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AST SpaceMobile - feedback/comment on this bet?

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  • Apr 27th, 2023 8:44 am
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Jr. Member
Nov 29, 2022
169 posts
346 upvotes

AST SpaceMobile - feedback/comment on this bet?

I would like some feedback regarding a gambling move I'm about to take re: AST SpaceMobile (NYSE:ASTS). I'm very tempted to dump a small amount of play money outside my "safe" investments into ASTS. I'm hoping someone with an engineering/telecommunication background could help me out here to make sure it's not another Theranos. However all comments are welcome as it never hurts to have an extra pair of fresh eyes on things.

Background:
https://transhumanica.com/asts
https://seekingalpha.com/article/441791 ... binary-bet

TL; DR version:
  • Broadband internet to cellphone is currently transmitted either by ground towers (various telecom co.) or by satellite (Starlink)
  • ASTS is developing tech to deliver internet to regular smart phone using satellite. Unlike Iridium, they don’t need expensive satellite phone. Unlike Starlink they don’t need any satellite dish.
  • They are complementary - not competitive - with traditional cell phone providers. Rather than try and offer a stand-alone cell phone network, AST SpaceMobile will be offered as an upgrade to customers on existing networks from major providers including AT&T (T), Vodafone (VOD), Telefonica (TEF), Liberty Latin America (LILA), and many others.
  • They are offering internet access to places where building ground telecom towers are not economically viable. In theory the system could reach almost any surface in the world.
  • No guarantee the tech will work at scale; similarly no guarantee it will be commercially viable. However the tech look promising: AST launched a BlueWalker-1 satellite in April 2019 to test their technology, and proved it could establish a link directly to cellphones. (As a layperson I’m completely out of my elements here)
___
So, your thoughts on this lose it all or 20 ~ 100x return bet?
7 replies
Deal Guru
Aug 17, 2008
10990 posts
13540 upvotes
No opinion about ASTS, but it seems like GSAT is doing something similar.

1 - You should read the prospectus filed by GSAT last year. Their funding was by a behemoth. Search under my posts for other details.
2 - T-Mobile has partnered with someone else to do something similar.

https://stockcharts.com/h-sc/ui?s=ASTS& ... &cmd=print

or https://schrts.co/FvatPwGp

GL
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
Deal Addict
User avatar
Mar 27, 2007
2721 posts
705 upvotes
I looked at it briefly, never really got to the point where it was on my buy list. There are some serious believers, some of whom I respect (ie https://twitter.com/spacanpanman)

But I decided against it.

My thoughts:
* Don't focus on the tech. It's unproven, you don't understand it, and ultimately not only factor that will make the company successful.
* Does the business model work? Other companies are giving away satellite connectivity for free (T Mobile). Yes, less speed and less fancy. But they are literally giving it away. And SpaceX has the launch advantage (cost) and starlink 2.0 will come out soon.) SpaceX is not a company I want to compete with.
* Best tech doesn't always win out.
* Is it a feature, or a business.
* Can't compete with cost of ground based towers, ultimately TAM will be limited.
* What's the use case? Not urban or suburban (ground based networks cheaper and better). So who will ultimately pay the premium?
* Very speculative
* LEO satellites will need constant replacement (physics of how they work)
* Satellites have a long lag to upgrade, vs ground based network
* 5G network requires many more towers, vs 4G. Can't see ASTS getting scale and speed without a VERY extensive and expensive network.


Business might be ok in the long run, but it is not 'investable' for me. As I don't see exponential growth or massive margins.

Easier for a company like SpaceX to simply adopt 80% of the ASTS tech, and add it to StarLink 2.0, than it is for ASTS to launch satellites.
Jr. Member
Nov 29, 2022
169 posts
346 upvotes
MrMom wrote: 1 - You should read the prospectus filed by GSAT last year. Their funding was by a behemoth. Search under my posts for other details.
2 - T-Mobile has partnered with someone else to do something similar.

https://stockcharts.com/h-sc/ui?s=ASTS& ... &cmd=print

or https://schrts.co/FvatPwGp

GL
Thanks MrMom

Before commenting on 1, I must say upfront a few things that I will not repeat hereafter:
This is an honest stab at something by a layman; as a result, I could be wrong and unintentionally spread misinformation. Please feel free to correct me.
ASTS is not an investment; it’s a gambling bet. My prefer definition of investment is from Benjamin Graham:
“An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative.”
I’m not here to pump ASTS. I’m excited for it and the reason for this discussion is to seek better understanding in it before making this bet. All comments, especially criticism and/or of technical nature, are welcome.

https://investors.globalstar.com/static ... a0a8216f3e
https://www.globalstar.com/Globalstar/m ... ership.pdf
I read GSAT's 2022 annual report and Nov 2022 NYC Investor Day pdf. They operate ground gateway stations and satellites to offer two-way communication. You need to buy their hardware (transmitter/motion sensors/GPS/data module) in order to access their network.

Majority of their business are:
  • Tracking of asset and personnel (field asset such as vehicles and unattended equipment for oil and gas field, farming equipment and animals, fleet management including geofencing, cargo containers, rail cars)
  • Monitor (remote monitoring of fluid & tank level, pipeline flowrate/temp, utility meters, security, engine run time, fuel level)
___
Quote from their annual report:
The specialized needs of our global customers span many industries. As of December 31, 2021, we had approximately 768,000 subscribers worldwide, principally within the following markets: recreation and personal; government; public safety and disaster relief; oil and gas; maritime and fishing; natural resources, mining and forestry; construction; utilities; animal tracking; and transportation. Our system is able to offer our customers cost-effective communications solutions completely independent of cellular coverage. Although traditional users of wireless telephony and broadband data services have access to these services in developed locations, our customers often operate, travel or live in remote regions or regions with underdeveloped telecommunications infrastructure where these services are not readily available or are not provided on a reliable basis.

Our top revenue-generating markets in the United States and Canada are government (including federal, state and local agencies), public safety and disaster relief, oil and gas, recreation and personal telecommunications. In recent years, the portion of our customers using Commercial IoT devices has increased significantly. No one customer was responsible for more than 10% of our revenue in 2021, 2020 or 2019.
____
  • They offer two-way voice communication and data transmissions (“Duplex”) – 28% of total revenue (27% service + 1% equipment).
  • They compete in the MSS (Multimedia Messaging Service) sector of the global communications industry – 17% of total revenue (13% service + 4% equipment). Their Commercial IoT (internet of things) offerings are low data (in the KB range), low power applications in situations where existing terrestrial wireline (land telecom lines) and wireless communications networks (cell towers) are impaired or do not exist. Their largest global competitors here are ORBCOMM, Inmarsat and Iridium.
  • Their SPOT line target recreational and commercial markets that require personal tracking, emergency location and messaging services off grid - 43% of total revenue (36% service + 7% equipment). They deliver satellite-based connectivity and real-time GPS tracking to hundreds of thousands of users, completely independent of cellular coverage. The product enables users to transmit predefined messages to a specific preprogrammed email address, phone or data device, including requests for assistance and “SOS” messages in the event of an emergency.
____
https://www.fiercewireless.com/wireless ... phone-deal
The Globalstar and Apple deal is basically Apple integrating Globalstar’s SPOT services into their iPhone 14. iPhone 14 users will now have emergency SOS via satellite when going off grid. Keep in mind this isn’t internet service on your smart phones, allow me to quote Transhumanica ASTS report:
The Iridium GO! data speed is 2.4 Kbps (yes, you read that right), usable for text messaging, emails, weather forecasts, and other minimal-bandwidth applications. This is the same data speed as all other Iridium & Inmarsat Satellite phone services.

For comparison, MP3 music is typically encoded at 192 Kbps, and low quality 480p YouTube video consumes 500 to 2000 Kbps, 200 to 800 times more than is possible to achieve with Iridium network
… SpaceMobile can also provide more than 35 Mbps download speeds, enough to watch 4k Ultra HD YouTube on your existing phone in the middle of nowhere.
So to recap – Apple’s emergency SOS is a two-way, text based service (in the low KB range in terms of data usage) using satellite helping users in locations without cellular service.
AST is aiming for 5G broadband from the beginning (I've been digging around, while 5G is ASTS' stated goal it seems like 4G speed is more realistic? Their letter to the FCC, re: Establishing a 5G Fund for Rural America, GN Docket No. 20-32, reads: "The SpaceMobile service will meet and exceed the download and upload speed requirements of 35Mbps / 3 Mbps". So at least in the US market they are aiming for at least 35Mbps, which is the average real life speed for 4G. Average real life speed for 5G are 50Mbps - 3Gbps. Anyhow the exact speed goal is not clear to me.).

My opinion: ASTS is trying to do something very different from GSAT. I wouldn’t consider GSAT a direct competitor to ASTS at all. As for GSAT itself I considered it a bad buy even with the recent Apple deal. Yes, Apple will help protect and expanse GSAT’s SPOT revenue. GSAT’s commercial IoT revenue are somewhat protected by their users’ hardware sunk cost. However, it faces intense competition in the IoT market. ASTS and Starlink could potentially wipe out GSAT’s Duplex business. Looking at GSAT’s stock price, it seems like the market agree with me.

As for 2 - T-Mobile Starlink deal, I will address this along with my reply to ItechJester.
Jr. Member
Nov 29, 2022
169 posts
346 upvotes
ItechJester wrote: I looked at it briefly, never really got to the point where it was on my buy list. There are some serious believers, some of whom I respect (ie https://twitter.com/spacanpanman)

But I decided against it.

My thoughts:
* Don't focus on the tech. It's unproven, you don't understand it, and ultimately not only factor that will make the company successful.
* Does the business model work? Other companies are giving away satellite connectivity for free (T Mobile). Yes, less speed and less fancy. But they are literally giving it away. And SpaceX has the launch advantage (cost) and starlink 2.0 will come out soon.) SpaceX is not a company I want to compete with.
Are you talking about the one-hour free inflight internet? If yes that’s irrelevant. ASTS isn’t planning anything in that space and they shouldn’t. Historically, commercial inflight internet targeting the average traveller is bad business – just take a look at the historical 5 years for the following stocks:
  • NYSE: TSAT, LuxSE: SESG, Euronext Paris: ETL
  • Intelsat S.A. is a private company but a quick look at their investor fact sheet on their website can tell you they are not doing so hot.
  • Gogo Inc. seems to lock down inflight internet for business users pretty tight with their ATG + satellite coverage.
____
In a similar vain, marine satellite internet market such as for cruise ship would be very hard to penetrate due to sunk hardware cost and therefore irrelevant for ASTS.

The T-Mobile and Starlink partnership is a low data service, such as emergency messaging and calls. This is extremely similar to the Apple Globalstar partnership deal. These partnerships are not a threat in the short term, things would change if and when they decided to venture into satellite broadband internet.

https://transhumanica.com/asts/_next/im ... w=828&q=75
Transhumanica said Starlink is not a direct competitor in the short term. I disagree with that assessment as the entire business case within the developed world for ASTS are:
  • rural internet – I agree with you Starlink is a formable competitor. The advantage for ASTS is that you only need a regular smartphone instead of buying a satellite dish, which isn’t much to be honest.
  • Filling in gaps and significantly extending the signal areas for existing telecom companies (ASTS’ main business model for phase 2); Starlink can’t touch that. Roaming for various telecom companies’ customers where agreement with local cell tower usage is not in place
____
TAM within developing world:
offer broadband internet for anyone with a smartphone without the purchase of a satellite dish or some other terminal hardware. ASTS’ business case is much stronger here as there are areas where even reliable electricity is a problem. Ground based cell tower is probably a pipe dream for these people and the purchase of a satellite dish is a significant investment. ASTS can charge them a lower amount while providing low data service at the level or slightly better as GSAT+AAPL and still make money. The 4G/5G plan could be offer to the richer portion of population and those areas that could afford it.

TAM for phase 1 would be northern South America, central parts of Africa, southern tips of India and majority of SE Asia. If the tech works, I can see ASTS starting to mature from a pre-revenue company into a going concern company while firmly entrench as THE telecom company for those area.
ItechJester wrote: * Best tech doesn't always win out.
* Is it a feature, or a business.
* Can't compete with cost of ground based towers, ultimately TAM will be limited.
See below.
ItechJester wrote: * What's the use case? Not urban or suburban (ground based networks cheaper and better). So who will ultimately pay the premium?
Disagree with losing against ground based towers due to cost. There are many areas where it’s not economically viable to install ground based tower due to difficult terrain, low population density, etc. TAM within the developed world would be rural, and gap within urban and suburban area, which is essentially the business case for existing satellite telecom provider such as Viasat and HughesNet. The kicker here is that ASAT is aiming to be a wholesaler so they don’t need to invest into consumer facing infrastructure (50/50 revenue split with existing telecom companies).
ItechJester wrote: * Very speculative
Agree, don’t delude yourself into thinking this is a long term investment. This is 100% gambling, period.
ItechJester wrote: * LEO satellites will need constant replacement (physics of how they work)
* Satellites have a long lag to upgrade, vs ground based network
* 5G network requires many more towers, vs 4G. Can't see ASTS getting scale and speed without a VERY extensive and expensive network.


Business might be ok in the long run, but it is not 'investable' for me. As I don't see exponential growth or massive margins.

Easier for a company like SpaceX to simply adopt 80% of the ASTS tech, and add it to StarLink 2.0, than it is for ASTS to launch satellites.
Going over the write up from Transhumanica Research … language style seems familiar. I’ve seen this type of … DD before.
A quick look at WHOIS database on https://transhumanica.com/ will refer you to http://tucowsdomains.com. Lookup Transhumanica on tucows/domains’ whois information will not gain you much as most identity info are redacted for privacy. We do know the website was initially created on 2021-05-20T17:35:20, last updated on 2022-08-02T14:45:12 from CA, USA. Registration Service Provider is Vercel Inc. https://vercel.com which provided off the shelf product designed to create website with high production values and easy to update.
Transhumanica Research
@transhumanica on Twitter, 100% tweets are ASTS related.
The most damning of all is that most of the research are really just a mix of various ASTS DD post on wallstreetbets and ASTSpaceMobile subreddit. There’s a 99.99% chance transhumanica is retail from r/wallstreetbets. Transhumanica is made up brand with a heavy bull biased on ASTS. At least their slick report has good list of references and the production value of their valuation model is through the roof. https://transhumanica.com/asts/model

So to balance things out here’s a bear biased source for ASTS:
https://www.kerrisdalecap.com/wp-conten ... .-ASTS.pdf

Summary:
ASTS is a pre-revenue company currently (25 JAN 2023) value at US $5.220 per share. It was a wallstreetbets darling in the past with a pump and dump history. It was $25.370 a share at one point and I’m sure people made and lost a good chunk of change then. The odds are against ASTS – there are tech, regulatory, and capital hurdles, any one of which could potentially kill the company. On the other hand, if you are willing to gamble there might be a good return decade down the road.
Deal Guru
Aug 17, 2008
10990 posts
13540 upvotes
COB $4.44

Goodbye, 'No Service' Areas! First Direct Smartphone-to-Satellite Phone Call Completed
25 Apr 2023, 21:24 UTC
https://www.autoevolution.com/news/good ... 14005.html
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
Jr. Member
Nov 29, 2022
169 posts
346 upvotes
Yeah ASTS proved the tech works (uplink + downlink, two way communications between satellite and unmodified smart phone), congrats I guess.

On the other hand, the stock price action so far had been very negative:
a) Successful launch - SP drops
b) Successful unfolding - SP drops
c) Positive FCC developments - drops
d) Validation of technology - drops

There's a reason for that. Management, especially the CEO - Abel Avellan do not respect public shareholders at all - poor communication, bad PR, screwing current shareholders by dilution are the norm.

They are currently behind schedule, expanded their scope (added 5 more satellites for phase 1), no institution funding in sight, already diluted at $5.50 collecting $75 million (see stock price action on 30 and 31 MAR 2023) with additional stock dilution pretty much guarantee. If you want to buy ASTS stock I would suggest you wait until either 1) announcement of institution funding or 2) phase 1 completed and revenue start coming in.
Deal Guru
Aug 17, 2008
10990 posts
13540 upvotes
Rogers Partners With Lynk Global to Bring Satellite-to-Phone Coverage to Canadians
April 26, 2023 11:25 ET

https://www.globenewswire.com/news-rele ... dians.html

"Rogers will begin to expand satellite-to-phone coverage in 2024 across Canada’s most remote regions and rural highways not covered by any wireless networks. The service will start with SMS texting and over time will expand to include voice and data to help all Canadians reach 911 with 5G and 4G smartphones."


MAY 25, 2021
Lynk Files for FCC License to Enable Global Mobile Connectivity
https://lynk.world/news/lynk-files-for- ... nectivity/

In February 2020, with the help of NASA and mobile network operators (MNO), Lynk sent the world’s first text message from a satellite in orbit to a standard mobile phone on the ground. Lynk has also signed contracts with the U.S. Air Force and the U.K. Space Agency to support development of the Lynk system.


tag: RCI.b
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience

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