AT&T’s CEO John Stankey has praised AST SpaceMobile in an interview on CNBC, saying: “Satellite constellations are going to be great. People are going to have always on connectivity, there will be no more [dead spaces] and this is why we are doing what we are doing with AST which will make sure that your device can be connected no matter where you are.”

Stankey’s comments came just ahead of AST’s 5-craft launch on rival SpaceX’s Falcon 9 rocket 0n September 12th. AT&T is a major investor in AST.

Stankey’s support matched that of Scotiabank which, on September 9th, had further explained its rationale for raising its share price target on AST stock to $45.90. One aspect of the bank’s review was that AST could find itself a M&A target.

“Hence, on top [the launch] giving it a pioneering advantage, this could make ASTS an M&A target, not only for SpaceX, but for any investor understanding the relevance that Supplemental Coverage from Space will have on the future of the global wireless industry. We don’t believe the current share price reflects an M&A premium. Buy, $45.90 target,” said the bank.

But the bank’s report was negative on SpaceX’s Starlink’s prospects in Direct-to-cellular (D2C) activity. It stated that Starlink, itself in numerous battles with the FCC over spectrum and transmission rights, is likely to be denied permission for a ‘waiver’ which would allow it to start D2C transmissions. If the FCC denies Starlink’s requests then the satellite operator risks a number of its satellites becoming ‘zombie’ satellites. Scotiabank suggests one option for the FCC would be to limit the number of Starlink D2C craft that could operate (and thus not exceed transmission interference limits).

“But SpaceX, in our view, faces tough choices,” added the bank. “[It could] redesign its satellites but at the risk of falling under patent-enforcement action from AST.”

The bank adds that SpaceX could wait until 2027 for the World Radiocommunications Conference to – perhaps – modify the rules on transmission limits, or Starlink could buy or acquire more frequencies, or even buy AST. Consequently, the bank says that AST must be a M&A target, and issued its ‘BUY’ recommendation along with a ‘sector outperform’ rating.

Starlink has more than 130 D2C satellites in orbit.

The five AST BlueBird Block 1 satellites are due for launch on September 12th at 04.52 EDT (08.52am UTC).

A report from Juniper Research anticipates that the first year of commercial direct-to-cell services will be 2025; generating a modest $30 million in revenue globally. But thereafter revenues could be extremely valuable.

Other posts by Chris Forrester:

1. Starlink tests D2C in Romania, US, Japan
2. European telcos unite against Starlink D2C
3. Rivada insists “deadlines will be met”
4. Ergen will gain “greatest opportunity” by losing DISH
5. Rivada’s latest problems could be fatal
6. SES confirms 25c dividend
7. Intelsat gets licence to rescue Galaxy 25
8. Bank downgrades Virgin Galactic
9. EchoStar fails to find extra cash

Categories: Blogs, Inside Satellite, Satellite

Tags: AST SpaceMobile, AT&T