AST SpaceMobile: Long-term access to up to 45 MHz spectrum secured

AST SpaceMobile (NASDAQ: ASTS, WKN: A3CL8W) has taken an important step forward by securing long-term access to spectrum in the premium spectrum up to 45 MHz. This will enable the company to offer direct-to-device satellite applications to its customers in the United States and Canada in the lower end of the mid-band spectrum.

AST SpaceMobile is currently the only provider working on offering both military and civilian customers the option of sending data from everyday smartphones to other cell phones as receivers via satellite. This enables both telephone calls and the transmission of large data packets.

When fully expanded, data transmission will be possible at a speed of up to 120 Mbit/s, so that video calls via satellite will also be possible in areas that previously had to struggle with dead spots or that are not yet connected to the mobile network due to their remote location.

The agreement with Ligado Networks will link AST SpaceMobile’s communications satellites to the planned nationwide low-frequency network and connect them into a high-quality spectrum covering the entire United States of America, and once implemented, the agreement will provide AST SpaceMobile customers with superior penetration and coverage capabilities, the company said.

Ligado Networks has been cooperating with AST SpaceMobile for a long time

“Adding access to premium lower mid-band spectrum in the United States to the AST SpaceMobile network gives us long-term access to a large block of a scarce resource, significantly enhancing our planned space-based cellular broadband offering,” said Abel Avellan, Chairman and CEO of AST SpaceMobile. “In addition to our previously announced plans for a nationwide 850 MHz network, access to the largest available block of high-quality nationwide spectrum will enable us to achieve our goal of data speeds of up to 120 Mbps, working with our mobile operator partners to deliver a true broadband experience directly from space to everyday smartphones.”

In this context, long-term really means long-term, as the useful life covers a period of 80 years. Of course, such an agreement is only entered into by a partner who is 100 percent convinced of AST SpaceMobile. This is Ligado Networks, as the company is already involved in AST SpaceMobile through the financing rounds carried out in the past. The costs for the use of the frequencies provided by Ligado will therefore be paid in the form of convertible bonds.

For AST SpaceMobile, this approach has the advantage that the current debt will be converted into equity sooner or later, which is much more cost-effective than a traditional loan agreement. The final conclusion of the agreement still requires documentation, which is expected to be completed in the first half of 2025. Subsequently, Ligado will receive approximately 4.7 million penny warrants, which can be converted into AST SpaceMobile Class A shares, and a cash payment of approximately USD 550 million. For the use of the frequencies, AST SpaceMobile will make an annual payment of approximately USD 80 million and grant Ligado additional participation in the net revenues.

Last fall, AST SpaceMobile launched five satellites into space and successfully deployed them. This laid an important technical foundation for the planned mobile calls via satellite. The deal now concluded for the use of the necessary frequencies closes another gap on the way to the successful implementation of its own business idea. AST SpaceMobile is thus adding one stone to another and ensuring that mobile phone calls made via satellite will soon become an everyday affair.