Advanced Television

Can AST Space Mobile crack DTC?

May 28, 2024

AST Space Mobile has just one satellite currently in orbit which itself something of a test prototype for a planned global satellite-based ‘direct-to-cellular’ service. AST’s follow-up BlueWalker 3 satellites are expected to be ready for launch in batches of five craft starting in July or August (according to the company) and continuing in batches throughout 2024 and 2025.

AST is forecasting that, over time, it will be connecting a fair proportion of a target global audience of 2 billion smartphone owners.

Some observers are sceptical of that target, but recent reports from investment banks Morgan Stanley and Deutsche Bank talk – perhaps optimistically – of tens of millions of users and spectacular share price value of $100 (per share) by 2026. Deutsche Bank currently gives AST a share price target of $22 (up from $19) and significantly ahead of AST’s current trading.

This forecast is helped by existing shareholder AT&T which has confirmed its commitment to AST. This itself has prompted a significant amount of fresh shareholder interest in AST which has propelled its share price from barely $2 a share to a 112 per cent growth over the past month to $4.74 on May 24th.

AT&T’s CEO John Stankey talked on Bloomberg about how “excited” he was about AST. Stankey explained that cellular handset phone sales were slowing despite spectrum demand growing some 30 per cent a year. Stankey said that it had clear ideas about the size of the potential market and who wanted ‘always on’ and always available network access. “We think there’s good applications and demand, and we want our customers to be connected everywhere they might be,” he noted.

Key to AST’s appeal, says Stankey, was that the service from AST would be seamless as far as the consumer was concerned. Stankey explained: “I think customers don’t want to drive off a network, and they want to be able to have a relationship to say that when I’m out on that interstate highway on my trip, that I can be confident if something is going on at home, that I’m going to know about it. And if I’m on that unique vacation where I’m in some place that typically is a bit off the grid, that I’m confident I’m going to be able to at least get the kind of communications done with my work and my office in a way that I feel like I’m not entirely disconnected, or more importantly, post that very, very special picture that sums the day of my experiences up and feel like I can continue to push my brand forward.”

But AST is not alone. Starlink, for example, is working hard on its own Direct-to-Cellular service and has tested connectivity at various spots around the planet.

There are others, not least Apple which is working with Globalstar and is currently offering a DTC emergency service on some of its phones.

The question now is whether Starlink, Apple, Amazon’s Project Kuiper, or the other would-be DTC suppliers can win global audiences for Direct-To-Consumer telephony. Can fortunes be made, which AST is anticipating, or bankruptcy ensue?

Categories: Blogs, Inside Satellite, Mobile, Satellite

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