AST SpaceMobile and the Delay Game
Telecom is a business many investors stay away from, and the reason is obvious. Look at $Verizon(VZ)$ and $AT&T Inc(T)$ ’s return on the billions in assets they invest each year.
And that’s translated to stocks that have gone nowhere for a decade.
But investors thin $AST SpaceMobile, Inc.(ASTS)$ will be different. Satellites can serve the entire world, increasing the addressable market far larger than what traditional telecoms can reach.
Great story.
What’s the reality?
The first five satellites went into orbit about a year ago. Very little revenue has been generated since, and tests have only recently begun with carriers like AT&T. But the story was still intact.
On August 11, it was all systems go with 45 to 60 satellites expected by the end of next year.
We currently anticipate at least five orbital launches by end of Q1 2026, with orbital launches occurring every one to two months on average to reach our goal of 45 to 60 satellites launches during 2025 and 2026, which will drive continuous coverage in key markets such as United States, Europe, Japan, U.S. and other strategic markets like the U. S. Government.
Regarding our orbital launch campaign, FM1, our first next generation Block 2 BlueBird satellite will be ready to ship in August. We're working with our launch provider on determining the earliest possible launch date.
AST SpaceMobile Q2 2025 conference call on August 11, 2025
Less than two weeks later, we learned the launch of FM1 would be delayed until probably 2026.
Bluebird satellites, which will be the 45 to 60 satellites to build the first constellation, are being completed, and launches are expected soon.
But again, even small delays impact the payoff timeline and allow competitors space to move in.
This week, we learned SpaceX bought spectrum from EchoStar for $17 billion and will offer direct-to-cell service with the ability to do video calls within 2 years.
SpaceX has entered into a purchase agreement with EchoStar for 50 MHz of exclusive S-band spectrum in the US as well as global Mobile Satellite Service (MSS) spectrum licenses. This agreement will enable us to develop and deploy our next generation Starlink Direct to Cell constellation which will be capable of providing broadband service to cell phones globally.
In January 2024, SpaceX began deploying Starlink satellites with Direct to Cell capabilities to eliminate mobile dead zones. At the time, more than 20 percent of the land area across the United States and 90 percent of the Earth remained uncovered by terrestrial service.
Days after launching the first Direct to Cell satellites in 2024, the Starlink team was texting using unmodified cell phones on the ground. By spring, we were demonstrating video calling capabilities. A year and half later, and with more than 600 Starlink Direct to Cell satellites in orbit, the first-generation Direct to Cell constellation was successfully deployed and is operational across five continents. Today, Starlink Direct to Cell has become the largest 4G coverage provider on planet Earth, connecting over six million users and counting.
SpaceX
AST SpaceMobile will spend millions launching satellites over the next year, and then what?
Will people want to use the service?
Will they pay extra for a satellite connection from AT&T or Verizon, which have revenue share deals with AST SpaceMobile?
We don’t know what the economics look like, but AST SpaceMobile is already experiencing delays and has a competitor that’s out-executing it.
Is this another Plug Power-type negative ROI business with lots of hype and no profits?
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Verizon’s adjusted return in the last 10 years was about 61% and AT&T’s was 104%.
Telecom should NOT be a business many investors stay away. We use telecom services all the time on a daily basis, and it’s a service you would not even consider cutting in moments of crisis. Just like power/energy, banking and utilities.
Big companies like Verizon and AT&T generate so much money, and should they see high returns in satellite they will definitely invest heavily on it via either acquisitions (most likely) or R&D.
ASTS reported an accumulated net income LOSS of $438 Million in the last 4 years.
On the other hand, Verizon’s 4 year accumulated net income was $72 Billion. AT&T was $36 Billion.
ASTS book value is $700 Million, and VZ’s net income in 2Q25 was $5 Billion. They could buy seven ASTS in one quarter