A small-cap space communications company signed a agreement with one of the largest space companies Wednesday, causing shares to spike higher.
What Happened: AST SpaceMobile Inc (NASDAQ:ASTS) announced a multilaunch agreement with SpaceX Wednesday morning.
AST SpaceMobile is working to build the first and only space-based cellular broadband network accessible by mobile phones.
The new agreement strengthens an existing launch planned for summer of the BlueWalker 3 test satellite.
“This agreement secures the availability for a reliable launch of our first production satellites out of the U.S.,” AST SpaceMobile CEO Abel Avellan said. “Our summer launch of BlueWalker 3 will complete the development phase for our company.”
The BlueWalker 3 satellite will launch from Cape Canaveral on a Falcon 9 vehicle. The satellite is designed to communicate with mobile phones using 3GPP standard frequencies. No additional hardware or software is needed by mobile phones to use the broadband commercial service from AST.
Related Link: AST Attempts To Bring 5G From Space: What To Know About The SPAC Deal
Why It’s Important: The launch partnership with SpaceX could be important for the company’s future. At full capacity, the company plans to assemble up to six BlueBird satellites per month. A new production facility was purchased and highlighted in the company’s third-quarter earnings report.
SpaceX, which was founded by Tesla Inc (NASDAQ:TSLA) CEO Elon Musk, is a large space launch company and was named in the company's investor presentation (December 2020) as a potential launch partner.
The company’s long-term goal is to offer better mobile phone connectivity to the population that is unconnected.
Partners for AST SpaceMobile include Vodafone Group (NASDAQ:VOD), American Tower Corp (NYSE:AMT) and Rakuten Mobile. Rakuten, Vodafone, American Tower and Samsung are among the investors in the company.
In the third quarter, memoranda of understandings were signed with MTN Group, YTL Communications and Somcable covering several countries in Africa and the Middle East.
AST, which went public via SPAC merger in April 2021, is targeting a $1-trillion mobile wireless service market and the more than 5 billion mobile phones that move in and out of coverage.
ASTS Price Action: AST SpaceMobile shares were trading 28.15% higher at $8.65 Wednesday morning. Shares have traded between $4.84 and $15.48 over the last 52-weeks.
Photo courtesy of AST Space Mobile.
