there is a lot of
19:57
optionality there. And I can see why Amazon wants
19:59
to do this because I mean, one of the biggest things, the
20:02
reasons why Amazon might want to do this deal is that again, they
20:07
want to preserve sociality, but there's also a defensive reason
20:09
too, right? Like if they truly thought that.
20:12
Starlink was going to buy global Star and this was kind of their
20:18
their one shot to to make a defensive play.
20:22
Then that might be reason enough to do this deal, right.
20:25
Like global Star, it's not like it's hemorrhaging a ton of
20:29
money. And so for Amazon, by acquiring
20:31
it, they can continue to provide service to Apple and then at
20:36
some point, you know, decide to make some changes in the future.
20:39
Now, as I mentioned before, this, there is a poison pill
20:42
here because Apple will have the final say and they can make life
20:45
hard for anybody who buys this. But maybe there's a world where,
20:50
you know, Amazon gets concessions for Apple in, in
20:54
terms of giving up the 85% of capacity rights.
20:58
Maybe Amazon, you know, Apple has been an extract serious, you
21:02
know, flesh for this, but in return, Amazon would
21:06
effectively, you know, provide Apple with a much better direct
21:10
to device, you know, service and, you know, some type of, you
21:15
know, financial and capacity commitments.
21:18
But but who knows? Like, I think it's very telling
21:21
that the, you know, the rumors were last spring last year and,
21:27
and now we're, it's one year later.
21:29
And now you've got, you know, leaks of a potential deal,
21:34
obviously coming from the global star side, because there's no
21:37
reason why Amazon would leak this and that, you know, hey,
21:40
they're, they're close to a deal and there's, they're working on
21:42
these complexities. Sometimes you see these leaks,
21:44
by the way, where the South side, the bankers or lawyers are
21:49
trying to draw up the interest. They're like, hey, Amazon's
21:51
really close. Like Are you sure SpaceX or
21:54
Google or someone like, Are you sure you don't want it, you
21:56
know, have another look or stop this before it goes away.
22:00
And so, so, yeah, I think, I think now, you know, I, I, I
22:07
couldn't tell you where the probability of a deal is because
22:09
this, this deal, if it does happen, it's going to be very
22:11
complex. And I'd be very curious to see
22:14
what the deal terms are. But as I've said before, you
22:17
know, it's because it's Amazon. There's a whole host of reasons
22:22
why they might want to buy this deal or do this deal.
22:25
It could be for satellite connectivity, or it could just
22:27
be purely for the terrestrial spectrum, right?
22:30
That 11.5 megahertz of spectrum in the US is quite valuable, and
22:34
it's already authorized for terrestrial use.
22:36
And so if you can imagine it being used, I remember Jay
22:40
Monroe telling people like, hey, we've got this premium Wi-Fi
22:44
service that people, you know, anyone could license this from
22:48
us and pay us royalty. And then they, you know, if you
22:50
could imagine Amazon, you know, providing terrestrial service
22:55
across the US for its customers like that, There's some value of
22:58
that, right? But I think the other thing to
23:00
keep in mind is that that eleven 5.5 megahertz of spectrum is low
23:05
power. They don't have regulatory
23:09
approval to to run high power. And so it would be primarily I
23:12
believe you know, solely for local networks.
23:16
And so it's not as if, you know, they could run a nationwide
23:19
network with towers, you know, lighting up that 2.4 gigahertz
23:25
of 11 1/2 megahertz of S band spectrum.
23:28
So anyway, but yeah, those are those are some initial thoughts.
23:31
I mean, I think the key take away here though, is that, oh,
23:36
the other thing I forgot to mention is, you know, Amazon
23:38
could also buy this global star, could buy Gold Star and then go
23:41
to a bell and say, hey, you've got satellites, I got the
23:45
spectrum. Can you light up my spectrum?
23:48
And you know, I provide this special Amazon service and a
23:51
bell would be like, yeah, sure, I'll do that.
23:54
So that would be another, you know, option for Bezos and
23:59
Amazon. They could leverage ASD space
24:02
Mobile's, you know, block 3 satellites which are focused on
24:05
mid band because this fits perfectly in the L&S band that
24:09
will be serving and allow Amazon to fry that service.
24:15
Another thing you can keep in mind is that if Amazon buys Gold
24:18
Star, I guess, you know, there's this possibility that they could
24:21
try to get Verizon or AT&T or T-Mobile to, to utilize their
24:28
service. But I would just point out that
24:32
M and OS are wary of Amazon, just like they're wary of
24:35
SpaceX. And so any type of relationship
24:39
where Amazon clearly owns the customer through its Prime
24:43
service. And so I think AT&T, Verizon and
24:47
T-Mobile would be wary of, of giving their customer control
24:51
over to Amazon. And as we all know, this is
24:55
another thing to point out. I think Amazon is contemplating,
25:00
you know, coming out with AI devices and a potentially a
25:03
mobile phone again, those those, you know, some folks will
25:06
remember that Amazon tried to create the fire phone or
25:09
whatever it was, But that's that's another wrinkle.
25:12
I think that's probably going to be tough for Apple to sort out.
25:15
Like if they do want, they ultimately do acquiesce to
25:19
Amazon buying global star. They also probably the back end
25:23
minds know that Amazon's probably going to roll out a new
25:27
phone. And So what does what, what kind
25:29
of implications does that have in terms of, you know, enabling
25:35
a, a future competitor? So there's a lot of stuff going
25:37
on here. It's it's very complex.
25:39
I'm just pointing out like some of the, some of the issues to
25:42
think about. But but yeah, it's not, it's
25:45
not, it's not very straightforward.
25:46
The other thing I would say is I did see MDA space rallying on
25:50
Friday. If Amazon buys global star, on
25:53
the one hand, from a credit perspective, like that could be
25:56
good. You know, like Amazon may go to
25:59
MDA space and say, hey, we're going to, we want a bigger
26:01
consolation, We want better specs.
26:05
Can you go build it? But that, that if you think
26:08
about it like they already had that with Apple, right?
26:10
Like Apple is about as good of a credit as it gets.
26:13
And, and Apple is already fronting all this, this, this
26:16
investment for this new consolation.
26:18
So I'm not, I don't think Amazon changes that.
26:21
And actually what I think the market got wrong is that this is
26:24
like a huge risk for MBA space, right?
26:26
Because like for Amazon, they're already building, you know,
26:30
hundreds of, and ultimately what will be thousands of Leo
26:33
satellites. So they're, they've already got
26:36
like satellite prowess, you know, satellite making prowess.
26:39
And so if anything, if Amazon does buy Gold Star, they'll
26:44
probably bring satellite design and production in house.
26:48
And so I think the future, you know, once the 17 satellites are
26:53
done to replenish the global star constellation, that future
26:56
50 satellite order, 50 plus satellite order for Aurora, I
27:01
think that's going to be a huge risk.
27:03
And so I think, I think MBA space potentially because it was
27:08
a pretty big customer here. So anyway, there's some
27:12
additional thoughts. I, I still, I've got to think
27:14
through this one a bit more. But I think the take away
27:19
though, is that this market, you know, direct to device the, you
27:25
know, the, the, the whole thought that this is a niche
27:30
market and that it's not going to be very big, be very big.
27:34
You're seeing, you know, SpaceX spend over $20 billion on
27:38
spectrum. Amazon's in talks to buy global
27:41
star from plus ten billion possibly, you know, maybe
27:45
Iridium. I don't, I don't know if Iridium
27:48
is going to get acquired, but clearly they own some valuable
27:51
spectrum. But, you know, can, can Matt
27:56
Dash actually get someone to lease his spectrum, which is
28:01
what, you know, he talked about on the call, the last earning
28:04
call. You know, it's possible.
28:07
So clearly, like this is a a big area of strategic focus.
28:12
And so it's it's, as I said before, it's kind of funny that
28:15
you've got at least legacy guys in the satellite industry poo
28:18
poo directed device for gosh, maybe it's been almost a decade
28:24
now. And now everyone is this is all
28:27
they can talk about, right? Like you've got ViaSat, you
28:31
know, SES everybody and their brother is talking about, Hey,
28:34
we've got a directed device strategy and this is the best
28:37
thing since sliced bread. So it's just kind of funny
28:41
seeing that. And even these supposed
28:43
consultants who Pooh poohed it for many years now it's like the
28:46
only thing they can talk about, right?
28:47
Like I think Tim Farrar was the one who was like spreading the
28:50
SpaceX rumor, like, oh, the deal's eminent.
28:52
And of course it didn't happen. And then someone shared to me
28:57
that he's doing a call with Deutsche Bank to tell talk to
29:00
people about the, the landscape, because clearly like a lot of
29:04
Benjamin investors and, and hedge fund guys are our falling
29:08
industry. And, and you know, whether
29:10
people have investments in ACOSTAR or Iridium or Global
29:15
Star, I mean, clearly people have made a lot of money AST 6
29:17
mobile too. Everybody wants to learn more
29:21
about this industry and unfortunately they're learning
29:23
from Tim Farr, but that's OK because that that's how we make
29:26
money and those guys don't make money.
29:28
But anyway, so moving on, let's see, I didn't want to give some
29:35
a bit more color on production for ASD space mobile.
29:38
So obviously, like everyone's focused on batch production and
29:42
you know, and there's been some anxiety on Twitter.
29:46
It's like, what's the company doing?
29:47
And, and I think it's I, I finally got a chance to catch up
29:50
on for most of Kook's space. And I think he said it rightly,
29:55
which is what I've been saying too, is that this stuff is not
29:58
easy, right? Like if, if a bell, it's not as
30:01
if a bell or management, they were trying to slow roll things,
30:04
right? Like they, they want to get
30:06
things done quickly, but you have to especially for the
30:09
company's DNA, like you, you want to get things done the
30:13
right way the first time, all the time, right?
30:16
And so if this stuff was easy, then other people would be doing
30:20
it right. But there's only one company
30:22
that created this market and innovative and, and of course
30:26
you got Starlink, you know, following and, and, you know, in
30:30
terms of competition, just to reiterate, like what Starlink is
30:34
doing with their first generation satellites is, is
30:37
pretty much like narrowband messaging.
30:39
The second generation satellites, they're going to try
30:41
to catch up to what the block 2 satellites are capable of now,
30:44
but by then, which is, you know, 20, what, 20272028, we will have
30:49
moved on to additional iterations.
30:52
And so, and even then, I, I'm not even sure like those will be
30:56
broadband for, for Starlink. But anyway, I didn't want to
31:00
provide some color. So, you know, when the company
31:03
did talk about stacking being a problem.
31:07
And so for those that, you know, have followed this closely or
31:10
haven't followed closely, you know, AST has these tuna cans or
31:14
rings as well haul them. And in order for the next
31:17
generation to, in order to send enough in a, in a rocket launch,
31:25
you have to save as much weight as possible.
31:26
And so the company has gone the extra effort.
31:30
So, you know, like, for example, I think Alan, this past week or
31:35
so, I tweeted about how steel was a, a natural, a great
31:39
solution for them for Starship. And he talked about how, you
31:44
know, using aluminum has, you know, it's not as strong and
31:49
there's like structural issues there have been then composites
31:52
are just too difficult, right? Like it's, it's, it's very
31:54
expensive to deal with. Well, STS decide go down the
31:57
composite route where you, if you invest the time and energy
32:02
into developing satellites with composites, it is tough as hell
32:07
and it's hard to get off the ground.
32:09
But once you do it, the weight savings versus and, and the
32:13
strength they get out of that are, are unparalleled, right?
32:15
And so the company, you know, I think they, they got their first
32:21
batch of composites and when they tested them, you know, I
32:25
think they, they found that they were not structurally strong
32:27
enough. And that this is what can happen
32:29
with composites where, you know, when you go through modelling
32:34
and you, you come up with designs, they may not stand up
32:41
to the, to actual physical tests, right.
32:43
And so, you know, whether you've got a, you know, for, for the
32:48
company, they had to go back to their drawing board in some
32:50
respects and they had to solve this issue which is stacking,
32:54
right? So if you can imagine, like if
32:56
you have three of these satellites or four of these
32:57
satellites stacked, the vertical, the vertical, you
33:03
know, pressure that especially the bottom satellite has is
33:06
tremendous, right? Because it's got to support 3
33:08
satellites above it. And then for that second
33:11
satellite, it's got to support 2 satellites above it.
33:14
And so it's not just vertical, but it's also horizontal because
33:17
it's, for example, in a Blue Origin rocket, you've got these
33:22
things have to be, you know, they get, they get when it's on
33:26
the launcher, the rocket is sideways and then it gets, you
33:29
know, it gets lifted up vertically.
33:31
But anyway, from what I understand, I think the company,
33:35
you know, solved this issue back in February or sometime over the
33:39
course of February. And so if you can imagine that
33:41
tuna Cam, like if it's vertically not strong enough,
33:45
what you can do for the rings is you can put maybe tubes around
33:50
it, right? Like whether it's composite or
33:53
potential metals like you, you can reinforce it.
33:56
And you do that to the point where you don't want to add too
33:59
much weight, but you want to add enough where at least the bottom
34:02
ring is strong enough to support the top three.
34:04
And then that that then the second one is strong enough to
34:07
support the top 2 or, or one and then you know, and so on, right.
34:11
And so I believe the company, you know, solved this in
34:14
February. And then obviously then you've
34:17
got to integrate the payloads. And here, you know, there when
34:25
you, when you talk about payloads, that that includes the
34:27
microns and then everything that goes inside as well.
34:30
And so I believe, you know, the company had talked about having
34:33
enough microns built. I think perhaps maybe the
34:36
company is now around they, they've made enough microns for
34:39
30 satellites. And so they've, they've built a
34:41
lot of these things, right, in terms of microns and, and I
34:44
believe payloads, you know, I'm not sure exactly how many
34:46
payloads they have, but now that they've solved stacking, meaning
34:51
so the, the, whatever rings that they have on site, they've,
34:54
they've reinforced them properly And so they can use those.
34:57
And then you've got to integrate the, the microns and the
35:00
payloads into the, the tuna can. And then you've got to go
35:03
through testing, right? And testing takes some time, but
35:07
it sounds like the company's probably or not probably they
35:09
are on target to get the first batch done by the end of April.
35:14
And then that first batch will get shipped to, you know,
35:18
Florida and it'll go up on Falcon 9.
35:21
And then shortly thereafter there'll be another batch,
35:22
right? And so we're kind of at this
35:26
point where we've reached terminal velocity for production
35:29
Hall where they solved SAC in February, They're now
35:31
integrating payloads. They now got to test them.
35:35
And so I think we're going to start seeing a much faster
35:38
cadence where the company is confident that they they are
35:43
still on target for 45 satellites for 2026.
35:46
Now that's going to be, I mean it's going to be pretty much
35:48
gangbusters, which is actually going to be quite fun to watch
35:52
because they're going to start pumping out these batches and
35:54
sending them down to the Cape where you know, the 1st 2 are
35:57
going to be Falcon 9 launches. You know, we might see for those
36:00
that have been falling closely, we've seen you know, obviously
36:03
we're waiting for New Glenn 3, which I think that's now
36:06
targeted for sometime April 12th, so potentially April 14th.
36:10
But beyond that, you know, putting that one aside, like the
36:14
origin is now got an STA for New Glenn 4-5 and I think 6 or or
36:21
yeah, maybe they got 6 already. And so you know how many of
36:26
those are going to be for AST space mobile?
36:28
It's unclear. But let's if it's even just two
36:31
of them and you stack 6 to 8 of these satellites, that's going
36:36
to go pretty far away in terms of being able to hit your, you
36:39
know, 45 cadence for this year. So but yeah, I think, I think
36:44
we're kind of at this point where the company is very
36:48
confident they've saw sacking. I one thing I forgot to mention
36:51
is that as part of that solution, the, the, the ring has
36:58
been designed. And so instead of retrofitting,
37:00
you know, these tubes to strengthen the ring, the future,
37:06
you know, rings which call it say Bluebird 13 plus, those are
37:13
actually going to have composites at the source that
37:16
are going to be that are designed to be, you know, that
37:19
have these improvements where they're going to be strong
37:21
enough. And so, so yeah, I think, I
37:24
think now we're in this like target zone where once April
37:29
kicks off, like it's going to be non-stop.
37:31
And so my guess is, you know, this, this, this average of 1
37:35
1/2 launches or one, one to two. What what was it 1 launch every
37:41
one to two months? We actually could start seeing
37:45
probably more like if they're going to get to the, the 45 that
37:48
they need, it's, it's, it could be more like 2 launches a month
37:51
or who knows. But anyway, I just wanted to
37:54
pass that along because I think I think that's an important
37:56
point where, you know, who talks about the, the production
38:03
Constipation. I think we're now kind of at the
38:05
point where we're going to have production diarrhea, you want to
38:10
call it, where these things are going to be funny out like
38:12
hotcakes into the fact that, you know, for example, we've got 30
38:17
satellites worth of microns already built.
38:20
We just now need to get those composite rings in the door, get
38:25
get everything the, you know, the microns, the rest of the
38:28
payloads integrated and tested and then, you know, shipped.
38:31
So, so yeah, I mean, I think the company is is very confident
38:37
now. We've kind of gotten over this
38:39
hum. Now in terms of the Blue Origin
38:41
New Glenn three launch, yes, it's been delayed and that's
38:46
pretty much out of the company's hands.
38:48
I mean, as everyone knows, like we sent the satellite down to
38:51
The Cave quite some time ago. But as I've mentioned before,
38:55
you know, that New Glenn three launch is absolutely critical to
38:58
show that they can do a refurbish and relaunch.
39:02
And so they want to make sure that they get that right.
39:05
And whatever hiccups or or things, you know, double
39:09
tracking that they want to do, like that's just causing this
39:12
thing kind of get pushed back, which it is what it is and I'm
39:15
OK with it. So anyway, the last thing I'll
39:18
mention then I've got a hop, but Space Force, this was in a
39:25
retweeted space case Taylor's tweet about this.
39:28
But the numbers, some numbers came out yes, today which were
39:32
quite staggering. I think for this coming year,
39:36
the Space Force budget for funding is, is the request is
39:42
$71.2 billion, which is 77% higher than 40 billion, which is
39:48
budgeted in 26. And so, yeah, this just like
39:53
underscores how important space is for the US in terms of, you
39:59
know, strategic priorities where I think companies like AST Space
40:03
Mobile, Rocket Lab, Planet Lab, any, you know, you name it,
40:06
Black Sky, any of these other companies like it's going to be
40:10
a key focus, right? Like it's spending is only going
40:12
to go up and whether you know, especially for companies that
40:17
have. Dual use case, which AST does,
40:21
which is you know it's got the commercial side, but also the
40:23
government, you know, defense side.
40:26
It's going to be a very interesting, you know, next 2-3
40:30
years, right? And you've obviously got this
40:32
basics IPO coming up, which I didn't even talk about like the
40:36
bankers, I believe talk, you know, discussing a $2 trillion
40:41
valuation, valuation range, which is, which is pretty crazy.
40:45
But but yeah, things are, things are coming together.
40:48
And I think for AST, obviously production can't come in
40:52
production and launch, you know, the affirmation of, of six hours
40:56
per month, which I think is going to come, you know,
40:58
sometime by the end of, of Q2. Obviously they, they could be at
41:03
4 satellites a month, 5 satellites a month, but
41:04
eventually you get to 6 with the delays that we've had, you know,
41:09
they're, I, I believe they're probably hoping to reiterate
41:11
that or, or to confirm that by by the end of the second
41:15
quarter. But yeah, I think I think all
41:20
the pieces are, are coming are lining up, right.
41:23
And so, you know, maybe this global star deal will happen and
41:27
it'll bring even more strategic focus to the, the sector.
41:31
And you know, I mentioned this before, you know, a CS testing
41:34
with Apple, it's testing with Meta, it already has a
41:37
partnership with Google. And so, yeah, if if Amazon does
41:43
pull the trigger on Google Star, like does that 'cause other
41:47
strategic movement, right? Because then AST space mobile
41:50
becomes from a strategic perspective, much more
41:53
interesting or for everyone else, right?
41:56
Oh, and, or maybe Amazon is like, hey, AC, where can we use
42:01
your satellites to light up the spectrum that we just bought?
42:04
And so anyway, I'll close it. There I am.
42:09
I will be back home next week. And so we'll be more active.
42:13
But but yeah, I'm I'm interested to see what what happens in the
42:17
coming week. And obviously there's a lot of
42:19
stuff going on in Iran and, and yeah, for near term volatility,
42:24
that's not good. But I think as Michael Pollock
42:27
said it in a presentation, it's hot show, like the conflicts in
42:32
Iran and Venezuela, just, you know, highlight the importance
42:37
of what AC is doing. And you didn't specifically
42:40
allude to exactly what that meant, but I think we all kind
42:43
of know. And so I think the importance of
42:46
what the company's doing by the is increasing by the day, right.
42:51
And so if you're an investor in ASD, we're in a very good spot.
42:55
So I'll end it there. Thanks, everyone for joining.
42:57
And yeah, as as this stuff kind of evolves and unfolds for
43:02
Amazon and maybe you're, you know, something related to
43:05
Iridium and what have you. Yeah, it will be interesting to
43:09
see, you know, what the implications are for AST.
43:12
And my personal view is I think the company's strategic value
43:15
just keeps going up. So thanks, everyone for joining
43:18
and we'll talk to you soon. Take care.
43:22
Thanks for listening to the AST Space Mobile Podcast.
43:26
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big an activity technology. We can really affect billion
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43:53
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43:57
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44:01
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44:05
regardless of where you are, we don't want the user even to know
44:08
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44:10
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