AST SpaceMobile is struggling to launch BlueWalker 3 once again. Initially, they postponed the launch and shifted it from 2021 to 2022. Due to unforeseen circumstances, there is another delay for month or two. AST now plans to launch its satellites between 2022 and 2023. Considering the company’s past, another delay would not be surprising. Meanwhile, the question in investors’ minds is whether or not the project will be a success.
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What for the project is AST SpaceMobile?
AST SpaceMobile is aiming for a resounding breakthrough in space technology. It has ambitions to construct a constellation of low orbit satellites. These satellites will provide a cellular broadband network based in space. The network is expected to be accessible from regular phones. The company aims to use space technology as a stepping stone to combining technologies and providing the best customer service.
Initially, AST was pouring its investment into NanoAvionics, but its focus has since shifted. AST has made a dramatic shift from nanosats to humungous satellites. The move seems at odds with prior AST’s steps, as NanoAvionics has negligible experience when it comes to large satellites, which are AST’s new focus. So, the small sat developer might prove to be a dead weight that AST might want to cut off and an ill-founded investment.
High technological risks and questionable market value of the project
AST’s ambitious plans are quite admirable but risky, especially if we consider that they have minimal experience with large satellites. It is unclear if the SpaceMobile constellation can work on a large scale. The launch itself is in question. And competition is also immense. Let’s take a closer look.
There have been some questions surrounding the preparedness of AST. NASA and Tech Freedom raised more concern after AST requested FCC to control the SpaceMobile satellite constellation with the constellation being at an altitude of 720km above sea level. This arrangement has caused some unrest because there is already another satellite group doing projects for NASA and the USGS. And with all the debris in orbit, most of it comprising dysfunctional satellites floating around, every space exploration project has risks of a collision, but in the case of AST SpaceMobile, the risks go up.
The sizes of the satellites are an impactful factor in this. AST has negligible experience when it comes to launching large satellites and operating complex, heavy-duty vehicles. At the same time, NASA is becoming increasingly focused on safety. Safety awareness is a necessary part of space exploration, but AST might not keep up with the requirements. TipRanks has also highlighted the financial and corporate risks faced by AST, and those are above the sector average.
The company’s plans
AST has plans to launch its first-ever satellites between 2022 and 2023. The commercial satellites are an ambitious endeavor expected to bridge 49 countries with 20 satellites. The time constraints have led to questions, though. Investors and other players in the field are asking if AST will be able to see its plans through and implement such a large constellation in so little time.
The BlueWalker 3 is expected to be launched using an experimental permit, but the whole project is still hanging on the brink of uncertainty. It has been arranged that AST’s test satellite was to be launched together with a commercial Soyuz vehicle, but the launch of the test satellite was inevitably delayed. After the multiple delays, AST decided to focus on a SpaceX Falcon 9 ride-share and put its plans to launch the BlueWalker 3 on the back burner.
Despite the setbacks, AST still has plans to construct 214 low-earth orbiting satellites, which will be across 16 orbital planes at an altitude of 700km. Papua New Guinea took the necessary steps and issued a license to AST so it could operate as a satellite system, but Tech Freedom is questioning this decision. Papua New Guinea’s government budget is less than $6 billion, so how will it handle the responsibility of AST’s licensing when the planned orbit is expected to use up more than $10 billion?
Final Word
The odds of AST successfully launching its satellite constellation are very low. There is shallow investor confidence, and all the risks combined have been making AST shares volatile. If AST continues on the same path, their shares will eventually be worth almost nothing. Investment is always about taking a risk, but in the case of AST, investing might equal flushing your money down the drain.