What happened
Space-based telecom company AST SpaceMobile (ASTS 6.52%) reported progress in commercializing its tech during its most recent quarter. That has investors excited about what is to come, sending shares up as much as 6.6% on Tuesday.
So what
AST is a developmental space company with tech that it says can turn any cellphone into a satellite phone, able to communicate with an AST-owned satellite. It is an expensive, risky proposition, but if it works as intended, it could find a massive market among those with poor terrestrial service today or those who travel frequently.
The company's latest quarterly report disclosed AST's first successful two-way voice call between a satellite and a smartphone. The tests went to plan, demonstrating 4G and even 5G speeds on data links. The company said the tests confirmed no major changes were needed to its block 1 satellite design.
CEO Abel Avellan said:
Completing the first-ever direct voice connection from our BlueWalker 3 test satellite in space to everyday cellular devices in April was hailed by our partners and leaders in the wireless ecosystem as the latest 'first' that changed the way people connect. This accomplishment validated our technology in orbit, and confirmed we have the ability to connect with everyday smartphones from all major handset manufacturers in a market with over 5 billion mobile devices in use today.
Now what
Things are moving in the right direction, but AST still has a lot of hurdles to climb. If all goes to plan, the company hopes to begin launching its first satellites in the first quarter of 2024. It does have a deal with AT&T to offer commercial service in the U.S. but is still a long way out from generating significant revenue.
The company ended the quarter with $185.7 million in cash and said total operating expenses in the quarter were $44.5 million.
The good news is that things seem to be going well for AST, but investors need to be aware this is still at best a speculative investment, where a lot could go wrong.
