AST SpaceMobile has raised $1 billion (€0.88bn) in convertible debt to fund “satellite expansion”. But there are serious questions over the company’s plans.

AST’s formal explanation is that the fresh cash is “intended to support growth initiatives, expand the company’s satellite network, and enable potential partnerships or acquisitions, including efforts to vertically integrate launch capabilities and reduce third-party reliance”.

The amount AST will receive is $886.7million (after costs) although there are prospects for a further $150 million if the offer is oversubscribed. The announcement included an admission that a shortage of rocket launch capacity means that the much-promised “late 2026” start of services will slip to 2027.

The central question is how much AST is now having to pay to SpaceX or other rocket launchers to get its satellites into orbit. The problem is the lack of availability of the Jeff Bezos-backed Blue Origin/New Glenn rocket. It will be much later this year before New Glenn returns to launch duties following a test engine firing and massive explosion on May 28th. The initial plan was for New Glenn rockets to launch 45 of AST’s BlueBird satellites this year.

Back on March 2nd Andy Johnson, AST’s EVP and CFO, told analysts that AST was fully funded to manufacture and launch more than 100 satellites. The company was targeting 45–60 Block 2 satellites in orbit by the end of 2026 and had 12 additional launches under contract across several launch vehicles.

There isn’t much information on who those launch providers are. There’s speculation that AST planned to launch three satellites on Falcon 9 rockets and six on each New Glenn, allowing it to approach the upper end of its 45–60-satellite target. Both those expectations are now up in the air. It is clear that Falcon 9’s launches, while in place for the orders already booked, the demand from other clients means there is no spare capacity.

New Glenn is not returning to flight until year end, and perhaps early 2027.

On July 15th, AST announced a revised deployment target. Based on expected launch availability, the company is now targeting ~45 BlueBird satellites in orbit by early 2027. Analysts interpret this as meaning by March 2027.

To reach 45 satellites by the March 2027 analysts assume that New Glenn to return around January 2027 and supporting two originally planned missions during the first quarter. Those two launches would each carry six satellites.

Add in the two remaining ‘booked’ flights on Falcon 9, and representing three satellite per flight. But with a minimum launch demand of 45 satellites to be in place by early 2027, this means a shortfall of 24 satellites, or at least six launches on Falcon 9.

SpaceX’s price list quotes a fee of $74 million per Falcon 9 launch, or a potential $444 million in fees to SpaceX – even if SpaceX can find launch capacity, suggests Market Apostle, a close observer of AST activity.

With around $1 billion coming in from the new debt offering, there’s plenty of cash in AST’s bank account to pay SpaceX’s invoices. But the analysts question where the remaining $400 million might go. AST says:

1. “Pursue an expanding universe of growth initiatives”
2. “Mitigate risks associated with third-party launch providers”

However, AST states in its 8-K filing associated with the cash-raising offer: “The Company currently does not have any understandings or agreements with respect to any such strategic transactions.”

Buying a launch supplier is one possible option but available rocket businesses to buy are rare to non-existent. And would be extremely expensive. Buying extra launches on an India rocket is an option, as are extra launches on the United Launch Alliance’s (ULA) new Vulcan rocket but which currently is fully booked carrying Amazon Leo satellites. One observer said it was possible that AST could buy ULA.

There has also been talk of AST taking a large – and influential – stake in Texas-based Firefly Aerospace and its new Alpha rocket.

No doubt the upcoming weeks will see some answers emerge. AST will deliver its Q2 financial report in early August.

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Categories: Blogs, Inside Satellite

Tags: AST SpaceMobile, New Glenn, satellite