ASTS Chooses Luxembourg as SatCo Headquarters: More Focus on Europe?

AST SpaceMobile, Inc. ASTS has selected Luxembourg as the new headquarters of its joint venture firm SatCo, which is formed in association with Vodafone Group Public Limited Company VOD. Luxembourg is situated in the heart of Western Europe, bordering Belgium, France and Germany. This makes it a key hub for trade and finance, facilitating extensive cross-border economic activity and easy access to major European markets. In addition, Luxembourg’s strong digital credentials make it an ideal spot for AST SpaceMobile and Vodafone to launch SatCo’s wholesale direct-to-device mobile broadband satellite services to leading European mobile network operators under a single turnkey arrangement.

The direct-to-device mobile broadband satellite services will complement the terrestrial networks and provide a secure and resilient digital communications infrastructure to help eliminate dead zones and empower remote areas of the region with space-based connectivity. Although the commercial services of SatCo are expected to commence from 2026, it has generated expressions of interest from network operators in 21 EU member states, as well as in other European markets. AST SpaceMobile and Vodafone aim to forge private and public sector partnerships to position Europe at the forefront of direct-to-mobile space-based broadband connectivity with everyday smartphones.

The Luxembourg headquarters will deploy a small network of earth stations to seamlessly integrate with terrestrial network operators, providing secure backhaul links and an extended coverage across Europe from the AST SpaceMobile satellite constellation in low Earth orbit. This will enable users to switch automatically between space and land-based networks. The joint venture supports European digital sovereignty by creating a unified platform to deliver a cohesive space strategy across the continent, duly supported by the Luxembourg Government, key European policymakers, EU Member States and industry stakeholders.

ASTS Redefines Connectivity With BlueWalker Satellites

ASTS boasts a diverse portfolio of more than 3,650 patent and patent-pending claims worldwide for the direct-to-cell satellite ecosystem from space to Earth. Its SpaceMobile service is compatible with all major brands available in the market and connects directly to everyday mobile phones. It is based on a novel technology that delivers broadband connectivity from space to unmodified mobile devices, providing a service to fill cellular coverage gaps in a differentiated approach compared to other space-based communication services.

AST SpaceMobile's in-orbit BlueWalker 3 satellite has helped it to achieve its mission of creating a space-based cellular broadband network that directly links with mobile devices, eliminating the need for ground-based infrastructure. By expanding its connectivity to remote areas, the company aims to ensure that more people have access to vital communication services.

ASTS Gets Support From Leading U.S. Carriers

AST SpaceMobile has partnered with leading carriers such as AT&T Inc. T and Verizon Communications Inc. to tap into a pre-existing pool of cell customers and avail funds to help build a worldwide satellite network. With AT&T, ASTS has entered into a definitive commercial agreement, extending until 2030, to offer a space-based direct-to-mobile technology that complements and integrates with the former’s mobile network. This approach aims to provide customers with connectivity in locations previously deemed unreachable, enhancing AT&T’s industry leadership in utilizing emerging satellite technologies.

ASTS also collaborated with Verizon, wherein the latter made a $100 million commitment for satellite direct-to-cellular service for its customers. The two back-to-back deals sent ASTS’ stock price soaring. It further enhanced cellular coverage in the United States, essentially eliminating dead zones and empowering remote areas of the country with space-based connectivity.

ASTS Income Statement Bleeds Red

However, unfavorable macroeconomic conditions, including rising inflation, higher interest rates, capital market volatility, tariff imposition and geopolitical conflicts, are negatively impacting the company’s operations. These factors have led to continued fluctuations in satellite material prices, resulting in increased capital costs and pressure on the company’s financial performance.

Owing to high infrastructure set-up costs and research and development expenses for a highly sophisticated technology for developing satellites, AST SpaceMobile has reported losses for the past few years. Management also envisions significant expenditures in the upcoming months for building and launching the next crop of satellites in tune with its expansion plans to serve the full spectrum of U.S. subscribers. This has made ASTS a high-risk investment option.

Estimate Revision Trend of ASTS

The Zacks Consensus Estimate for AST SpaceMobile for 2025 and 2026 has widened 284.6% and 176.9%, respectively, to a loss of $1.00 and a loss of 90 cents per share over the past year. The negative estimate revision depicts pessimism about the stock’s growth potential as investors remain skeptical about the success of its business model.  

Price Performance of ASTS

ASTS has gained a stellar 336% over the past year compared with the industry’s growth of 37.3%. It has also outperformed its peers like Aviat Networks, Inc. AVNW and Comtech Telecommunications Corp. CMTL over this period. While Aviat has declined 13.1%, Comtech has plunged 19.1%.

End Note

The collaboration with leading carriers is seen as a pathway to unlocking the potential of space-based cellular broadband, promising seamless, reliable service across the continental United States. The establishment of Luxembourg as SatCo’s headquarters is expected to transform Europe’s network connectivity and help bridge the digital divide, expanding its global presence and enhancing AST SpaceMobile’s capabilities in providing ubiquitous connectivity.

However, with a Zacks Rank #3 (Hold), AST SpaceMobile appears to be treading in the middle of the road, and new investors could be better off if they trade with caution. The downtrend in estimate revisions further portrays skepticism about the company’s business model. It has also incurred losses over the past couple of years and is not likely to overcome this trend in the near future, given the high infrastructure investments lined up. Consequently, it might not be a prudent investment decision to bet on the stock at the moment. 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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