Direct-to-cell satellite firm AST SpaceMobile has received investment from AT&T, Google, and Vodafone.

The company this week announced a $155 million strategic investment from the telcos and search giant, along with aggregate new financing of up to $206.5 million. The company said it also plans to draw up to $51.5 million from the company’s existing senior-secured credit facility.

BlueWalker 3 AST SpaceMobile.jpg
– AST SpaceMobile

The investment is intended to support the commercial roll-out of AST SpaceMobile’s network and is comprised of a mix of equity-linked capital and non-dilutive commercial payments. The investment includes $110 million of 10-year subordinated convertible notes; $20 million revenue commitment from AT&T, predicated on the launch and successful initial operation of the first five commercial satellites; and $25 million minimum revenue commitment from Vodafone, subject to a definitive agreement.

Chris Sambar, EVP, head of network, AT&T, said: “Through our work with AST SpaceMobile, we’ve already proven the possibilities that satellite has to offer in helping connect more people via text, voice, and video. We’re excited to deepen our relationship with this investment as we continue to drive a first-of-its-kind innovation forward and work together to achieve this shared vision of space-based connectivity for consumers, businesses, and first responders all around the globe.”

Margherita Della Valle, Vodafone Group chief executive, added: “Vodafone’s investment and collaboration with AST SpaceMobile will help make our mobile connectivity services available everywhere for our customers across Europe and Africa. Customers in remote rural areas, on land or out at sea, will be able to benefit from fast and reliable 5G broadband directly to their existing smartphones without the need for specialist equipment.”

The announcement also noted that Vodafone and AT&T have placed purchase orders for network equipment from AST SpaceMobile to support planned commercial service, for an undisclosed amount. Google and AST SpaceMobile have agreed to collaborate on product development, testing, and implementation plans for SpaceMobile network connectivity on Android and related devices.

Abel Avellan, chairman and CEO of AST SpaceMobile, said: “Our vision at AST SpaceMobile has always been to chart a course of collaborative innovation and integration with the world's leading wireless companies, which is why we are so thrilled to be welcoming this new strategic investment from AT&T, Google, and Vodafone.”

He continued: “With this strategic investment, we are gaining capital, invaluable expertise, and strategic partnership. This investment comes alongside prior investments by other leaders in the wireless ecosystem, including Rakuten, American Tower, and Bell Canada, all of whom are not only part owners of AST SpaceMobile but also serve as our technology partners and customers."

Vodafone was an existing investor in AST and has conducted trials with the satellite firm. AT&T has previously partnered with the company to trial its technology. The 2023 demonstration of 2G, 4G LTE, and 5G calls offered 14 Mbps download speeds per 5 Mhz channels – directly to unmodified smartphones.

Founded in 2017, the company’s first test satellite, Bluewalker 1 was launched in 2019; Bluewalker 2 was canceled. Its latest test satellite, Bluewalker 3, launched in 2022.

AST was planning a constellation of almost 170 satellites; the first 20 were originally due to enter operation by 2023, with another 90 deployed through 2024. According to more recent press releases, it seems to have revised its constellation plans down to 100.

More recently, the company has said its first five satellites are fully funded and plans to begin launching in Q1 2024, but will need to raise $600 million for the next 20 satellites. The company aims to offer data transmission speeds of up to 120 Mbps

AST has previously announced deals with Vodafone subsidiary Safaricom in Kenya and Saudi telco Zain. MoUs signed with Telefonica, Orange, Indosat Ooredoo, Tigo, Telstra, Smartfren Telecom in Indonesia, and others. It has also signed agreements with Rakuten and TIM Brasil.

UBS Investment Bank, Barclays, and Quilty Space acted as financial advisers to AST SpaceMobile on the strategic investment, with Sullivan & Cromwell LLP serving as legal counsel.

This week also saw AST launch of a public offering of $100 million of its Class A common stock.

In other recent satellite news:

- Singaporean telco Singtel has added Strarlink to its maritime communications offerings.

- Canadian ISP Mage Network has signed a Memorandum of Understanding (MoU) with Telesat to utilize the latter’s upcoming Lightspeed Low Earth Orbit (LEO) satellite network to provide connectivity to remote areas of Canada.