$ASTS: SpaceX Goes ALL IN - The Field Is Set

For AST, this is very good because it locks the carriers into needing satellite service to counter Starlink. You can't... So the carriers, when they talk about population and coverage, and you know, I've got, I cover 96% of the population by threshold network. Well, Starlink to be able to say, I have 100% coverage of the country. And so you're going to need to work with... Not, you know, not just where people live, but absolutely 100% coverage. And so you're going to need satellite to make up the gap, right? This is like the whole wireless, where's back in the day where Sprint and Sprint used... Was it Sprint? Yeah, that engineer would say, can you hear me now. AT&T and Verizon and Timo, we're going to have to deploy satellite service to, in order for them to say we have 100% coverage too, right? And so it's table stakes, like the CEO of Timo will just said recently. And so this locks them in to AST Space Mobile, right? And so, you know, there might be some people are like, well, you know, what about Amazon, what about GlobalStar, what if they develop a D2D network and couldn't some of the carriers work with Amazon? We've already seen that story, guys. Timo will work with SpaceX, and then they birthed this being that they couldn't control and then eventually that, you know, SpaceX is now in Starlink is out either lunch. You don't think Amazon is going to have that same propensity to, you know, oh yeah, I'll work with you as an M&O and then eventually I'm coming to your lunch. Like, we've already seen that. So for the carriers, they've, hopefully they've wised up here and now they know that, you know, there's no tiptoeing around, you know, is Starlink going to compete. They absolutely are competing, right? They are looking at the entire revenue and profit pool of the carriers and they're going for it, right? And so what does that mean for AST? Well, that means that the strategic value of this little company out of Midland has gone up once again, right? And so, you know, someone might say, well, I thought wouldn't grain have been a good deal for AST to lease that? Yeah, it would have been great, but, but now that it's gone, one of the interesting things that today's FCC order just showed is that now the rest of the cellular spectrum from the carrier, so under supplemental coverage from space, there was only a few nationwide bands that were allowed to be used for satellite. Now that's being opened, now the entire spectrum band for all carriers is being opened up for direct-to-device connectivity. So that means that AST working with carriers can light up all that spectrum, right? And on top of that, you don't need to have a contiguous geographic path of spectrum. You actually, in that new order, you can just do segments of it. And so it brings to bear what 480 megahertz of additional terrestrial spectrum from the carriers that AST can use. And so on the one hand, the FCC said, hey, we're going to give by letting, you know, a SpaceX buy this by grain management. We're going to give them the tools to go fight against M&O's. And then on the other hand, the FCC also said to the M&O's, hey, if you want to go deploy all of your spectrum in areas where you're not using it to counter Starlink, then go ahead. And so, tip the hat to Brennan Carr. He's opening up competition, which is great for those who have good technology. And so here, now, you know, let's talk about the Telecom JV. So the Telecom JV was formed in May, and that was clearly done. Although some industry consultants would say, hey, you know, the Telecom JV was developed to better negotiate against Starlink. No, you're idiots. That JV was put together to form a consortium to better compete against SpaceX, right? And to pull the resources, pull spectrum, pull terrestrial gateways and network integration, pulling that together so that they can more effectively coordinate and compete against SpaceX, right? And in particular, I'm talking about not, you know, terrestrial networks. I'm talking about satellite, right? Because satellite is hard to do. And so as we know, clearly, you know, AT&T and Verizon have been working with AST, and T-Mobile has been talking and negotiating with AST Space Mobile. That's going to absolutely come to fruition now. I mean, there was any doubts, right? And sometimes, you know, when I would go to bed, they'd think, oh, am I missing something? Like, what if the Telecom JV made me, maybe my read is wrong? Well, today, make no mistake about it. Like, this is absolutely happening, right? Like the Telecom JV is working with AST. The, when I had originally put, you know, maybe a few months or quarters out, that T-Mobile would sign a definitive agreement with AST. That definitive agreement can come way sooner. I mean, I thought, who's crazy? It's like, why are you, why are you like trying to do some voodoo and make this like this definitive agreement get announced with between T-Mobile and AST for this week? Like yes, they scrubbed the website last week, but whatever. Like, I still think we're far, far ways off. Today's news actually accelerated. So we may not be, we may be days away or weeks away from T-Mobile announcing definitive agreement with AST. Now, this actually puts the Starlink and T-Mobile relationship in a very interesting place, right? Because Starlink, you know, it's like, what's a good analogy? Let's say like you have, you have a married couple and the man is often cheating with somebody else, right? And the married couple stays together for convenience or whatever, just to show appearances. And so in that instance, you know, Starlink is the man, the woman who's in the marriage is T-Mobile. And everybody knows like that guy is cheating. Like it's very public. He's cheating. And the woman is, you know, the unfortunate wife is looking awful in that situation. That's kind of what we're in right now. I mean, Starlink is sad. We bought this low-band spectrum. We're going to go competing against these three guys, right? And so now for T-Mobile, what do they do? Like, they should as quickly as they can and that relationship. If I was them, I would totally take back my spectrum and end that, you know, they can terminate the relationship and so end the satellite connectivity because the longer that you have this thing running, the worse it is for you, right? And so that's a really odd predicament for them to be in. But I do think now that they're hung out to dry, they really do need to sign a defender agreement with AST. And I think that happens much sooner than later than I had previously thought, right? And so what's interesting is that now that the FCC has enabled Starlink to become an M&O and Starlink has pretty much said, we want to become an M&O. We want to compete. And the incumbent three providers are like, we're not going to enable you within M&O. They now have a leg to stand on, right? So the telecom JV, you know, John Stinky had said before that, you know, maybe that in the Department of Justice, the anti-trust review, the telecom JV will get a second request and it likely will get the second request before it gets approved. But now they can say, well, hey, look, we're just forming this on the satellite side, but you know, you've got Starlink who's creating a fourth competitive carrier. This is not anti-competitive, right? Like you've got a $2 trillion market cap company that has midband spectrum assets. It's just acquiring lowband spectrum assets. And so it's going to be able to compete. Like if there's any tech company out there that competed SpaceX, right? And so it's going to be hard for the DOJ and the FCC not to approve the telecom JV. And so yeah, it's really interesting times. You know, there was also this pushback from people of the JV, maybe it's going to pressure pricing for AST. No, it's not, right? Like in this case, if Starlink, which is what it tells is, you know, being a Maverick M&O and it's going to push, you know, 100% coverage connectivity, then for AT&T Verizon and T-Mobile, they're going to need a healthy partner to counter that, right? And so in countering that, the last thing you want to do is starve your partner or capital or profitability, right? And so you're going to maintain the 50-50. I don't know. Maybe it's 40-60. But yeah, you're going to support the strategic counter that you need to respond to SpaceX, right? And so I think in terms of pricing, I don't think that's going to be an issue. Will the carriers overall price and get hurt? Maybe, right? Because now you've got a fourth player coming in. They're going to be looking to take share. And so over the industry overall, that can't be good, right? But for AT&T, if you get 100% market share of the three largest carriers, and you know, maybe, I don't know, let's be really aggressive. Let's say like 20% of people choose to go with Starlink Mobile, which, you know, who knows how good that service will be? Especially, you know, if you're a rural person, that might be, if you live in a rural area, that might be good. You know, if you live in New York or Boston or LA, or you live in any medium-sized city or suburban area, it's probably not going to be that good of a service, right? Because even grain management, seven by seven megahertz of a spectrum, even through a lot of reuse, that's going to be pretty tough, right, to provide a decent amount of coverage. But this is SpaceX. They'll figure it out, right? They've got a lot of money. They're raising $40 billion to go by AI processors that can probably raise money to build out a terrestrial network. You know, I guess one interesting thing is that they're getting pulled in a lot of different directions. And so I guess the question is like, how well can they execute? But we'll see. But most important thing is that what originally was viewed as AST having AT&T, and then they have Ryzen AT&T, now they've got T-Mobile. They're going to have T-Mobile. Like I'm 100% confident of that, right? This pretty much, you know, the die is cast. There's no going back. And so interestingly, you know, if you look at where AT&T and Ryzen and T-Mobile trading after hours, they're getting absolutely clovered, right? As they should because what was a, you know, stable, allegopoly may become a bit more unstable, right? And so as a result of that, they need to do something. There's a company out in Midland, Texas that helps them do that, right? And so that's a huge positive. I don't know how long it'll take. I mean, obviously, well, let's see, guess, Debak. So the macro environment is awful. Rates have been going up. Oil's going up. And so whether you have positive news or fundamental positively, you know, positive catalysts, like those things don't really move stock right now. But once people digest this, and I don't know how good this outside is, actually, it's pretty awful. We'll see. I think there will be a few guys who get it from the sell side for AST that will say, wow, this is actually, this increases their importance and relevance. And so this is good. But for the sell side that cover AT&T, Ryzen, T-Mobile, they're going to be beside themselves. They're not going to know what exactly is going on and how these companies will react. And so I think actually now, for an AT&T and a Ryzen T-Mobile, they've got to be more outward about it, right? Because you have to get the messaging right. And you can't just say, well, we want to foster competition amongst satellite providers just to get, you know, regulatory review done with this telco JV. People want answers, right? And so they're going to want to say, well, what are you doing to counter SpaceX? And so I think the narrative is going to become more sharpened in the next few weeks. And people will start figuring out, oh, there's this company called AST that all the carriers are using. And so yeah, and this is not just something that is here in the US. You can just copy and paste this across the globe, right? And so, interestingly, I've written this post. It was actually in response to someone, you know, questioning AST's business model. And so I posted it about the fact that, you know, putting a site technology, Inspector and whatever it is, right? The fact of the matter is that AST has a compatible business model with the way that, you know, foreign countries and regulators want, and M&O's want to deal with satellite, right? And so for SpaceX, you know, whether you're a bull or bear or whatever it is, right? Forget about politics like SpaceX is becoming a huge, a huge and influential company, right? And so it's getting its fingers into everything. And it's going to be trying to become a global carrier, global global, global network operator. And that has world implications, right? Because the principle, Elon Musk, who runs a company, has a lot of interesting political views. And so those aren't necessarily compatible with the views of democracies around the world, right? And so whether you support them or you don't support them, the fact of the matter is that a lot of these countries and regions want to have a sovereign solution. And so you saw, then, you know, after I had written about the fact that when you have a company like Starlink that comes into a country, the country has its own national champions and operators, right? And so those operators, the incumbents will have invested billions of dollars in spectrum and infrastructure. They employ local people, they generate profits, they invest in, you know, the local country. And you've got this, this foreign company coming in that has its own agenda, potentially. And it's going to compete with your incumbents. And so as a regulator, like, do you, how do you deal with that? Do you approve that foreign entry, you know, that foreign company to enter into your market and basically compete or even in some cases maybe have this rate, your incumbents? No, you don't. You put some constraints on it at a minimum. And so, you know, you want to look at the net benefit of it, right? And so if there is no net benefit, then maybe you don't allow that company to enter.