MIDLAND, Texas - AST SpaceMobile, Inc. (NASDAQ: ASTS), whose stock has surged over 378% in the past year, announced today an agreement granting the company long-term access to up to 45 MHz of lower mid-band spectrum in the United States. This spectrum is intended for direct-to-device satellite applications and is part of the company’s strategy to enhance its space-based cellular broadband network. According to InvestingPro data, the company maintains a strong liquidity position with a current ratio of 5.8, indicating robust short-term financial stability.
The agreement, once finalized, will see AST SpaceMobile’s network, which already plans to utilize low-band spectrum across the continental United States, paired with the additional lower mid-band spectrum. This pairing is expected to support the company’s goal of delivering peak data transmission speeds of up to 120 Mbps to smartphones.
AST SpaceMobile’s Chairman and CEO, Abel Avellan, stated that the access to the largest available block of high-quality nationwide spectrum significantly enhances their planned offerings. The company aims to provide a true broadband experience from space directly to everyday mobile devices, in collaboration with its mobile network operator partners.
The transaction involves a Restructuring Support Agreement with Ligado Networks and is subject to the entry into definitive documentation, expected in the first half of 2025. Upon completion, AST SpaceMobile will gain spectrum usage rights for over 80 years to up to 40 MHz of L-Band MSS spectrum in the United States and Canada, plus an additional 5 MHz in the 1670-1675 MHz Band in the United States.
Ligado will receive approximately 4.7 million penny warrants convertible into AST SpaceMobile Class A shares and, upon closing, additional consideration of approximately $550 million, supported by a $550 million institutional financing commitment for AST SpaceMobile. Annually, AST SpaceMobile will pay roughly $80 million for spectrum usage rights and provide Ligado with long-term net revenue sharing rights. With a market capitalization of $6.68 billion, InvestingPro analysis reveals the company holds more cash than debt on its balance sheet, though investors should note that analysts don’t expect profitability this year.
This announcement follows the September 2024 launch of AST SpaceMobile’s first five commercial BlueBird satellites, aiming to offer non-continuous cellular broadband service across the United States and in select global markets. The company also secured strategic investments from major industry players and government contracts in 2024. InvestingPro subscribers can access 12 additional key insights about ASTS, including detailed analysis of its growth prospects and financial health metrics, available in the comprehensive Pro Research Report.
The information in this article is based on a press release statement from AST SpaceMobile.
In other recent news, Cadence Design (NASDAQ:CDNS) Systems and AST SpaceMobile, Inc. have collaborated on the development of the AST5000 ASIC, a chip designed to enhance processing bandwidth by up to ten times per satellite. This is a key component of AST SpaceMobile’s BlueBird program, which aims to provide high-speed internet from space to standard smartphones on Earth. The partnership has also resulted in significant power, performance, and area optimizations in the system-on-chip.
AST SpaceMobile’s CEO, Abel Avellan, recently entered into a variable prepaid forward contract, a strategic move approved by the company’s Board of Directors. This transaction accounts for approximately 3.2% of Mr. Avellan’s total holdings and less than 1% of the company’s total Class A common stock. The company has also reported a substantial increase in cash reserves to $518.9 million.
In addition, AST SpaceMobile is negotiating commercial agreements with major partners like AT&T and Verizon (NYSE:VZ), and plans to expand its ground infrastructure in the U.S., Europe, and Japan. Despite an increase in estimated direct material and launch costs per satellite, the company remains confident in its growth trajectory. These developments are part of AST SpaceMobile’s ongoing efforts to establish a global cellular broadband network in space.
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