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Verizon invests US$100 million in AST plan for wireless from space

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VERIZON Communications is investing US$100 million in a partnership with satellite communications company AST SpaceMobile to provide wireless connectivity from space in a challenge to a rival business owned by Elon Musk’s SpaceX.

AST announced a similar partnership with AT&T two weeks ago. Now with both deals in hand, the Midland, Texas-based company said it will be able to provide 100 per cent coverage of the continental US from smartphones to its future planned satellite system, utilising the radio frequencies allotted to the two telecom giants by the Federal Communications Commission.

The partnership marks a rare move for Verizon and AT&T, as the two join forces with the same aerospace company in a bid to challenge SpaceX. Musk’s company announced a similar agreement with T-Mobile US in 2022.

β€œThis partnership will enhance cellular connectivity in the United States, essentially eliminating dead zones and empowering remote areas of the country with space-based connectivity,” Abel Avellan, founder and chief executive officer of AST, said in a statement.

AST is one of a handful of companies trying to use low-orbiting satellites to provide connectivity to regular consumers via smartphones, a market often referred to as β€œdirect-to-cell.”

SpaceX is pursuing the market with its massive Starlink system, which boasts roughly 6,000 satellites in orbit around the Earth. T-Mobile is providing its government-regulated radio frequencies to Starlink for their partnership, and the companies started testing of the service this year on some satellites.

Verizon will provide AST with US$65 million in commercial prepayments, much of it subject to certain conditions. The additional US$35 million will come in the form of convertible notes.

AST has a 693-square-foot satellite, BlueWalker 3, in orbit, after launching it on top of a SpaceX Falcon 9 rocket in 2022. Eventually, the company plans to provide global cellular coverage with a system of 168 satellites in low-Earth orbit. The company plans to ship its first five commercial satellites to Florida this summer for launch. Source: BLOOMBERG

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