Advanced Television

AT&T firmly backs AST SpaceMobile

June 27, 2024

US telco giant AT&T is already a financial backer of AST SpaceMobile (and has guaranteed a $20 million revenue commitment). AST plans on circling the globe with its ‘direct-to-cellular’ satellite service. Unconfirmed reports suggest that AT&T expects some 30-40 per cent of its US clients to take a low-cost add-on service for connection to AST when in out-of-service terrestrial cellular range.
Reportedly it is suggested AT&T that it will charge about $2 per month for this add-on service to between 60 and 90 million consumers. If correct, these are impressive numbers and  if the forecast proves accurate this could deliver around $1.4-$2.1 billion a year to AST.
AST SpaceMobile has Memoranda of Understandings with more than 40 telcos around the world. As well as AT&T, both Google and Vodafone have made major commitments, while Verizon at the end of May said it will invest $100 million in AST.
One observer suggests that it is likely that Vodafone and Verizon could have similar market take-up. “Why would Verizon/Vodafone customers be different [to AT&T]? They won’t. So, assume 1 billion MNO customers sign up AST @ just $2 = $12 billion per year to AST,” says Acromas.
The clear advantages for AST are many. They don’t have to create billing relationships for millions of clients: the telcos will handle that. They don’t have much to do in terms of marketing. The telcos will handle the service promotion. They don’t need hundreds or thousands of retail shops on the ground.
And a report from Deutsche Bank (DB) seems to confirm the financials. DB estimates that ARPU for AST will be $1.63 per month for this year, growing to $2.03 for 2025 and increasing modestly to $2.10 by 2030.
It is these forecasts which helped the bank suggest share price values growing to $22 per share next year, but exploding to $121 in 2026 and a mind-blowing $672 by 2027.

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