Latest / AST SpaceMobile Podcast / Anpanman - The $10 Billion Space Race: Amazon, Globalstar, and the Future of AST SpaceMobile

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Anpanman - The $10 Billion Space Race: Amazon, Globalstar, and the Future of AST SpaceMobile · AST SpaceMobile Podcast

• 0:06
  This is the AST Space Mobile podcast and.
• 0:10
  We just basically from your phone and be seamless regardless
• 0:14
  of where you are. We don't want the user even to
• 0:16
  know that it's connected by satellite.
• 0:21
  Listen, the opportunity that we have is very, very, very large.
• 0:28
  Hey everyone, thanks for joining.
• 0:29
  We've got some big news today and I apologize in advance.
• 0:34
  I've become sick again. So my head is a bit cloudy, but
• 0:38
  I figured fire up space and, and talk about this deal that was
• 0:42
  long rumored and it's finally come to fruition.
• 0:45
  So Amazon just announced that they're buying Global Star for
• 0:48
  $90.00 in cash and stock. It's it's going to be an
• 0:52
  election for shareholders and there's a limit to how much
• 0:55
  stock gets paid out. But it looks like the
• 0:57
  transaction is probably going to close in 2027.
• 1:00
  My guess is that the regulatory review is going to be pretty
• 1:03
  long. My I had a minimum maybe nine
• 1:05
  months. And so this deal is going to
• 1:07
  trade for a reasonably widespread, I think unless
• 1:10
  people think there's a chance that SpaceX comes back and tries
• 1:15
  to, you know, post going public, maybe tries to top this deal.
• 1:18
  But that would seem kind of like a fool's errand 'cause you're
• 1:22
  going up against Amazon. So I don't really see that
• 1:26
  happening, but it's possible. So I think this thing's going to
• 1:28
  trade pretty wide cause of the regulatory view will be pretty
• 1:32
  long. And that will require obviously
• 1:35
  FCC and I'm guessing the DOJ is probably going to review this
• 1:40
  from an antitrust point of view, but it should get cleared.
• 1:42
  And and yeah, so that pretty interesting deal.
• 1:46
  I mean, I think for all the bears out there who talk about
• 1:50
  this, this market being too small, now you've got SpaceX
• 1:54
  spending $23 billion on Spectrum and Amazon shelling out well
• 1:59
  over, you know, $10 billion for Global Star, which, you know, is
• 2:03
  a legacy satellite company. The key assets here obviously
• 2:08
  are, are the Global Harmonize Spectrum.
• 2:10
  And if you look at the press release, Amazon is planning to,
• 2:15
  you know, in partnership with Apple, 'cause, you know, for
• 2:20
  some background, Global Star is a bit of a albatross for, for
• 2:24
  Apple, given the ambitions that Apple wanted for their, you
• 2:29
  know, satellite service. And then of course, Starlink
• 2:31
  and, and AST surpassing what global star can do now or for
• 2:36
  the medium to long term as well. And so by Amazon coming in with
• 2:40
  capital and know how know how on the Leo side, they're going to
• 2:45
  be able to put together a better service.
• 2:48
  And so for Apple that, that that solves their, their issue there.
• 2:51
  Obviously it's a bit of an odd marriage because I think for
• 2:55
  Apple, they are competitors with Amazon in various areas for
• 3:00
  consumer business. And, and eventually, you know,
• 3:03
  there's some talk about Amazon coming back to the phone handset
• 3:08
  market and developing an AI device as well.
• 3:10
  And so those two will maybe increasingly come into conflict.
• 3:16
  But at least for this particular business, they seem to have
• 3:20
  worked out something which I think the information maybe it
• 3:24
  was like 2 years ago and a year ago the articles suggested that
• 3:28
  Apple kind of view global star as something that was not
• 3:31
  sustainable because it wasn't a core focus for them.
• 3:34
  And then, you know, obviously the, the relationship there was
• 3:36
  not optimal. And so perhaps this can change
• 3:39
  that dynamic or maybe not. But you know, today Amazon did
• 3:44
  announce that they are going to enter into the directed device
• 3:46
  market. And as I said before, those
• 3:50
  people who who pooed this market and said it was too small, now
• 3:53
  you've got SpaceX and Amazon going head first.
• 3:56
  Of course, you know, Apple making sure that their devices
• 3:58
  are compatible. But but yeah, this market is
• 4:02
  huge and it's probably going to be bigger in terms of Tam than
• 4:05
  than people think. So this is a huge vote of
• 4:09
  confidence for this market. And yeah, I think I think
• 4:14
  overall that's that's quite bullish for what will be the
• 4:17
  leaders in the market, which I think ultimately are going to be
• 4:20
  ASD Space Mobile, Starlink, and then we'll see where Amazon
• 4:23
  falls on that. Just being, you know, a late
• 4:26
  player, but very powerful player.
• 4:29
  I think it's important to note that spectrum value has been
• 4:32
  underscored here. And you know, for those that
• 4:35
  know ASD Space Mobile owns Legato for 80 years.
• 4:39
  So you know that that the, the life of that lease is going to
• 4:45
  be longer than I'm alive. But in terms of value
• 4:47
  extraction, they're going to get a ton of economics from that,
• 4:51
  right. And so by having Legato covering
• 4:55
  US, which is the most powerful market in Canada, there's
• 4:58
  tremendous value there. If you do some of the parts
• 5:00
  analysis, you know, I would peg Legato's value it probably, you
• 5:05
  know, call it once it's fully deployed, you know, let's say
• 5:09
  it's $20 billion, right? And so and, and as people know,
• 5:13
  AST based mobile satellites are the only ones that can utilize
• 5:17
  that spectrum effectively on a non interference basis which has
• 5:22
  plagued Logato in the past. And so taking that $20 billion,
• 5:27
  you know that's a pretty hefty piece of AST's value today.
• 5:31
  And the rest of the businesses is option value.
• 5:33
  So you get the commercial business and then you also, of
• 5:36
  course you get the defense business as well.
• 5:39
  So I think today just really underscores the value of
• 5:42
  spectrum and how smart management was in closing the
• 5:47
  Legato transaction and also getting MSS spectrum rights
• 5:51
  globally. And so, yeah, that's that's just
• 5:55
  a big under score value there. But anyway, going back to Amazon
• 5:59
  and global star, it does look like, you know, Amazon's going
• 6:02
  to continue in the filling the are paying for the, the, the
• 6:09
  replenishment of the current global star constellation.
• 6:11
  So that that's a mild positive for MDA space.
• 6:14
  However, if you look at this press release, you look a little
• 6:17
  bit closer. It looks like Amazon's going to
• 6:19
  develop their own direct to device satellite, which will
• 6:23
  then, you know, kick in after that replenishment cycle.
• 6:27
  And so they're, they're saying that they're going to try to
• 6:29
  launch sometime in 2028. And as we all know, in space,
• 6:33
  that's probably going to be maybe one to two years later
• 6:36
  than they expect. If you look at the development
• 6:38
  timeline for Amazon Leo, the fixed broadband satellites.
• 6:42
  But if they can get there in 2028, you know, you know that by
• 6:46
  that time, the the AC mobile service and and Starlink's
• 6:50
  service, I guess they're next generation satellites will start
• 6:53
  rolling out then that's what they'll have to contend with.
• 6:56
  But the model here will be interesting because I think
• 7:00
  Amazon, you know, if you're taking a very, you know, if he
• 7:06
  gets that back and think about announcing this transaction,
• 7:09
  they probably had to, they obviously they, they worked
• 7:12
  closely with Apple to kind of iron out how that relationship
• 7:17
  would work. And, and so obviously, you know,
• 7:19
  Amazon's going to continue to support Apple devices and then
• 7:23
  and the current consolation, but eventually that consolation will
• 7:25
  get phased out and then they talk about potentially working
• 7:28
  with M and OS and other partners.
• 7:30
  And so I could see a world where, you know, Amazon will
• 7:35
  offer an IoT network, which you'll have any number of
• 7:39
  customers interested in that as IoT will be a big market for
• 7:43
  everybody. But then when it comes to M&O
• 7:46
  partners, I'm not sure who they would work with.
• 7:48
  I think if it's T-Mobile, Ryzen or AT&T, those folks would be
• 7:54
  leery in working with Amazon just given that Amazon again is,
• 8:00
  you know, with their Leo service is going to be competitive with
• 8:03
  home broadband, whether that's fiber or 5G home.
• 8:07
  And then of course, M and OS I think would be, you know,
• 8:12
  cognizant of the fact that Amazon might have larger
• 8:15
  ambitions to try to compete on in the wireless side threshold,
• 8:19
  right. But of course, you know, it's
• 8:22
  hard to do that because you would need terrestrial spectrum.
• 8:24
  And so perhaps Amazon could enter into an MVNO type of
• 8:29
  relationship. But but yeah, all this stuff,
• 8:31
  there's a lot to unpack here. So I'm not really sure which MN
• 8:35
  OS might work with them. But then, you know, you also
• 8:38
  have to look outside the US And so if the US market is locked
• 8:40
  up, Amazon does have does sell products and competes in a
• 8:46
  number of international markets. And so they, they could find
• 8:50
  openings elsewhere to work with M&O's.
• 8:52
  And so I mean, it is Amazon and you know, I'm sure you could
• 8:56
  find M&O partners that would not be or not feel threatened by
• 8:59
  Amazon and to work with them, but that's something that
• 9:02
  they'll have to figure out. That said, it does make sense
• 9:04
  for Amazon to come in and you know, acquire the company and
• 9:10
  buy what is essentially Harmony spectrum globally.
• 9:13
  So, so that's a positive, right? No one ever well, if you have a
• 9:18
  time frame of it's just like home home ownership, right?
• 9:21
  Like if you buy a home and you're looking to flip it in a
• 9:24
  year or two, you may not, you know, you always have to worry
• 9:27
  about whether you're buying the top or the bottom.
• 9:29
  But if you have a time raise in a five years or longer, it
• 9:32
  doesn't matter where you buy a home in terms of price,
• 9:35
  eventually in in good markets like that, you will make money.
• 9:40
  And so for so for Amazon, buying spectrum as a strategic asset
• 9:46
  makes a ton of sense. I mean, for Amazon, the
• 9:48
  optionality is that they can build satellites and try to
• 9:51
  launch a service, you know, hopefully cobble cobble together
• 9:54
  some partners or if they decide to not build satellites, then
• 10:00
  they could have someone else light up the spectrum, whether
• 10:02
  that's AST or somebody else, right.
• 10:05
  And so I think I think for Amazon, it's a smart deal
• 10:09
  because I think for, you know, acquiring, acquiring spectrum
• 10:13
  rights and, you know, having a relationship with Apple is good.
• 10:18
  And, and so for, for them, you know, the transaction makes
• 10:22
  sense. And then for Apple, at the end
• 10:26
  of the day, like Apple, all they care about is selling more
• 10:28
  phones, right? And so they're not looking to
• 10:30
  get into the service provider business, which clearly if they
• 10:33
  were, they would have done this deal themselves.
• 10:35
  But for them, it's the key thing is, is selling as many phones as
• 10:38
  possible and offering features that are unique.
• 10:40
  And so they're hoping that Amazon can give them something
• 10:43
  unique in 2028 and beyond. I think the key thing though is
• 10:48
  as Space Mob has followed hiring at Amazon, I don't, I think they
• 10:53
  just started looking for a directed device people.
• 10:56
  And so it's going to take time for them to actually develop a
• 10:59
  working satellite in this area. And then if they're smart,
• 11:03
  they'll, they'll go to 1st principles and try to develop
• 11:06
  something similar to what AST has, right?
• 11:10
  As opposed to going down the route that SpaceX took, which is
• 11:13
  slap something together quickly to get service out and then
• 11:16
  hopefully change it over time. But but yeah, this is an
• 11:20
  interesting deal. I think, you know, for, for a
• 11:24
  bear, they might be like, well, Amazon's now a competitor of
• 11:27
  yours. And so that's going to be, you
• 11:30
  know, that could crimp your growth or reduce the size of
• 11:32
  your Tam. I would argue that this
• 11:35
  validates the Tam and, and just shows how large the opportunity
• 11:38
  is. It's not just mobile phones,
• 11:41
  it's IoT devices. And we're just talking about
• 11:43
  commercial, right, for AST, like you've got the commercial
• 11:47
  business and you also had the defense business.
• 11:49
  And so it's very here you're seeing a huge validation.
• 11:53
  And you know, I think the key thing is that from a competitive
• 11:57
  standpoint, now you've got SpaceX and Starlink and XAI and
• 12:04
  Tesla. So that's all like one vertical
• 12:05
  stack. And now you've got Amazon and of
• 12:09
  course Amazon is leveraging Blue Origin.
• 12:11
  And so, and then Apple is friendly in some degree at
• 12:16
  least, you know, they're supportive.
• 12:18
  And then you've got these other players too, these other players
• 12:22
  called, you know, Open AI, Google, Meta.
• 12:25
  I mean, Google and Meta are already working with AST.
• 12:27
  And So what do those guys do, right?
• 12:30
  And so I've seen this like in tech where when you have an
• 12:33
  industry that's highly attractive with great growth
• 12:36
  prospects and profitability, then you've got large players
• 12:40
  that come in and consolidation happens.
• 12:43
  When you have a leading technological player that's
• 12:48
  independent and then you've got a number of players who haven't
• 12:52
  made a booze yet, then that player that's left standing, the
• 12:54
  one in one company becomes that much more strategically
• 12:58
  critical, right? And so in cases you might have
• 13:02
  situation where that company gets bought or it gets strategic
• 13:05
  investment or it gets strategically in line with these
• 13:07
  other companies. I think it's probably too early
• 13:09
  for that for AST because I think, I don't think, I don't
• 13:13
  think a Bell's selling and someone did, I guess an
• 13:16
  institution had mentioned to me that he was pretty sure Amazon
• 13:20
  tried to try to acquire AST. And you know, I, I have no way
• 13:24
  to validate or validate that or whatever, but I, I just don't
• 13:28
  see about selling. And I think the strategic value
• 13:31
  for AST in terms of value creation is, is staying
• 13:34
  independent, right, 'cause I think the M and OS, they see
• 13:39
  encroachment from Starlink and now Amazon, they want to work
• 13:43
  with a player that's independent, right, That is not
• 13:46
  owned by a large tech company that is seeking to ultimately
• 13:51
  compete right, with with the M and OS, whether that's
• 13:55
  controlling the customer or selling other services.
• 13:58
  And so remaining independent in this market, I think is, is
• 14:02
  going to be highly valuable, right?
• 14:04
  And so, so I think from a strategic standpoint, as I said
• 14:09
  before, you know, we've already, I mean, Google has a strategic
• 14:12
  investment in AST. We know that Meta is working
• 14:14
  with AST. Now all of a sudden this chess
• 14:18
  piece, you know, this move happened today, the strategic
• 14:22
  value of AST goes up, right? And I think for Iridium too,
• 14:26
  their spectrum is valuable. It's not paired spectrum.
• 14:30
  It's just a single swath of spectrum in the L band.
• 14:34
  But eventually that company, that spectrum as, as Kathy says,
• 14:40
  like we'll find the optimal use, right?
• 14:42
  And so I think Iridium over the long run, and Matt Dash has
• 14:46
  talked about this, I think they will either lease that spectrum
• 14:49
  to another player, like a majority of it.
• 14:51
  They don't for Iridium. They actually only need just a
• 14:54
  small part of it to operate their, their business, But they
• 14:57
  might lease it to someone or they might eventually get
• 15:00
  consolidated, right. I, I don't know when that would
• 15:02
  happen. And the other thing to keep in
• 15:04
  mind is when you go through these regulatory reviews with
• 15:08
  the DOJFCC, like they're going to look for anti competitive
• 15:12
  behavior or, you know, mark how the market structure changes,
• 15:15
  which is why I don't think SpaceX would have been allowed
• 15:17
  to buy global star, whereas Amazon, because it's more decent
• 15:21
  in its development of the Leo service.
• 15:25
  And then they don't really have, you know, anything around direct
• 15:28
  to device. I think it they make sense where
• 15:30
  that this transaction will get allowed.
• 15:33
  But going back to that, you know, I think for Amazon the the
• 15:39
  need to have direct device I think is important, right.
• 15:42
  And so whether they do that independently, you know
• 15:46
  utilizing the spectrum then they put up their own satellites
• 15:48
  which makes sense, right. Like if you have satellite
• 15:52
  development and production capacity, then eventually once
• 15:57
  you get to consolation up, you want to put that capacity
• 16:00
  towards other productive uses. And so it makes sense for them
• 16:02
  to try to put up a director device consolation.
• 16:06
  Similarly for AST, right? Like once they're done with
• 16:09
  block one, sorry, block 2 and block 3, then they're going to
• 16:13
  put up a government shell, right?
• 16:15
  And so eventually because they have that that know how in
• 16:18
  capacity that eventually is going to happen.
• 16:21
  So I think for yeah, I mean, I think the market for the people
• 16:27
  who haven't followed this market closely, the initial reaction
• 16:30
  might be negative where they they'd say, Oh well, this is
• 16:33
  another competitor to AST and so maybe their opportunity set goes
• 16:37
  down. But I would argue that let let's
• 16:42
  kind of line up the strategic aspects for AST, right?
• 16:46
  Like so they've got, they've got 45 megahertz of L band spectrum
• 16:52
  that they own for 80 years in North America.
• 16:54
  So the US and Canada. So that that's what 2020, let's
• 16:58
  just say 20 billion out of 3038 billion in enterprise value.
• 17:03
  So pretty big, you know, value there.
• 17:06
  And then they they're working with, you know, 50 MO's
• 17:10
  globally. They've got Verizon, AT&T locked
• 17:12
  up in the US for some period of time, right?
• 17:15
  I mean, eventually, let's say the, the, the competitor risk is
• 17:18
  that Amazon comes to market with something that's really good.
• 17:20
  And if either of those players decides that they, you know,
• 17:25
  Amazon is worth working with, then perhaps maybe Amazon can
• 17:29
  take one of those. But at least in the near term
• 17:32
  that that's not on the table. And of course it's for AST to
• 17:35
  lose. And then, you know, you've got
• 17:38
  the military business, right, which is, you know, the 10
• 17:43
  different use cases around electronic warfare, jamming,
• 17:49
  sensing, you know, communications, of course, and
• 17:53
  then you've got the first net business.
• 17:55
  And so there's a lot going for AST.
• 17:57
  And I think what this does for the, the market narrative is
• 18:04
  that, you know, I probably one of the biggest things I think
• 18:08
  for, for hedge funds and institutions was always going to
• 18:11
  be, you know, is this market big enough and is it economically
• 18:15
  attractive? I think the fact that you've
• 18:18
  got, you've got, you know, SpaceX that's coming to the
• 18:23
  market and then you've got Amazon thingy, it's big enough
• 18:26
  where they're going to go by global star.
• 18:29
  I I can't see a bigger validation of how large this
• 18:33
  market is and the potential of it, right.
• 18:36
  And so I think balancing the fact that that of course this
• 18:41
  does add some competitive uncertainty.
• 18:44
  It also raises the, the value of what AC is doing as an
• 18:49
  independent player, right? Because once global star, once a
• 18:53
  global star transaction closes and it's now obviously part of
• 18:56
  Amazon. Like does Google go to global
• 19:00
  star or does Meta go to global star and say, hey, I, I want to
• 19:04
  use your service? No, they don't.
• 19:07
  There's no way they're going to do that, right?
• 19:09
  Or are they going to go to Meta like is, is open or sorry, is
• 19:13
  open AI or Meta or Google or any number of other players going to
• 19:17
  go to SpaceX and say, Hey, I want to use your network.
• 19:20
  No. And so if anything, you know,
• 19:24
  this, this heightens the strategic value of the company
• 19:28
  and whether that's like these large tech players, you know, I
• 19:31
  didn't even talk about Microsoft, but whether it's
• 19:33
  these large tech players versus or it could be, you know, M and
• 19:39
  OS. I mean, what M and OS are going
• 19:40
  to go to Amazon and say, Hey, I want to work with you.
• 19:43
  And but you keep the, you control the customer
• 19:47
  information. I'll give it all to you.
• 19:50
  And by the way, like you're going to be competing with my,
• 19:52
  my fiber and 5G5G home business. That's not something, well,
• 19:59
  that's not the, the choice that AT&T and Verizon made when
• 20:04
  comparing AST to, to Starlink. And so I would assume that
• 20:10
  they're going to make that same decision when comparing AST to.
• 20:14
  Eventually what it will come to market for Amazon, which again
• 20:18
  is maybe 20282029. But yeah, no, it's, it's
• 20:23
  interesting. And I think if anything, this is
• 20:25
  going to get additional people interested in this market and
• 20:31
  bring more attention. And so, so now it's like, OK,
• 20:34
  well, now we've got Starlink and they're, you know, for those
• 20:38
  that missed it, I posted, let me just pull it up here.
• 20:42
  The information had an article, I assume that they got a, a look
• 20:45
  at the confidential S1 that will be public eventually, you know,
• 20:50
  breaking down Starlink's numbers.
• 20:53
  And so it was quite staggering. Starlink generated 11.4 billion
• 20:59
  of revenue in launch. SpaceX generated 4.1 billion of
• 21:03
  revenue. However, in terms of
• 21:04
  profitability, Starlink was 7.2 billion versus 700 million for
• 21:09
  SpaceX launch. And so the profits are here and
• 21:14
  Amazon clearly is voting with their feet saying well, we need
• 21:17
  to go pursue some of that profit high as well.
• 21:20
  Like fixed wireless is great, but in terms of the numbers and
• 21:24
  the growth, you know, it's all in directed device.
• 21:28
  And again, it's not just mobile phones, you've got to think more
• 21:32
  broadly. It's going to be drones, robots,
• 21:36
  vehicles, anything that you can put a, a, you know, a, a device
• 21:42
  on, right? And so tractors, I mean, there's
• 21:45
  a whole host of things like in terms of connected devices, IoT
• 21:50
  already is, is a, is a magnitude bigger than the mobile
• 21:54
  subscribers around the world, right?
• 21:56
  And that's just going to continue to increase.
• 21:58
  And so you've got to think outside of the box.
• 22:01
  It's not just mobile phones, it's going to be much broader
• 22:04
  than that, right. And so for, for Amazon, it makes
• 22:06
  a ton of sense because they're, they're not just in the business
• 22:10
  of, you know, selling wireless or eventually selling, you know,
• 22:15
  data to your home. They want to have all these
• 22:18
  different devices and enable to in order to integrate that and
• 22:22
  create their own network. It just makes a ton of sense.
• 22:26
  That said, there are some regulatory things that Amazon
• 22:29
  will have to get around. I think for their their the N 53
• 22:37
  that the 11 giga 11 megahertz of spectrum for private networks, I
• 22:43
  think you know they can use that terrestrially and it's it's part
• 22:46
  of their spectrum allocation. I mean it's either use it for
• 22:50
  MSS or use it for terrestrial use.
• 22:52
  There are power limitations to that.
• 22:54
  And so, you know, whether maybe there is a case where Amazon
• 22:58
  could sell routers to homes and then, you know, they can utilize
• 23:02
  this Amazon only spectrum and provide better service in your
• 23:06
  home. Like that's one potential
• 23:08
  synergy there. But but yeah, it's I don't know,
• 23:12
  there's a lot to unpack here. And so I I've got to think about
• 23:15
  it a bit more. But I think key takeaways that,
• 23:19
  you know, this is a this is a deal that makes sense for Amazon
• 23:23
  and, you know, for them not to be involved in this market, you
• 23:27
  know, that didn't that doesn't make much sense.
• 23:29
  And so it was something that was almost too good for them to pass
• 23:33
  out. And I think for for AST, this
• 23:35
  highlights the strategic value of the company.
• 23:37
  You know, it's spectrum assets, it's 50M and O partners around
• 23:41
  the world and of course, military and defense use cases.
• 23:45
  And then of course, Firstnet and you know, as the only
• 23:50
  independent player that left, you know, again, does that
• 23:53
  highlight that heightens the value to an A Meta or Google
• 23:57
  Open AI, Microsoft, you know, any number of companies, right?
• 24:02
  And this also validates the the directive device market, which
• 24:05
  is bigger than cell phones. It's going to be Internet of
• 24:08
  Things as well. But yeah, those are some of my
• 24:12
  initial thoughts. I'm going to look at comments
• 24:14
  here. Let me just look here.
• 24:18
  Some people may have asked some questions, but let me just look
• 24:24
  here. And by the way, like some of
• 24:25
  these carriers, these M and OS, they might decide to not work
• 24:29
  exclusively exclusively like they might actually engage with
• 24:33
  one or more providers to provide different pieces.
• 24:37
  Although I think network integration if you do that is
• 24:39
  going to be a nightmare, but that is always a possibility as
• 24:42
  well. Someone asked, did I hear a cat
• 24:46
  see in the background? Yes, you did.
• 24:48
  Actually, we have a cat. And so it was meowing that
• 24:51
  wasn't cat see. It's actually our cat here.
• 24:57
  Let's see. Satellite connectivity rewards
• 24:59
  capital and speed. SpaceX proved it.
• 25:00
  Amazon entering Titans to squeeze on smaller players like
• 25:03
  ASTS. That's true.
• 25:05
  It does add competitive juice to the landscape.
• 25:09
  And so AST is got to move quickly and which is why they
• 25:12
  raised $4 billion. And you know, they're working
• 25:17
  with key strategic players including AT&T, Verizon, Saudi
• 25:23
  Telecom, Vodafone, Google, Meta, I mean, you name it, right.
• 25:26
  So, so yes, that's true. Let's see comes back to
• 25:32
  executing, which means more satellites faster than orbit
• 25:34
  scaling revenue. I know helpful to bring more
• 25:37
  coverage to the industry. Yeah, I mean, for those that I,
• 25:41
  I guess actually I, I, I'll provide a little bit of an
• 25:43
  update. So as I've mentioned in spaces
• 25:46
  before, AST some of the delays around block 2 is around the
• 25:49
  stacking issue. And so these new composite
• 25:52
  rings, there's a lot of investment upfront that goes
• 25:55
  into them, and it's hard to do. But then once you do it, the
• 25:58
  weight savings and structural rigidity is worth it, right?
• 26:02
  And so ASD didn't counter some issues with their rings
• 26:05
  initially, but they solved that back in February.
• 26:07
  And the first batch is going to be done and shipped this month.
• 26:12
  And there was some speculation on Twitter about this Antonov
• 26:18
  flying into Midland yesterday. And I can confirm that.
• 26:23
  And Midland Space Board confirmed this, that that flight
• 26:27
  was for ASD Space Mobile. We do know that they use a, a
• 26:33
  manufacturer of composites in India.
• 26:35
  And so that's where the plane came from.
• 26:37
  And that flight actually dropped off the next generation or this,
• 26:41
  this improved ring design for a Bluebird 14 151617181920.
• 26:47
  I I think we're speculating anywhere between 6:00 to 8:00
• 26:49
  rings were dropped off yesterday.
• 26:51
  And so once the 1st 2 batches, which is 8/9/10 and 11/12/13 are
• 26:57
  done and out the door, the the other rings have been dropped
• 27:01
  off and we into being integrate will be integrated with their
• 27:05
  the set of microns and other pieces of of payload, which then
• 27:11
  of course will be, you know, tested and and delivered.
• 27:14
  So that will be the rings that were delivered yesterday will be
• 27:17
  batch will be batch, I guess 3-4 and four and maybe 5.
• 27:24
  We're not really sure how many rings were delivered, but there
• 27:26
  was there was more than we had expected.
• 27:30
  I'll just put it that, but let me see here.
• 27:35
  But yeah, that's, that's a quick update there.
• 27:39
  Oh, there's a few more questions.
• 27:46
  All right. One of people have questions,
• 27:51
  happy to to talk here. Let's see with your M and
• 27:54
  experience, have you seen companies like AST acquired on
• 27:56
  future revenue rather than current valuation?
• 27:58
  Yes, that's that's typical for M&A.
• 28:01
  You don't buy a company for its current prospects, you buy it
• 28:04
  for the future. Is AST even acquirable at the
• 28:07
  current stage do their high valuation with the current
• 28:10
  financials? Yeah, it is, it is acquirable,
• 28:13
  but I don't I don't think the company is selling right like a
• 28:18
  Bell is the controlling shareholder and he sees value in
• 28:22
  seeing this further in terms of development.
• 28:26
  And so I don't think he's an early seller.
• 28:29
  It for I guess for this question of whether companies at the
• 28:34
  state in the early stage, but high opportunity would they be
• 28:36
  acquired. I mean, just look at biotech,
• 28:38
  right? Biotech, you've got companies
• 28:41
  that have gone through phase two or phase three trials, not even
• 28:44
  2 revenue and they get acquired for billions of dollars just
• 28:46
  given on the potential. And you also see that in tech as
• 28:49
  well. Let's see what are your thoughts
• 28:54
  on timing of this while our satellite is literally sitting
• 28:55
  on top of their rocket on launchpad.
• 28:58
  I think the timing is it's coincidence.
• 29:01
  Blue Origin is separate from Amazon, although they are, they
• 29:05
  are of course, you know related. I don't think this the timing of
• 29:11
  this deal was on with with our launch, but if it was then that
• 29:17
  that's interesting and of itself.
• 29:20
  Let's see if Amazon entered this market in 2028 without adding
• 29:27
  any M and OS, what could they realistically do with what they
• 29:29
  bought today? Well, I mean, they can sell, you
• 29:33
  know, if someone from if someone buys an Apple iPhone or device
• 29:38
  and they're offered Amazon service, satellite service and
• 29:42
  they, they could pay some monthly subscription for that or
• 29:46
  Amazon, I guess like Amazon maybe kind of taking it forward,
• 29:51
  Amazon could offer it as a service via if you're a prime
• 29:56
  customer. But you know, you have to
• 29:59
  remember like that, that network is only available outside of an
• 30:03
  MN OS terrestrial coverage, right?
• 30:05
  And so I guess Amazon could provide some type of roaming
• 30:08
  network. So that's possible, but then I
• 30:12
  don't know if AT&T Horizon would be OK with, with enabling that.
• 30:18
  Although I guess Apple would be selling it, which is kind of an
• 30:21
  odd thing, right? Like Apple maybe, maybe it's
• 30:25
  branded by Apple, but they're just reselling Amazon, you know,
• 30:28
  service because I don't think that Apple would be comfortable
• 30:31
  selling, you know, they're they're a customer to Amazon.
• 30:36
  But yeah, this is like the complexity of it.
• 30:38
  All right, 'cause I think here you've got imperfect partners
• 30:42
  and then you've got Amazon and Apple.
• 30:43
  Like how do they, if any issues come up in the future, how do
• 30:49
  they resolve them? Which, and I believe there will
• 30:51
  be just give them that they are competitors.
• 30:54
  So does that, you know, what are Apple's rights?
• 30:57
  I got to look at the deal documents when they come out
• 30:59
  eventually. But what are Apple's rights and
• 31:02
  all this right? Like they do they still own 85%
• 31:05
  of the network or do they, do they relinquish some of that in
• 31:08
  exchange for some long term service agreement?
• 31:12
  And if so, what rights does Apple have if Amazon doesn't
• 31:16
  deliver? And by the way, I, I think I
• 31:19
  mentioned this before, but I think for let me just see where
• 31:22
  it's trading. I think this is a pretty
• 31:26
  negative for MDA space. I mean, MDA Space is trading it,
• 31:30
  I guess it's last trade at 3rd June 98, I think for, I mean,
• 31:34
  we'll see what Global Star says, but if Amazon is going to
• 31:38
  develop the next generation satellite, then Global Star, the
• 31:41
  Aurora satellite platform just lost one of its biggest
• 31:46
  customers, right, which is Global Star and they originally
• 31:49
  were trying to sell to Echostar. They lost that customer.
• 31:51
  So I don't know who's buying who will buy the Aurora satellite.
• 31:57
  I might even look at shorting some NBA today.
• 31:59
  But anyway, let's see why is AST been so silent on news lately?
• 32:05
  I think once we have a successful static fire of Blue
• 32:08
  Origin New Glenn 3, then I think you'll see AST send out an
• 32:13
  e-mail and post about when the launch is going to be.
• 32:16
  But I think smartly it would be. It'll be foolish to, you know,
• 32:20
  send say we're, we're launching on April 17th and we've seen how
• 32:24
  many days this thing has been pushed back due to, you know,
• 32:27
  some delays on the Blue Origin side.
• 32:29
  But it would be silly to send out invites and, and get people
• 32:34
  all jazzed up about a launch date and then the static fire,
• 32:37
  you know, maybe, maybe it's unsuccessful or they've got to
• 32:40
  do it again some other time. You just wouldn't waste, you
• 32:44
  know, people's time and efforts until you're absolutely sure
• 32:48
  that the static fire went off without a hitch.
• 32:50
  And by the way, like the, the, the, the FM FM 2 Bluebird 7
• 32:56
  payload is on top of the rocket. It's not a dummy payload.
• 32:59
  And so the reason why they're doing that is they're looking to
• 33:01
  have a quick turn around time. Obviously they're doing static
• 33:03
  fire today and then they're going to launch the sucker in
• 33:07
  three days. And so you, you wait, you wait
• 33:10
  for stack fire to be successful before announcing that you're
• 33:14
  going to have a launch date. Let's see, do you think this
• 33:20
  leads to an arms race to acquire AST among the remaining MAG 7 in
• 33:22
  the coming quarters? I think it certainly raises
• 33:25
  strategic conversations and you know, if the Bell's initial
• 33:30
  conversations with players to work in partnership, I'm sure
• 33:33
  you know, there might be phones ringing.
• 33:35
  The bankers might be getting calls in the next few few
• 33:37
  quarter weeks quarters about working together, either, you
• 33:41
  know, strugic investment or potential acquisition.
• 33:44
  But again, I I don't think a Bell's a seller.
• 33:48
  Let's see live for travel AST going to be crushed.
• 33:51
  No, it's not and if anything, as I said before, this validates
• 33:55
  the market, increases strategic importance of AST 'cause I, I
• 34:01
  think it's important like M and OS when they see this deal get
• 34:04
  announced, they're not, they're not like excited about it.
• 34:07
  They're not, you know, getting off their seat saying this is
• 34:09
  wonderful. They're they're probably very
• 34:11
  worried, right, because now Amazon is coming into the market
• 34:16
  and you know, Apple eventually is going to have a better
• 34:21
  service. And so that's going to give, you
• 34:24
  know, them pause. And that's, that increases the
• 34:28
  importance of AST being successful, right and working
• 34:31
  with them. So, and again, I, I did mention
• 34:35
  the, the value of the spectrum that AST holds, which is legato.
• 34:39
  If there was any doubts about it previously, this just
• 34:43
  underscores that value, right? And, and we've seen
• 34:46
  interestingly, Biasat, who you know, Legato owns, owns the
• 34:51
  spectrum with, with or leases the spectrum from ViaSat.
• 34:54
  And ViaSat has been doing everything legally possible to
• 34:57
  try to rescind the deal. And if you've been slapped down
• 35:00
  by the courts, they clearly know that Legato has tremendous value
• 35:06
  and they've been trying to unwind that deal, which
• 35:08
  obviously they can't. Let's see, is Amazon now a space
• 35:13
  play? It is to a degree.
• 35:15
  Amazon, of course has Leo and then they're going to try to
• 35:18
  enter into this market as well. But when you buy Amazon, it's a
• 35:22
  massive conglomerate, right? You've got obviously e-commerce
• 35:27
  side, you've got production and video content and you've got
• 35:32
  AWS. And so space is a small part of
• 35:34
  it, but it will become an increasing part of it.
• 35:36
  And so if that's something that you're interested in owning A
• 35:39
  conglomerate, then Amazon is is partially a space play.
• 35:45
  Let's see, 2030 is when Amazon will have something.
• 35:49
  If you look at the timelines of Amazon executing around Leo,
• 35:53
  yeah, I wouldn't be surprised if it's if it takes them additional
• 35:57
  years. I mean, doing this stuff
• 35:58
  obviously is not easy, but they've got smart engineers.
• 36:01
  Although based off of Space Mob due diligence and some of the
• 36:04
  articles you can read out there, it looks like they're having
• 36:07
  issues with their current Leo satellites.
• 36:09
  And perhaps this, this current generation will need to be
• 36:13
  retired and a new generation put up.
• 36:16
  But of course, they, they, they need to put up satellites,
• 36:18
  right? Because they've got to meet
• 36:20
  deployment deadlines set by the FCC, otherwise they lose their,
• 36:26
  their license for the consolation.
• 36:28
  And so they've got to balance that all out.
• 36:31
  Let's see. Anyway, those are the comments I
• 36:36
  had. But yeah, or those are the
• 36:38
  comments that I'm responding to. But but yeah, thanks for
• 36:40
  joining. I think, yeah, this is a
• 36:43
  interesting transaction. I think it's going to bring more
• 36:47
  interest and attention to the sector, especially if anything,
• 36:50
  I think the companies wanted to announce this deal before SpaceX
• 36:53
  goes public. And so, yeah, space as a sector
• 36:57
  is growing up, right. And the the amount, the
• 37:00
  potential and the amount of institutional dollars that are
• 37:04
  going to be coming in the sector, I think it's going to be
• 37:06
  great. And this deal just highlights
• 37:08
  the value of the direct advice market and the value of
• 37:11
  spectrum, which ASD has both. So anyway, thanks for joining.
• 37:17
  And you know, as as this transaction moves along and I do
• 37:21
  more research, I'll, I'll probably do another Fallout
• 37:23
  space. But in the meantime, hope
• 37:25
  everyone's doing well. Looking forward to, oh, I think
• 37:28
  the static fire for Blue Origin. I don't know how true this is,
• 37:31
  but someone in the NASA flight chat said that it's going to
• 37:35
  happen at 9:20. And so yeah, that I did post a
• 37:39
  link about it so you can watch on a YouTube.
• 37:42
  We're going to see Blue Origin, New Glen Fire.
• 37:45
  I guess it's in 15 minutes. So exciting times.
• 37:48
  And then I don't think I'll be able to make the the the launch
• 37:53
  this Friday. I was looking, I was trying to
• 37:56
  make it. However, I got sick and so I'm
• 37:59
  taking some antibiotics. So I don't want to get other
• 38:01
  people sick. So I'll have to watch from home.
• 38:03
  But but yeah, looking forward to it.
• 38:06
  Anyway, thanks for joining and we'll talk again soon.
• 38:09
  Take everyone. Thanks for listening to the AST
• 38:12
  Space Mobile podcast. If you enjoyed this episode and
• 38:16
  you'd like to help support the podcast, please share it with
• 38:19
  others, post about it on social media, or leave a rating and
• 38:22
  review. To catch all the latest news
• 38:24
  about AST Space Mobile, make sure to subscribe.
• 38:28
  Thanks again and I'll see you next time.
• 38:34
  We're doing something very, very big, and I think with this
• 38:36
  technology we can really affect billion lives.
• 38:39
  AFT Space Mobile is the only company that has full technology
• 38:44
  to deliver several of robot connectivity directly from the
• 38:47
  state to the everyday smartphone.
• 38:50
  People will just basically turn their phone and be Syndex
• 38:53
  regardless of where you are. We don't want the user even to
• 38:56
  know that it's connected by satellite.
• 38:59
  Our role is to bring this into reality, always in partnership
• 39:03
  with the MMO.