TAMPA, Fla. — Google and AT&T have joined in a $155 million strategic investment in AST SpaceMobile. AST SpaceMobile plans to raise twice that amount to fund a constellation of direct connections to smartphones.
This strategic investment also includes funding from existing shareholder Vodafone, one of Europe's largest telecommunications companies with a significant presence across Africa. This comes alongside AST SpaceMobile's plans to draw down up to $51.5 million from its existing debt facility and raise at least $100 million through the sale of discounted stock.
The capital injection will support AST SpaceMobile's ambitions to roll out commercial services this year, with the company planning to launch the first five 1,500-kilogram operational BlueBirds, known as Block 1, on a dedicated satellite. It is preparing to begin production of a spacecraft that will be twice the size of the satellite. SpaceX Falcon 9 until the end of March.
AST SpaceMobile says its subsequent Block 2 BlueBirds will each have 10 times the capacity of Block 1 satellites, providing more performance to its low-Earth orbit satellite constellation and helping AT&T, Vodafone and other terrestrial mobile network partners connect subscribers. It is said that it is designed to maintain the Out of cell phone tower coverage.
The Texas-based venture's 1,500-kilogram prototype, BlueWalker-3, achieved download speeds of about 14 megabits per second during testing in September. These tests also confirmed for the first time that BlueWalker-3 relays short 5G calls to regular smartphones in the cell phone dead zone.
AST SpaceMobile announced in August that its five Block 1 Bluebirds were fully financed, taking on $115 million in debt.
AST SpaceMobile raised $417 million in 2021 through a merger with a special purpose acquisition company (SPAC), a deal that listed the seven-year-old company on the Nasdaq Stock Exchange. The group has since raised more capital, but quickly ran out of cash as production delays and cost overruns weighed on the stock price.
The venture firm priced its $100 million stock sale at $3.10 per share on January 18, a 25.5% discount to the previous day's stock price, and as of April 7, 2021. That was a far cry from the price of $11.81 reached at the end of the first day.
AST Space Mobile said the stock offering is scheduled to close next week and could raise an additional $15 million if the underwriters choose to purchase all of the shares in the offering.
Most of the $110 million worth of strategic investments announced on January 18 are in the form of bonds that pay interest to Google, AT&T, and Vodafone, but could later be converted into equity in AST SpaceMobile.
As part of the investment, AT&T and Vodafone also agreed to make upfront payments of $20 million and $25 million, respectively, for future AST SpaceMobile commercial services.
AT&T's revenue commitment is tied to the successful operation of its first five BlueBird units, and the US-based carrier's recent move to launch BlueBird in a direction better suited to serve North America. It suggests that there was something behind the decision.
The telecom giant is also supporting AST SpaceMobile's efforts to seek regulatory approval in the U.S., and smartphone direct-connect competitors such as SpaceX and Lynk Global are also awaiting clearance to offer commercial services.
Revenue commitments from UK-based Vodafone are subject to a final agreement, which remains undisclosed.
According to AST SpaceMobile, five BlueBirds are sufficient for intermittent connectivity services, suitable for government and commercial device surveillance applications, but ultimately 90 are needed for 5G broadband services that include voice and data capabilities. is.
Vodafone and AT&T have also ordered network equipment for an undisclosed amount to support future commercial services, the satellite carrier said.
The investment from Google, which powers the Android operating system used on more than two-thirds of the world's mobile devices, comes with an agreement to collaborate with AST SpaceMoblie on product development, testing and implementation plans.
Competitor Lynk Global is also in the midst of raising significant funding after launching partial commercial service with three satellites in parts of the Solomon Islands, Cook Islands and Palau.
The Falls Church, Virginia-based venture is considering joining the public market for AST Space Mobile by merging with SRAM Corporation, a SPAC led by former professional baseball player Alex Rodriguez. There is.
SpaceX announced last week that it had successfully relayed text messages to and from unmodified smartphones for the first time after launching an initial batch of satellites to test the functionality.