The reason behind a 5% increase in AST SpaceMobile's stock price.
Thrilled to see AST SpaceMobile (ASTS 17.46%) shares taking a leap forward on Thursday, climbing 5.2% within the first 10 minutes of trading. The surge comes after some groundbreaking news in the realm of direct-to-cell satellite communications (DTC), a sector that's gaining traction fast.
News broke yesterday, courtesy of Reuters, detailing the completion of a "world-first" video call via a standard smartphone from a remote location, achieved through an AST SpaceMobile satellite, specifically the BlueBird. While the headline might seem familiar, it's interesting to note that Vodafone itself announced this development a day earlier—on Tuesday. They boasted about achieving the "first space video call from an area of no coverage using a standard mobile phone and commercial satellites built to offer a full mobile broadband experience." The call was placed from a remote location in Wales, where mobile broadband has never existed, to Vodafone's new space-to-land gateway.
Vodafone confirmed that the phones used during the experiment were standard 4G/5G devices, and AST satellites aided in the endeavor. Not to forget, Vodafone has a strong stake in AST as a partner and an investor. American telecom giants AT&T and Verizon are also on board with AST's mission.
British astronaut Tim Peake and AST CEO Abel Avellan hailed the achievement as a significant breakthrough and another step forward in their partnership with Vodafone, respectively.
Amidst the celebrations, however, it's important to question whether this development positions AST SpaceMobile as a solid investment prospect. While Vodafone acknowledged AST's innovative technology, the company has yet to establish beta service on its satellites for partners like Vodafone. Furthermore, competitors like SpaceX are closing the gap quickly.
SpaceX boasts over 300 DTC Starlink satellites in orbit and has begun beta service, although it's limited to text messages at present. Elon Musk has hinted that the Starlink DTC capabilities will only improve over time. The race between AST and SpaceX is intense, and with time running short, the stakes could not be higher.
Sources:
[1] https://www.ast.space[2] https://www.starlink.com[3] https://www.reuters.com/technology/spacex-starlink-to-provide-phone-calls- anywhere-earth-insiders-say-2023-03-01/[4] https://www.satellitetimes.com/article/ast-spacemobile-news-partnership-verizon-us-cellular-service/[5] https://www.cnet.com/tech/space/elon-musk-spacexs-starlink-will-allow-mobile-phones-to-communicate-without-cell-towers/
Given the intense competition between AST SpaceMobile and SpaceX in the direct-to-cell satellite communications sector, investors might want to closely monitor the financial performance of both companies. As SpaceX has already started beta service with its Starlink satellites, offering limited text messaging capabilities, investing in AST SpaceMobile, which has yet to establish beta service, carries significant risks and uncertainties. However, with the potential to revolutionize mobile communication, AST SpaceMobile could still be an attractive investment option for those with a strong risk appetite and a belief in its innovative technology.
