NotKen2024

Former wireless infrastructure exec.

[NotKen2024 @NotKen2024]

$ASTS So, Scott mentions 5/6 different non D2D opportunities that will each be multi billions of dollars per year. That’s $10b per year minimum.

Abel confirms they will be working with every carrier in US and Europe (and of course lots of others). Since nearly every mobile plan will include ASTS service that’s also a minimum of $10b per year.

So, $20b minimum revenue per year. Profit of approx 15/16b a year. A multiple of 30 (similar to tower CO’s). That’s a $450b to $480b market cap.

I bought years ago thinking the market cap could hit $200b. Happy to see I was wrong. 😉

[NotKen2024 @NotKen2024]

@1MoreSmithHere @Defiantclient2 @keyesmn I’d be surprised if they haven’t already figured it out. A lot of work went into their agreements and they for sure contemplated that it could all evolve beyond the original simplified thesis.

[NotKen2024 @NotKen2024]

$ASTS — I’ve seen a number of comments recently, including from some ASTS bulls, questioning the potential uptake for ASTS service — including the consistent comment that even with relatively modest uptake percentages, the opportunity for ASTS is still very big.

I think this whole discussion completely misses the sea changes that have happened in the D2D landscape since the original pitch for ASTS’s service. That pitch was that the carriers would sell this extended satellite coverage to customers as a voluntary add-on on a monthly or daily basis. The carrier and ASTS would then split the revenue 50/50 from these sales.

Some bulls have argued for quite a while now that the service would quickly, or at least eventually, morph into a standard feature of most cell plans (like texting did), dramatically increasing usage/uptake. I’ve always agreed with that take, but there were reasonable arguments on both sides.

I don’t think there are two sides to this anymore. The satellite service offered by ASTS will become standard on nearly every cell phone plan. Here are the reasons why:

1. The carriers have made it clear that they will look to decommission some of the rural terrestrial sites whose service can be replaced by satellite. Initially, this cost-saving opportunity was simply going to be a “nice to have” for the carriers. Why not eliminate some of your high-variable-cost assets (individual cell sites) with lower-cost fixed costs (a satellite constellation)?

2. With Starlink planning to launch its own network, however, this “nice to have” becomes a business imperative. The carriers can’t afford to simply look around and cut the most obvious money-losing cell sites. Instead, in order to keep their cost structures as closely aligned with Starlink’s as possible, the MNOs will have to be aggressive in eliminating any and all sites that can be replaced with satellite coverage.

After all, Starlink, with a satellite-first network, will only build those terrestrial sites that are absolutely necessary for competitive service. The carriers will not be able to compete if they retain massive redundant costs that their competitors do not.

3. Based on the above, the carriers will not get away with offering satellite coverage as an add-on. You can’t go to your customers and say, “Hey, buy this new cool service that fills in the very few coverage gaps in my network,” and then turn around and create a whole bunch of new coverage gaps when you decommission a bunch of sites.

No. You will need to provide the satellite service as a core offering of your plan.

4. In the same vein, the carriers cannot go to their customers and tell them to pay extra for satellite coverage when their new competitor, Starlink, will not.

5. Lastly, while satellite coverage was initially viewed simply as a way to fill in coverage gaps at the edge of the network, it’s now generally accepted that it will play a much larger and more integrated role in MNO network planning.

Satellites will be used to fill in coverage holes wherever they exist — not just at the edge of the network, but in urban, suburban, and exurban locations as well. They’ll be used to enhance coverage in one-bar areas. They’ll be used to provide that little bit of extra capacity when needed. And, as @CatSE___Apex___ details far better than I can, the integrated overlay use cases for satellite coverage are massive.

a. Because of the ubiquity of all of these use cases, coverage provided by satellite service will be an essential service, not an add-on.

Now, it might take a little while for this to happen. After all, Starlink won’t be a credible threat to MNOs for many years, and MNOs won’t decommission sites until they can be fully replaced by satellite coverage — which will happen on a multiyear rolling basis as the initial ASTS constellation matures and new constellations are added.

And it wouldn’t surprise me if there were usage-tier rates related to satellite usage, just like there are for many data plans.

But, in the end, there’s not much of a credible argument left against satellite coverage being core to nearly every mobile phone plan in the not too distant future.

So, when you think about the market size or uptake rate for ASTS’s service, I think you really need to model something like 80–90% of the subscribers of each MNO they partner with.

How the economics of that flow to ASTS remains to be seen, but given the essential nature of what they are providing the opportunity is enormous - especially when applied across the world.

[NotKen2024 @NotKen2024]

@spacanpanman @1MoreSmithHere @dbkopp Absolutely. That will help address rural areas that have small pockets of higher capacity. Or lower capacity exurban sites.

[NotKen2024 @NotKen2024]

@1MoreSmithHere @dbkopp The coverage radius of the site is not really the relevant factor. How much bandwidth is needed within the area covered by ASTS is what matters. Hilly or 🌲areas need more towers for coverage not capacity. ASTS may replace 1 rural tower or multiple rural towers with 1 cell.

[NotKen2024 @NotKen2024]

@tottaway22 This concept is fantasy. To compete with MNOs you have to provide coverage in EVERY urban location not covered by EACH user’s WiFi access. Satellite can only handle a fraction of this (very limited in-building w/mid-band). The rest requires a robust terrestrial network.

[NotKen2024 @NotKen2024]

@spacanpanman As posted before I knew this would be the case. But now with the Starlink threat it’s even more critical. MNO’s need to eliminate every cost that Starlink can avoid so they can put that $ into network elements (DAS, urban densification, etc.) that keeps them ahead of Starlink.

[NotKen2024 @NotKen2024]

@deepvaluedude @deepvaluedude is right here except I think they will outright cancel/ decommission low capacity rural sites (most of which they don’t own making that easier). Each carrier currently spends billions each year on sites that can ultimately be covered by ASTS’ full constellation.

[NotKen2024 @NotKen2024]

@RavnirX @spacanpanman I would be shocked if the MVNO‘s have a right to sell their MVNO contract to another party without the MNO’s approval.

[NotKen2024 @NotKen2024]

@LeoCapital_01 @SpaceX They don’t just need T Mobile for the spectrum they need it for the terrestrial network too or they don’t really have much of a mobile offering. A satellite only network cannot compete - at all. Musk said acquiring an MNO might be possible. Either way it’s good for ASTS.

[NotKen2024 @NotKen2024]

@spacanpanman I’d be shocked if any MVNO had the rights to sell to SpaceX. Only way SpaceX can compete w/ wireless TNs is to build their own TN which, they’ll learn, is orders of magnitude harder than building Tesla’s Supercharger network, or buy an MNO (TMO?). Would clarify D2D market.

[NotKen2024 @NotKen2024]

@ASTS_Investors As @SueWallSt says the carriers have made this thesis clear. Stanky said it specifically. Having spent >25yrs helping build cell networks for every carrier I know how much resources are spent on hard to cover areas and how valuable ASTS’ solution to the prob is to the carriers.

[NotKen2024 @NotKen2024]

@ASTS_Investors @spacanpanman Co-owned scores of rural towers. Since towers are liabilities w/o tenants (cost to remove them), I regularly researched potential threats. Satellites always seemed most obvious. After years of checking ASTS finally emerged. Sold our towers and began accumulating after the IPO.

[iPilot🅰️ @OmniAeronautica]

I think this is fair criticism for a lot of “space stocks,” but I would separate $ASTS from the generic rockets, Moon, Mars, vibes bucket.

@AST_SpaceMobile is not asking investors to believe in asteroid mining or a Mars colony. AST is trying to sell mobile connectivity to existing wireless carriers, using satellites as infrastructure. That is a much more boring business model, and in this case, boring is the point.

The real question is exactly the one you asked: show me revenue, show me margin, show me the business model.

For AST, the business model is not “space is cool.” It is: mobile network operators already have billions of subscribers, billions of phones already work on cellular spectrum, and there are still massive coverage gaps on Earth. If AST can connect ordinary phones directly to satellites through carrier partners, then the relevant market is not “space tourism” or “Moon bases.” It is global mobile connectivity, rural coverage, emergency coverage, government/public safety, enterprise resilience, and eventually data services layered on top.

That is also where the wild share price scenarios come from. When someone floats something like $5,000 per share, it should not be treated as “the stock goes up because space.” The only serious version of that argument is that AST becomes a high-margin global wireless infrastructure layer and captures meaningful revenue across several very large markets over the next five years.

Is that guaranteed? No.

Is it still execution risk? Absolutely.

Does it need real revenue and margin proof? Yes. That is the whole ballgame.

But putting AST in the same mental bucket as “we landed on the Moon in 1969 and still haven’t colonized Mars” misses the actual thesis. This is not a lunar romance story. It is a telecom infrastructure story. If the company fails to convert the technology into scaled recurring revenue, bears win. If it does convert, then the current valuation may end up looking less like hype and more like the market trying to price a new layer of global connectivity before the income statement fully shows it.

[NotKen2024 @NotKen2024]

@CytoplasmicANA The only way they can ever hope to be the preferred partner in urban areas is to acquire a lot more spectrum and invest tens of billions building a terrestrial network (min 10-15 yrs) or buy an MNO. And do this market by market. ASTS’s partner approach is the winning strategy.

[NotKen2024 @NotKen2024]

@LukidDreamer @CatSE___ApeX___ No, that would be totally unrelated. (Having years of wireless and fiber deployment experience)

[NotKen2024 @NotKen2024]

@LuckyStuey @LeoCapital_01 @Gwynne_Shotwell @SpaceX These are not landline networks where you use an LCR algorithm and pick the cheapest option for an entire session. These are dynamic mobility networks where they will default to the most integrated solution and then, MAYBE, consider other options in some scenarios.

[NotKen2024 @NotKen2024]

@LuckyStuey @LeoCapital_01 @Gwynne_Shotwell @SpaceX 😂

[NotKen2024 @NotKen2024]

@GuywithUmbrella @DaMadMonk_ @spacanpanman Costs to operate a tower includes rent, power, telco, technicians, generators, maintenance (access roads, theft, wear and tear, etc.). Total is often >$100k/yr. Then add capital cost to upgrade every few yrs. Another >$100k/yr. Adds up fast. Only justifiable w/lots of traffic.