AST SpaceMobile Secures FCC Experimental License for U.S. Testing of Space-Based Cellular Broadband Following Planned Launch of BlueWalker 3 Satellite

AST SpaceMobile Secures FCC Experimental License for U.S. Testing of Space-Based Cellular Broadband Following Planned Launch of BlueWalker 3 Satellite

Recently, the FCC granted AST SpaceMobile an experimental license which will allow us to test in the U.S., our space-based cellular broadband access directly to existing mobile phones – without any hardware or software changes – following the planned launch of the BlueWalker 3 test satellite. The license covers BlueWalker 3 space-to-ground testing in the U.S. using 3 GPP low-band cellular frequency and Q/V-band frequencies. The BlueWalker 3 test satellite is scheduled to launch in the summer of 2022. Meanwhile, we’re pursuing additional FCC authorizations and other regulatory authorizations for our planned constellation of BlueBird satellites.

Our long-term goal is to make cellular broadband access available to approximately half of the world’s population with no access today. Here in the U.S., we’re focused on satellite-to-ground connectivity, which will seek to extend broadband service past currently covered zones to what are still “dead zones.” According to Pew Research estimates, 97% of the U.S. population owns some sort of cellphone, 85% of which are smartphones.

Why Broadband Access Isn’t Ubiquitous

There are two main reasons why terrestrial networks don’t cover all geographic areas of the planet: it doesn’t make economic sense to cover sparsely populated areas, and the infrastructure is prohibitively difficult and expensive to build because the terrain in rural areas is too rugged. 

Nevertheless, the world has become digital-first, which disenfranchises people who lack access to telecommunications networks. Satellite coverage can bridge the gaps reliably, but satellite phones have not been practical for consumers due to their high cost and potential network exclusivity, which prevents communication with other networks. That creates an opportunity to enable direct satellite-to-cellphone communication without the need for private, upgraded networks or expensive equipment. Customers would experience sustained connectivity irrespective of their location. Meanwhile, service providers could grow their market share by upgrading existing customers to a ubiquitous coverage plan. They could also attract and serve new customers who lack Internet access and cell service.

Why the time is ripe for direct satellite-to-cellular connections 

The pandemic accelerated the digital transformation of just about everything, deepening the digital divide. The “haves” learned how to work and attend classes from home remotely. They also comforted themselves by shopping more than usual online because they couldn’t eat out, enjoy their favorite forms of entertainment, or didn’t feel comfortable doing so in 2020 and 2021. 

As the world has continued to become more digital, consumers without Internet and cell access have been disadvantaged because traditional analog processes in every industry vertical are being replaced by faster, cheaper digital equivalents, such as a mobile app. However, one cannot bank online without Internet or cell access.

Realizing this, the U.S. wants to accelerate broadband accessibility, as evidenced by the passage of the bipartisan Infrastructure and Jobs Act, the implementation of the FCC’s Rural Digital Opportunity Fund and the upcoming 5G Fund for Rural America, all of which seek to address the digital divide. 

In the meantime, 5G rollouts have been slower than anticipated. The pandemic is one factor, but others include supply chain issues and the cost and complexity of upgrading networks. 

SpaceMobile is innovating towards the future of space-based cellular broadband service

Slowly, but surely, the modern world is transitioning from wired technologies to wireless technologies, which extends to cellphones and how they are charged. In the meantime, consumers have become more mobile than ever, and they expect their favorite applications and phone service to operate ubiquitously, irrespective of network architecture. One way to achieve that goal would be for a carrier to utilize our planned space-based solution. We believe it could be a win for consumers, mobile network operators, and us.

Toward that end, we’ve signed preliminary agreements and understandings with leading mobile network operators around the world, like Vodafone, Telefonica and Orange. Collectively these MNOs serve more than 1.8 billion cellular customers, many of which could benefit from extended coverage. 

These relationships are important because smartphones have become the device of choice for consumers who want to do, find, or buy something and working professionals who want to stay productive regardless of where they are in the world. Over the long term, we’re planning to deploy a constellation of almost 170 satellites. We currently plan to begin launching our commercial satellites during 2023, with substantial global coverage by the end of 2024. Those satellites are being designed to be compatible with 2G, 4G, and 5G phones, none of which would require hardware or software changes. Our goal is to bridge the digital divide and give our mobile network operator customers a new incremental revenue stream.

Forward-Looking Statements

This communication contains “forward-looking statements” that are not historical facts, and involve risks and uncertainties that could cause actual results of AST SpaceMobile to differ materially from those expected and projected. These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “would,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology.

These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside AST SpaceMobile’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (i) expectations regarding AST SpaceMobile’s strategies and future financial performance, including AST’s future business plans or objectives, expected functionality of the SpaceMobile Service, anticipated timing and level of deployment of satellites, anticipated demand and acceptance of mobile satellite services, prospective performance and commercial opportunities and competitors, the timing of obtaining regulatory approvals, ability to finance its research and development activities, commercial partnership acquisition and retention, products and services, pricing, marketing plans, operating expenses, market trends, revenues, liquidity, cash flows and uses of cash, capital expenditures, and AST’s ability to invest in growth initiatives; (ii) the negotiation of definitive agreements with mobile network operators relating to the SpaceMobile service that would supersede preliminary agreements and memoranda of understanding; (iii) the ability of AST SpaceMobile to grow and manage growth profitably and retain its key employees and AST SpaceMobile’s responses to actions of its competitors and its ability to effectively compete; (iv) changes in applicable laws or regulations; (v) the possibility that AST SpaceMobile may be adversely affected by other economic, business, and/or competitive factors; (vi) the outcome of any legal proceedings that may be instituted against AST SpaceMobile; and (vii) other risks and uncertainties indicated in the Company’s filings with the SEC, including those in the Risk Factors section of AST SpaceMobile’s Form 10-K filed with the SEC on March 31, 2022.

AST SpaceMobile cautions that the foregoing list of factors is not exclusive. AST SpaceMobile cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors incorporated by reference into AST SpaceMobile’s Form 10-K filed with the SEC on March 31, 2022. AST SpaceMobile’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov [sec.gov]. Except as expressly required by applicable securities law, AST SpaceMobile disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

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