AST SpaceMobile discloses further satellite delays and cost increases

The launch of the first commercial satellites in AST SpaceMobile’s cellphone-compatible broadband constellation has slipped into 2024, the company said March 31 as it disclosed rising costs for developing the network. AST SpaceMobile had planned to launch the first five BlueBird satellites it is building in-house on a SpaceX Falcon 9 before the end of this year, already about six months behind schedule because of supply chain issues. These satellites, known as Block 1, are now slated to launch in the first quarter of 2024 to low Earth orbit, where they would provide connectivity for smartphones outside cellular coverage in partnership with mobile network operators (MNOs). The Block 1 satellites are 50% smaller than originally planned to speed up development, about the same size and weight as the company’s 1,500-kilogram BlueWalker-3 prototype satellite that launched in November. The Texas-based company said it is actively talking with several launch providers to begin deploying 20 full-sized BlueBird satellites in Block 2 later in 2024. Although AST SpaceMobile expects to start generating revenues after deploying Block 1, it said in a regulatory filing that Block 2 will also be needed to “provide coverage to the most commercially attractive MNO markets.” The company has previously said it needs 110 BlueBirds in LEO to reach substantial global mobile coverage. AST SpaceMobile raised around $417 million for its plans in April 2021 when it became a public company by merging with a special purpose acquisition company (SPAC). However, the company said in the regulatory filing it needs to raise between $550 million and $650 million to develop, build, and launch all 20 of its Block 2 satellites.

AST SpaceMobile said Nov. 14 it had successfully unfolded BlueWalker-3's 64-square-meter antenna — the largest deployed commercially in low Earth orbit. Credit: AST SpaceMobile

Rising costs

AST SpaceMobile said in August that the cost for each Block 2 satellite had increased by about 14% to $16 million as inflation and rising supply chain prices weighed on the company.

In the March 31 regulatory filing, it said costs had risen to between $16 million and $18 million per Block 2 satellite.

“The cost of the satellite configuration has increased due to the impacts of inflation, supply chain disruptions, design changes, and increase in the cost of electronic components, launch costs and other aspects of our design and assembly activities,” AST SpaceMobile stated.

The company said it has enough cash to fund the Block 1 satellites, estimated to cost between $100 million and $110 million in total, and for its operations over the next 12 months.

However, it is exploring multiple routes to raise additional capital, including taking on debt, issuing equity, and securing funds from export credit agencies.

While AST SpaceMobile CEO Abel Avellan said BlueWalker 3 has validated the company’s network architecture, and proven its ability to deliver 4G and 5G speeds, he said tests are not yet complete.

The company plans to announce the results of these tests at a future date in conjunction with MNO partners, Avellan added.

AST SpaceMobile recorded $239.3 million in cash reserves at the end of 2022.

Total operating expenses increased by $61.3 million to $152.9 million for 2022, compared with $91.6 million for 2021.