ASTS Inks Commercial Agreement with stc group: Will it Fuel Revenue?

AST SpaceMobile ASTS is benefiting from a growing client base backed by its robust satellite connectivity portfolio. Recently, the Saudi Telecom Company, known as the stc group, has signed a 10-year commercial agreement with AST SpaceMobile. stc has prepaid $175 million for future services and made a long-term commercial revenue commitment. 

stc group is the first in the region to adopt direct-to-device satellite broadband connectivity. The collaboration aims to deliver seamless 4G and 5G mobile services to businesses, the government sector and consumers across underserved remote regions. ASTS will integrate its space-based cellular broadband connectivity infrastructure with stc’s terrestrial network infrastructure. The partnership intends to provide mobile coverage across Saudi Arabia and some countries in the Middle East and Africa region.

Space-based connectivity infrastructure is gaining prominence worldwide owing to several reasons. Despite the rapid expansion of terrestrial network infrastructure, a significant part of population is still outside of stable network coverage. Geographical obstacles, scattered population and various other factors make network deployment unviable telecom operators. ASTS’ space-based connectivity can address these issues.

Per a report from Grand View Research, the global satellite communication market is projected to witness a compound annual growth rate of 10.2% from 2025 to 2030. With a robust portfolio and strong emphasis on innovation, ASTS has become one of the pioneer in this domain. Major telecom operators such as AT&T, Verizon, Rakuten has formed collaboration with ASTS. Vodafone Idea (Vi), a major network service provider in India is also collaborating with ASTS to bring space-based connectivity to one of the largest and dynamic telecom markets in the world. Now, with its collaboration with stc group, ASTS also gains a first mover advantage in the middle east region.

How Are Competitors Faring?

AST SpaceMobile is facing competition from Viasat, Inc. VSAT and Iridium Communications Inc. IRDM in the satellite communication space. Viasat is ramping up investments in the development of its revolutionary ViaSat-3 broadband communications platform, which will have nearly 10 times the bandwidth capacity of ViaSat-2. The ViaSat-3 platform will help to form a global broadband network with sufficient network capacity to allow better consumer choices with an affordable, high-quality, high-speed Internet and video streaming service. The company is collaborating with BSNL to support satellite communication expansion in India.

Iridium operates one of the largest commercial constellations with a mesh architecture of 66 operational Low-Earth Orbit satellites. The company is actively working developing several services, including Satellite Time and Location, Midband services, Direct-to-Device (D2D) and satellite-based personal communication devices. Iridium is also collaborating with Deutsche Telekom to deliver global connectivity through Iridium’s upcoming NTN Direct service.

ASTS’ Price Performance, Valuation and Estimates

AST SpaceMobile has gained 216.1% over the past year compared with the industry’s growth of 48.6%.

From a valuation standpoint, AST SpaceMobile trades at a forward price-to-sales ratio of 127.17, well above the industry.

The Zacks Consensus Estimate for ASTS’ earnings for 2025 has remain unchanged over the past 60 days.

AST SpaceMobile currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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