AST SpaceMobile: Satellite messaging isn't cool – but satellite broadband is

In the 2010 movie The Social Network, written by Aaron Sorkin, Justin Timberlake's character Sean Parker utters perhaps the movie's most memorable quote: "A million dollars isn't cool. You know what's cool? A billion dollars."

In the film, the line lays the groundwork for Mark Zuckerberg's founding of Facebook (now Meta), a company with a market capitalization today of almost $2 trillion.

The quote certainly could reflect Scott Wisniewski's view of the direct-to-device (D2D) market. Wisniewski is the president of AST SpaceMobile, the company that AT&T, Verizon and Vodafone are all counting on to catapult them past SpaceX and Apple – two companies that today offer space-based text messaging services, but not data.

"I think it's important that the connectivity be more than text. I think text may be a good way to sell more phones, but in terms of providing value to the consumer, and then capturing the value in the form of ARPU [average revenues per user], it's very important to be delivering real value to them and selling broadband when your phone doesn't otherwise work," Wisniewski told Light Reading on the sidelines of the MWC Barcelona trade show. "Not just in life-or-death situations, but just in how you interact with your phone."

Wisniewski added: "From the beginning we've gone with the big satellite and the thought that broadband wins. ... That's the unlock for the consumer mass market."

Racing to launch

AST SpaceMobile is an alternative to SpaceX's Starlink "direct to cell" service. Like SpaceX, AST SpaceMobile promises to use mobile network operators' existing spectrum holdings to deliver satellite connections to existing, unmodified cellular phones.

It plans to do so through massive satellites: Each of AST SpaceMobile's new satellites cover 2,400 square feet (much larger than the 269 square feet of SpaceX's second-generation satellites). AST SpaceMobile hopes to launch a total of 45 to 60 of them throughout 2025 and 2026 in order to offer continuous broadband cellular services from space. The larger satellites are a big part of why AST SpaceMobile is promising to provide faster data speeds than existing D2D messaging options.

Of course, there could be hiccups along the way.

AST SpaceMobile so far has raised a total of $2 billion to fund its aspirations, cash that ought to carry it through to next year. But the company will likely need to raise more money to reach its full goal of 60 satellites in space by the end of 2026.

As for commercial services, AST SpaceMobile is promising an initial, closed beta effort "soon" with AT&T and Verizon in the US. It then may be able to offer intermittent services starting later this year – meaning, customers' connections will come and go as AST SpaceMobile satellites pass overhead. Gaps in service coverage may well be measured in hours rather than minutes.

But Wisniewski said that should change by the end of next year, when AST SpaceMobile hopes to have between 45 and 60 total satellites in orbit. That's when the company hopes to begin providing commercial, continuous, global coverage for its network operator partners, including AT&T, Verizon and Vodafone.

T-Mobile, meanwhile, promises commercial satellite messaging in July via SpaceX's 515 satellites. 

AST SpaceMobile's business model calls for a 50/50 share of its partners' resulting revenues. SpaceX hasn't disclosed its exact business model. 

A question of performance

If AST SpaceMobile is able to fund the completion of its satellite constellation, what kinds of speeds can users expect?

Wisniewski said that with a 5MHz chunk of spectrum from AT&T or Verizon, the company will be able to provide speeds from each of its satellites totaling 20 Mbit/s. In order to show off how such speeds compare with Apple's and SpaceX's text offerings, AT&T, Verizon and Vodafone executives have been conducting video calls using AST SpaceMobile's five satellites currently in orbit.

But, again, the devil is in the details. Each of AST SpaceMobile's satellites can provide a maximum total of 20 Mbit/s to all the users they cover at any given time in a given cell (each satellite can support up to 2800 cells simultaneously). So, as that single satellite passes over a city, everyone using the service in a cell will have to share a total of 20 Mbit/s. If there are lots of concurrent users, that means each one will get a much slower speed.

This situation makes calculating real-world speeds difficult, given that the number of users in any one location may be constantly changing as AST SpaceMobiles's satellites zoom around Earth.

"It is unclear what speeds they will achieve in real-world deployments. This is because the spectrum must be re-used between multiple cells, and many end users will need to share a limited capacity across several hundred square miles," wrote analysts Tim Farrar and J. Armand Musey in a recent report (PDF). Farrar (of TMF Associates) and Musey (of Summit Ridge Group) are well-known experts in satellite and terrestrial spectrum, respectively.

Of course, this situation will only impact locations outside of AT&T's and Verizon's terrestrial cellular coverage areas – meaning, rural areas. 

The Ligado angle

Further complicating all this is AST SpaceMobile's recent agreement to purchase 40MHz of L-band spectrum from Ligado Networks. That would make AST SpaceMobile similar to L-band spectrum owner Globalstar, Apple's satellite messaging vendor.

If AST SpaceMobile is successful in obtaining that extra spectrum, it has promised to be able to raise its speeds to a maximum of 120 Mbit/s (again, that's the speed provided by one satellite to whoever is on the ground).

But AST SpaceMobile doesn't anticipate being able to provide both lowband and midband spectrum on any one satellite. The company's lowband spectrum is the 800MHz it will be using from AT&T and Verizon, and its midband spectrum is the L-band holdings it expects to purchase from Ligado.

Could this mean that AST SpaceMobile would have to launch more satellites in order to put Ligado's spectrum into action?

Wisniewski said AST SpaceMobile ultimately hopes to operate a satellite constellation totaling around 100 satellites. The company might alternate between launching a lowband-capable satellite and a midband-capable satellite, he added. 

However, Wisniewski doesn't expect AST SpaceMobile's purchase of Ligado's spectrum to close until next year. That's partly because Ligado is in bankruptcy and must negotiate that process.

Eventually, AST SpaceMobile's customers will benefit from plenty of spectrum options, Wisniewski said. "When they're both in orbit the phone can use both of them," he said of AST SpaceMobile's lowband and midband options. 

'Scale economics'

Each of AST SpaceMobile's satellites will have the capacity to support 1 million users per month, with each subscribing to a service plan of 1GB per month, according to Wisniewski.

"So we have usable, sellable capacity of a million gigabyte packages per satellite," he said. "That's the scale economics that matter."

That kind of calculation is how mobile network operators view the network capacity they can profit from, Wisniewski said. However, it will be up to AST SpaceMobile's partners – such as AT&T and Verizon – to determine how they plan to sell phone-to-satellite connections to end users, he added.

T-Mobile recently set a high bar for satellite pricing: The company is offering services for $20 per month. And T-Mobile's satellite partner, SpaceX, has promised to offer data options next year, though details and performance characteristics haven't been publicly disclosed.

T-Mobile's satellite messaging pricing could buoy AST SpaceMobile by making AST SpaceMobile too important to fail. If AST SpaceMobile does not launch its satellites, that will leave AT&T and Verizon without a competitive response to T-Mobile and SpaceX.

Finally, it's worth noting that AT&T and Verizon aren't the only companies feeling heat from SpaceX. Analyst Frank Rayal of Xona Partners recently noted that SpaceX's Starlink Internet service is significantly cutting into legacy satellite Internet providers business.

"Viasat and Hughes have experienced notable declines in their subscriber bases. Viasat's subscriber count dropped from 596,000 at the end of December 2020 – just as Starlink launched – to 205,000 by the end of December 2024," Rayal explained. "This represents a loss of nearly two-thirds of its subscribers in just over four years."

Undoubtedly AT&T and Verizon are hoping to avoid a similar impact.

Article updated March 7 to clarify calculations around AST SpaceMobile's satellite cells, and the amount of money it has raised.