AST SpaceMobile: The Business of Connecting Phones From Orbit

AST SpaceMobile is one of the most capital-intensive bets in the space sector. The Texas company wants to turn low Earth orbit satellites into cell towers that talk to the phone already in your pocket, with no dish and no special handset. It does not plan to sell to consumers itself. Instead it shares revenue with the mobile network operators whose spectrum and customers it uses. This article looks at how that model is financed, who has signed up, what the launch campaign has delivered and what the accounts said at mid-2026. It belongs to the Kurums Space Economy hub, our running guide to the companies and economics of commercial space.

How was AST SpaceMobile founded and first funded?

Abel Avellan founded the company in May 2017 as AST & Science. It raised about $121 million privately, including investments from Vodafone and Rakuten in March 2020, and then agreed in December 2020 to go public by merging with the blank-cheque company New Providence.

CNBC reported at the time that the deal valued the equity at $1.8 billion and included a $230 million private placement led by existing shareholders and joined by UBS O’Connor. Avellan was to keep 43% of the company. The shares trade on Nasdaq under the ticker ASTS.

The original investor presentation is worth rereading as a case study in space forecasting. According to CNBC, the plan was to launch 20 satellites in the second half of 2022 for roughly $510 million, start commercial operations in 2023, reach 44 million subscribers and $1 billion of revenue by 2024, and turn cash-flow positive around 2026. None of those dates held. The first five commercial satellites flew in September 2024, and 2025 was the first year with material revenue, at $70.9 million. What did hold was the strategic logic of bringing mobile operators in as shareholders, which is why the company has been able to keep raising money.

What is the AST SpaceMobile business model?

AST SpaceMobile is a wholesaler. It builds and operates the satellites, mobile operators provide licensed spectrum and customers, and the two sides share the revenue. The company says it has agreements with more than 60 operators that together serve over 3 billion subscribers.

This is a different approach from selling a satellite subscription directly to consumers. The operator adds space coverage as a feature or an add-on to an existing plan, bills the customer, and pays AST SpaceMobile a share. The advantage is distribution: the company does not need a retail brand, stores or a billing system. The cost is dependence. Pricing, marketing and launch timing in each country are largely in the operator’s hands, and most of the 60-plus agreements are not firm purchase commitments.

The commitments that are firm have been growing. The company put aggregate contracted revenue at more than $1.2 billion with its 2025 results and about $1.3 billion in August 2026. The largest disclosed single item is a $175 million commercial prepayment from Saudi operator stc Group under a ten-year regional agreement. In Europe, AST SpaceMobile and Vodafone have a joint venture called SatCo to sell the service to other operators; the company said in 2025 that operators in 21 of the 27 EU member states had expressed interest.

The engineering choice behind the model is size. Each Block 2 BlueBird weighs about six tons and unfolds an antenna array of roughly 2,400 square feet, according to Spaceflight Now. Large arrays are what let a standard phone, with its weak transmitter, close a link to orbit at broadband speeds. They also make each satellite expensive to build and launch, which is the central trade-off in the business.

Who are the strategic investors and partners?

The investor and partner list includes Vodafone, Rakuten, AT&T, Google and Verizon among others. In January 2024 AT&T, Google and Vodafone made a $155 million strategic investment.

Via Satellite reported that the January 2024 package included $110 million of ten-year subordinated convertible notes paying 5.50% with a conversion price of $5.75 per share, a $20 million revenue commitment from AT&T and a $25 million commitment from Vodafone. Google agreed to work on product development and Android integration. For comparison, the convertible notes sold in July 2026 carry a conversion price of $149.20. The gap between those two numbers shows how sharply the market’s view of the company changed in thirty months, and how much cheaper its capital became once satellites were working in orbit.

The US government is also a customer. The company reported a $30 million prime contract from the Space Development Agency, a position on the Missile Defense Agency’s SHIELD contract vehicle, and, on the August 2026 call, three US government contracts with funded near-term value above $100 million expected across 2026 and 2027.

How many satellites has it launched, and what went wrong?

The company reported 13 spacecraft in orbit in August 2026. The test satellite BlueWalker 3 flew in 2022, five Block 1 BlueBirds in September 2024, and seven larger Block 2 satellites have reached orbit since. One Block 2 satellite, BlueBird 7, was lost in April 2026.

BlueBird 7 was placed in a lower orbit than planned by New Glenn’s upper stage and did not have enough altitude to keep operating on its own thrusters, Mobile World Live reported. The company said the loss was covered by insurance. Spaceflight Now cited an estimated carrying value of $155 million to $160 million, and the second-quarter accounts include a $125.9 million loss on involuntary conversion.

The failure pushed the company back onto Falcon 9, which carries three Block 2 satellites at a time; New Glenn was meant to carry more per flight. Management said in August 2026 that it had ten launches booked across two providers, not counting Blue Origin, and was aiming for a launch every one to two months. We covered the business consequences of heavy-lift availability in our article on Starship’s first orbital flight, and the same constraint applies here: a constellation plan is only as fast as its launch supply.

What do the 2026 financials show?

Revenue is rising but is small relative to spending. Second-quarter 2026 revenue was $31.5 million, the net loss attributable to common stockholders was $230.9 million, and capital expenditure in the first half reached $859.2 million. Full-year revenue guidance is $150 million to $200 million.

Total operating expenses were $329.1 million in the quarter, including the BlueBird 7 charge; the company’s adjusted operating expense figure was $119.1 million. The first-half net loss was $421.9 million. For 2025 as a whole, revenue was $70.9 million, of which $54.3 million arrived in the fourth quarter, and the net loss attributable to common stockholders was $341.9 million.

The spending side is where the scale shows. Second-quarter capital expenditure was about $610 million and management forecast $350 million to $425 million for the third quarter. It estimates an average capital cost of $21 million to $23 million per satellite across a constellation of more than 90 satellites, and says its factories can assemble six satellites a month. On those figures, the satellites are not the only cost: launch, gateways and spectrum payments take a large share of the budget.

Guidance of $150 million to $200 million for 2026 depends on government milestones and equipment sales to partners, not on subscriber fees. The company said consumer-focused beta capabilities would begin later in 2026, with timing set jointly with carriers. Advanced Television, which follows the company closely, wrote at the end of August 2026 that beta service looked more likely in spring 2027. Those two readings conflict, and the difference matters for anyone modelling 2027 revenue.

Why is spectrum such a large part of the story?

Direct-to-phone service needs radio spectrum that phones can already use. AST SpaceMobile borrows low-band and mid-band spectrum from its operator partners and has also bought long-term rights of its own, including up to 45 MHz of L-band in the United States and Canada.

The L-band rights come from an agreement approved in the Ligado Networks bankruptcy proceedings, funded by a $550 million non-recourse delayed-draw loan; the company reported a $420 million capital advance toward that spectrum during 2025. It also agreed to acquire priority rights to 60 MHz of global S-band spectrum. Management says its satellites can tune across roughly 1,150 MHz of spectrum worldwide and that it is working toward about 100 MHz of access in the United States, combining operator and company-controlled bands.

Owning spectrum changes the negotiating position. With only borrowed frequencies the company is a subcontractor to each operator. With its own bands it can add capacity on top and, in principle, serve government users independently. Regulation is moving at the same time: the Federal Communications Commission has authorized the company to deploy 248 satellites, according to Spaceflight Now, and separate rule changes are opening other frequencies to satellite-to-phone services, which we explained in our piece on the FCC’s direct-to-device spectrum decision.

How does it compare with Starlink and other operators?

The main competitor is SpaceX, whose Starlink network offers a direct-to-cell service through mobile operators using many smaller satellites. AST SpaceMobile’s counter-argument is that fewer, much larger antennas can deliver broadband speeds to standard phones.

The company says its Block 1 satellites demonstrated nearly 100 Mbps and that Block 2 satellites are designed for peak rates around 200 Mbps. Those are company figures for peak performance, not measured averages on a loaded commercial network. SpaceX has far more satellites, its own rockets and an existing consumer business, which we describe in the Starlink business story. AST SpaceMobile has AT&T and Verizon as partners in the United States, and large operators have a clear interest in keeping more than one supplier alive.

Other satellite operators are taking different positions in the same market. The Eutelsat OneWeb story covers a low Earth orbit network that sells to governments, airlines and telecom companies through terminals, not phones. Data-focused operators such as the one in our Spire Global profile avoid the connectivity capital race altogether. The comparison shows how wide the range of capital intensity is across what is loosely called the satellite sector.

What should you watch between now and early 2027?

Four things: the launch count against the target of about 45 satellites in orbit by early 2027, the start and terms of beta service, whether 2026 revenue lands inside the $150 million to $200 million guidance, and the pace of capital spending.

As of late August 2026, Advanced Television reported that BlueBird 14 was complete and BlueBirds 15 and 16 were close, with a possible October launch window but no announced date or provider. Reaching 45 satellites from 13 implies roughly ten more Falcon-class launches at three satellites each, so every month without a launch makes the early 2027 target harder.

For operators and enterprise buyers, the practical questions are coverage hours and pricing. Continuous service across the continental United States needs far more satellites than are flying today, so early service will be intermittent. For investors, the signal to look for is the first quarter in which service revenue, not equipment or government milestones, drives growth. More deal and market coverage is available in the Kurums space industry news archive.

Frequently Asked Questions

Sources

• AST SpaceMobile, second quarter 2026 business update (SEC 8-K exhibit)
• Nasdaq, AST SpaceMobile Q2 earnings call highlights
• AST SpaceMobile, fourth quarter and full year 2025 results (press release)
• Spaceflight Now, SpaceX launches three Block 2 BlueBird satellites
• Mobile World Live, AST declares satellite lost after Blue Origin launch
• CNBC, AST & Science going public through a SPAC at $1.8 billion valuation
• Via Satellite, AT&T, Google and Vodafone make strategic investment in AST SpaceMobile
• AST SpaceMobile, second quarter 2025 business update (Business Wire)