By Hope King
Entrepreneurs have chased satellite internet dreams for decades with little success.
Abel Avellan, Chairman and Chief Executive Officer of AST SpaceMobile, is confident that this time will be different.
“The problem for some of those attempts is if you need a special terminal — an antenna, special device, special phone — then that advantage gets diminished because now you have friction,” he told IPO Edge during Tuesday’s Space Race event online.
AST’s solution would work without requiring people to download any apps, change their existing phone settings, or get a new device.
“Anywhere on the planet where there’s no connectivity, they will get a text message,” Avellan explained. “That message will ask if they want to be connected to SpaceMobile because [they] don’t have regular connectivity. You say yes, and then you become a subscriber.”
Consumer and investor interest for space-based connectivity have reemerged following SpaceX’s Starlink business.
Since its initial plans were announced in 2015, Starlink has sent more than 1,000 satellites into space, with plans to have more than 4,400 above earth by 2024.
The Federal Communications Commission in 2018 approved SpaceX to send close to 12,000 satellites in total.
In contrast, AST says it plans to have 168 total satellites by the end of 2024 in order to enable “full global mobile coverage.” The company has also requested the FCC to have a network of up to 243 satellites for 5G support.
“Our satellites are large,” said Avellan. “The satellites that we’re launching this year are one-and-a-half-ton — it’s the size of a pickup truck.”
A larger satellite is required for AST’s solution because the satellite is not an orbiting base-station, but a radio repeater that acts as a relay between phones and existing antennas on earth.
“You need power to connect to these things,” he said as he picked up an iPhone for demonstration. “That’s the difference.”
And because AST’s model depends on existing cellular infrastructure, it ultimately lowers the company’s costs for operations.
“One of the big advantages that we have with our technology and with our architecture [is that] this is a cellular-based system,” he said. “We’re not reinventing the wheel with how operators operate cellular networks. We use the old mobility system that they use … taking the core infrastructure that they use, piggybacking on the trillions of dollars that they invested and basically applying it to space.”
The online giant Rakuten in Japan, which has plans to launch its own mobile network, and telecom giant Vodafone are both investors in AST.
AST is currently building and testing a satellite, BlueWalker 3, in Midland, Texas, with plans to launch it in the second half of 2021.
The company is also planning to go public on the NASDAQ through a reverse merger with SPAC company New Providence Acquisition Corp. The combined company is expected to have an enterprise value of $1.4 billion and a $1.8 billion equity value.
On why a SPAC made sense for AST, and why the company did not investigate a traditional IPO route, Avellan said it was about timing, regulatory conditions, government support, and financial availability.
“The timing was right to get to market,” he said. “We had a lot of good momentum … coinciding with the perfect timing of where we are in our technology development.”
“We’ll be able to get to revenue, cash flow positive with this transaction,” he added, because it will enable AST to build and launch its first 20 satellites.
Avellan was one of several panelists during Tuesday’s event, which also featured:
- Wayne Monteith, Associate Administrator, FAA Office of Commercial Space Transportation
- Tom Markusic, CEO, Firefly Aerospace
- Andrew Rush, President and COO, Redwire
- Phil Denning, Partner, ICR
- Chris Quilty, Founder and CEO, Quilty Analytics
- Karen Snow, Head of U.S. East Coast Listings & Capital Markets, Nasdaq
- Scott Wisniewski, Managing Director, Technology, Media & Telecom Group, Barclays
Watch a full replay here.