AST SpaceMobile - The $6 Billion Spectrum War With SpaceX

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And in return, they got this 800 megahertz spectrum, which is very valuable. In most markets, it's 700 megahertz by seven megahertz of uplink and downlink. And as we've discussed many times, as many of you know, low band spectrum is very valuable. It's the prime real estate out there. It's what gives mobile devices coverage and propagation. So it allows you to use your phone inside your home in the subway. It has the ability to penetrate, you know, it can go through walls in your car. It's much better and it's the lifeblood of the MNOs, right? So low band spectrum is what gives people connectivity anywhere. And then you layer on mid band spectrum for capacity and then high band spectrum for you more capacity. But yeah, so the FCC recently approved the sale of the 800 megahertz spectrum from T-Mobile to grain management. Green management is a private equity firm there in the sole business of making money. And so as part of the FCC approval, this was I think at the end of June, yeah, it was the end of June, before that decision was made, AST space mobile filed a letter in support of the transaction being approved. And there we learned very specifically that AST was working closely with grain management in order to test using their block one and now block two satellites, testing satellite connectivity over that spectrum. And as part of the FCC approval, the grain made it, you know, abundantly made the point that they could deploy that spectrum over AST's constellation. And so it's important to note that AST is the only satellite provider that utilizes low band spectrum cellular anywhere between 600 megahertz to 900 megahertz. And so there's no other satellite providers that do that. SpaceX, their direct-to-cell satellites are focused in the midband. So call it 1.8 gigahertz to his highs, maybe well, the first generation is primarily focused in and around 1.9 gigahertz and some spectrum above and below that. The next generation will actually have the ability to utilize spectrum on a wider basis, I think, I mean, I'm just speculating here, but probably all the way down to 1.8 gigahertz to his highs, maybe 2.5 gigahertz. But, you know, global stars constellation is focused on the L band and S band. Similarly, a radium is on the L band. No one can utilize solid-year spectrum today. Of course, that could change in the future. But so, you know, what prompted this space is this article that came out from Bloomberg and for, let's see here. So in the Bloomberg article, it claims, here's the headline, I'll just go through it. ASX AST said seeking to buy spectrum valued at $6 billion. And so when I saw this headline, it was kind of scratching my head because I didn't think that grain management was looking to sell their spectrum. And so in this article, it claims that both SpaceX and AST are among companies that express interest in acquiring a swath of spectrum held by grain management that's valuable for providing wireless phone services directly from space, according to people familiar with the discussions. Okay. So, and then it talks about how after grain completed a spectrum swath with T-Mobile, that the FCC approved it, but then called for grain. And this is part of the public process that we all know as not as if this article highlighted some type of new news. But there is a public process, and here, let me just pull it up. But it talks about the public process where as part of the FCC approval, that grain would have to, you know, basically fall through what they said. So grain went to the FCC and said, hey, if we buy the spectrum, we want to be able to utilize satellite providers in order to deploy it so that we don't have to build an expensive threshold network. And that network is expensive because you have to hang, you have to go to the tower companies like an American tower, Crown Castle, one of these guys, lease out a tower and then hang the radios on it to deploy your spectrum. And that's really expensive. And so the game changer with this FCC is that they are now allowing for spectrum to be deployed by satellite as the primary, you know, technology to deploy it. And so you can meet a buildup requirement to, you know, deploying the spectrum via satellite. And this is something that Charlie Urgen, you know, back in the day, when he acquired a bunch of AWS three and AWS force spectrum, he had made a commitment to the FCC. I want to build a, a, a threshold broadband network. And as a result of making that commitment, he spent billions and billions of dollars to try to build out a competing network to AT&T Verizon, T-Mobile, and he failed in that endeavor, right? Because it was just really too expensive. And on top of that, he didn't really have that much low band spectrum. I think he had 700 megahertz and in a few markets and, I think, another license. But he, he, he relied on AT&T, I think it was T-Mobile, as an MVNOs to provide him some level of coverage because he didn't have low band spectrum. And so after billions of dollars of failing, that's when, of course, Echo Star, which, Echo Star eventually merged with Dish, got into trouble, and then the FCC said, you guys have not met your build out requirements, so you have to sell it or lose it. And so that's what ultimately happened. He was forced to sell it to SpaceX. So anyway, going back to this article, it says here that, you know, grain is as interested in a party summit, preliminary offers by the first week of September. Some of the people said asking not to be identified because the discussions are private. And so grain hopes to reap about $6 billion from selling the licenses. One of the people said, one of the people. Although the company's plan could also involve leasing capacity, it's also possible another bidder could emerge. So you have to ask yourself, like, why is this article leaking and who, and whose interest is it to leak something like this? And so this is kind of a classic, you know, ploy by bankers and, and sometimes attorneys, but usually it's bankers. So grains, bankers, whoever's working on it, they leaked this to Bloomberg because they want to get the competitive tension up, right? So initially, and based off of what we, everything we saw from regulatory filings and, you know, not only from AST space mobile, but also from grain. I mean, AST is actually out there testing this spectrum. So it's a very public process. And then you've got these bankers from grain. And I'll give you another perspective of who it might be as well. But the bankers from grain are trying to like increase the competitive tension and basically tell AST indirectly through this article, hey, SpaceX is here. And so while we're negotiating this potential agreement, let me just go through the date. So let's see, grain has to select a financial advisor by August 7th. And so clearly they've, they've hired a financial advisor. That person is supposed to, or that firm is supposed to administer the satellite/directed device partner selection process. And on the same date, grain may must also formally initiate a competitive process to broadly solicit bids from prospective satellite operators. So it's now August 20th, so we're kind of in the middle of that. And it sounds like the first. It gives your job posts the boost it needs to be seen and helps reach people with the right skills, certifications, and more. The winners of this show will get a $75 sponsor job credit and indeed.com/podcast. Need a hiring hero? to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online makes sense? There's no place like Chrome. Check responses set up require compatibility and availability varies 18 plus. Round of interest is supposed to be submitted in the first week of September. And I'd say round of interest, right? Because it's not necessarily buying. There's other ways to potentially utilize the spectrum. And so the next date is November 5th, which is what this article refers to. Grain must complete the competitive process and notify the FC of the outcome through the ECFS, which is the FCC filing system. So effectively, this deadline is set so that they have to select a direct-to-device/fatellite partner if they want to deploy a favorable D2D constructor machine. Because if Grain does not utilize a spectrum partner, they have to then go build a terrestrial network, which is going to cost-- if you think six billion is a lot, it's going to cost at least that to deploy the network terrestrial. So it's important to note the here that Grain-- there is a bit of chicken here, because it's not as if they're not going to find a satellite partner. But if they didn't, then they would be on the hook for several billion dollars in multi-years of building out the spectrum. So they can-- I'll part of my French, they can fuck around for a bit to try to increase the competitive tension. But if they end up overplaying their hand, and if AST, for example, and SpaceX don't play ball with these guys, then they could end up with a big shit sandwich, right? Because then they have to actually go build out the threshold network. And that would cost-- Charlie Irgin, I think he'd spent like $8 billion-- he couldn't even get there, right? And so if you like $8 billion, you're going to love $10 billion, whatever the number is. And then by December 4th, the applications-- so once Grain selects a partner, the parties together have to complete and a fully supported satellite application by December 4th. And so in that, it needs to specify everything that they're going to do in order to meet these FCC-specific direct-to-device-specific build out requirements, right? So that's the backdrop. And if you read this article, it talks about-- there's one person that was sourced to saying that Grain wants to potentially sell this spectrum and hopes to reap $6 billion. So they're putting out a number, right? So by the way, like when you are in these processes, all the parties sign, confidential ID agreements, typically Grain wouldn't be able to tell AST. And they shouldn't, right? Their banger should say, oh, there's other parties involved, but you can't really disclose who they are in vice versa. But when you have these leaks, you're able to do it, and then you can claim ignorance. Be like, well, I don't know who leaked that. But it's a way to disclose information and get around legal restrictions, right? And so here, again, they're saying, we're going to take preliminary offers by the first week of September. So that actually is not a public data point. It's actually the whole process is supposed to start on August 7th, and they're supposed to-- they're supposed to select someone by November 5th. So we know when the first round is, right? It's the first week of September. Based off of that, they'll give some feedback to whoever is kind of there. And then there might be another round or some final-- they enter to exclusivity with whoever puts for the best offer. But here, it says, you know, they're throwing a Hail Mary number like, man, if someone pays $6 billion, then they can have it. $6 billion or better. In an ideal world, if you're Graham's advisors, you're like, oh, man, I hope two people bid six, and then we can get a bidding war. And maybe it ends up at 7 or 8. Who knows, right? Someone might blow the brains out. But it also says, hey, we're not necessarily going to sell the spectrum. We're going to potentially lease it, which I think is the ultimate outcome of this. But we can talk about it more. They also say it's possible. Another bidder can emerge, of course they are, because if you're selling your house and you've got two bidders, if you have an aggressive real estate, and you say, well, there's actually a third and fourth bidder here, too. And so you better put your best in final or put your best foot forward. And so that's typically what happens in these processes. But let's see here. Let's see if there's anything else in this article. I mean, there's just a lot of background here. OK, so as I said before, I think this article is probably leaked by grains and visors, because they're trying to get AST to put their best foot forward. And my guess is, if I was in Scott's shoes-- and by the way, we just hired this UBS vice chair as an strategic advisor-- the timing fits, right? And so what I would offer grain is I would offer them a similar deal as legato, right? I would offer them some cash upfront to basically lock in exclusivity with the spectrum. And then it would be on a multi-year long-term lease. And I would offer them some UBS in the business, right? Like maybe you split-- I don't know. I'm just picking up the numbers. Like they get 30% of the revenues generated from it, or 20% or whatever it is, right? And so in that regard, AST doesn't put much cash up front. Grain also rides the risk-- execution risk to a degree, but because it's being deployed by satellite, the buildup requirements, by the way, I think is you need to cover like 70% of 90% of the population within like three years. That should be very doable, right? And so-- and the whole point, again, is for grain, the most cost-effective and efficient way to deploy the spectrum is to utilize the satellite player, right? So if grain-- let's say if they ever played their hand in AST and SpaceX aren't playing ball and whoever else, then grain would be on the hook for multi-billion dollar buildup, terrestrial buildup, which is not fun, right? But here, the grain bankers, they leak this article. They're trying to get part of this could be to get AST to bid up, even though the lawn must just did everybody favor, whether you believe them or not, he just said, no, this is an absolute lie. We're not involved. Which it could-- when he says not true, it could be for parts of the article. Parts of the article might not be true. Or the entire article may not be true, right? So when he says not true, it could be, OK, we're not buying it, but we're definitely interested in using it. And if I was SpaceX, I would absolutely be all over this. And so let's look at it from each of the players' perspectives. So let's talk about SpaceX. First of all, if SpaceX wants to buy the spectrum, they will be able to buy it. They can pay the most. They have an acquisition currency. Their stock is whether-- I mean, just on any measure, it's a richly valued company. And so they can issue stock. They can sell stock and raise cash. They can bid wherever they want, right? Because it's a multi-trillion dollar company. And so if SpaceX wants to buy it, then they can buy it, right? And they're not going to have any regulatory issues in terms of antitrust. But the issue for SpaceX is that there's this pesky build-up requirement, which, by the way, like the FCC printing car, he likes SpaceX. So if they don't get there in terms of coverage, 70% of the 90% of the population in the first three years, they'll probably get a waiver and extend that. However, this commits SpaceX to a different platform, right? So it's not as if the V2 satellites can service this spectrum. They'll have to build another platform, call it V2L for low-band, I guess. And it will have to have a much larger phased array, and they'll have to perfect the ability to-- yeah, I mean, they'll change the architecture. They'll get there, right? It's SpaceX. They'll get there, but can they develop that satellite within a three-year time frame and get it deployed and a full constellation up unclear, right? Because they're focused on-- and this is one of the challenges for SpaceX is that they're focused on deploying the next generation starlink fixed wireless satellites. They're going to deploy the V2 satellites for direct-to-cell. So sorry, V3 for fixed wireless, V2 for direct-to-cell. They're trying to do overly data centers. And then you're going to add a fourth platform, which is the low-band spectrum satellites, right? Which is what AST currently has in orbit now and is deploying. So that's another distraction, right? And that's more tonnage that you got to ship out to space. And eventually, though, I will say that this should be in their roadmap. Is if you're going to compete with wireless carriers, you need to have some low-band spectrum, right? And so whether you do something around grain management, which might. be a good time for you because you have to meet build up requirements. Then you might look to a handful of other potential spectrum plays. But I think for SpaceX, I think it's important to just say upfront, if they want to buy it, they can buy it. There's no, they can outbid pretty much anybody. Now, do they want to blow their brains out on this low-band spectrum? Unclear, right? And it is a different strategy. And there is a, there is a, you know, by locking yourself into this spectrum, it also kind of plays your cards pretty early, meaning that if there was, so, you know, SpaceX has talked out of both sides of the mouth, where on the one hand, they've said, we want to work with them and knows. And we're, I think Brett Johnson, in an interview with one of the banks, he was saying, or it was Maurice, no, as well as Fargo, their research report, he talked about how they, they feel very strongly that they can get an MVNO agreement. And part of the ploy to get an MVNO agreement is that there is a bit of carrot and stick action, right? Like on the one hand, you talk very nice to Team Mobile and maybe Verizon, you say, hey, let's do this. Let's do an MVNO and I promise I won't take your, you know, I won't try to take your customers, but I'll take the other guys' customers and net net, you'll be a beneficiary. But then in the public, the stake is that, hey, if you guys, if the industry doesn't help us, then we're going to compete directly with you, right? And so there's a bit of, you know, talking out both sides of your mouth. If they were to go out and actually buy this spectrum, then that would definitely foreclose the ability to get an MVNO with any of the players, right? Because this is a, the die has been cast, like we are definitely competing against you guys, we're building a competing service, we're getting vertically integrated, we are going to become a full-fledged MNO, right? And so that is something that may not be the, the chest piece they want to play just yet, they might want to wait for a bit, and then perhaps they will, you know, maybe they'll buy ATX or one of these other guys who hold some level with spectrum and go that route. But if they, if they do want to, if there's like an inkling, a possibility of having an MVNO agreement struck with one of these players, doing this, buying grain management, the 800-megarets spectrum, that would foreclose that, right? Because then, then the MNOs are like, oh, they're buying their own low-band spectrum, and so they're definitely not, they're definitely competing with us. So what about ASD? How would they do something here? Well, I think, as I mentioned before, I think the structure would be some cash upfront, and then you would then have an agreement, a leasing agreement for the spectrum for, you know, you pick 50, 70, 80 years, and you offer them some percentage of total revenue generated from it, right? So it could be, I don't know, 20, 30, 40%, I don't know exactly what the economics will work out to be, but it would be more of a licensing deal, right? But if you're grain, you know, that deal comes with more execution risk in a sense of, if SpaceX buys this spectrum from you, they pay you cash, then as long as you get regulatory approval, then you get paid, right? And so, and then you don't have to, you don't care about what happens to SpaceX after that, right? Because you're, they're cash buyer, they pay you, see you later, shake hands, and you're gone. In the ASD case, you are a business partner, and so that is more of a long-term, kind of long-term greedy deal, where there is some execution risk there, but obviously from a technological standpoint, the satellites already exist, the constellations being built, and so that constellation is in the process of being deployed, and so lighting up this additional spectrum is pretty straightforward. However, the risk is that, of course, over time, you know, if, if, if there's no execution, then, then maybe the, the amount of value that you extract from that deal with cash upfront and then ongoing payments, it may not be as attractive, right? But interestingly, of course, if they, you can, you can kind of have your cake in you to, you can do a deal with ASD and see if they pull it off, and if they don't, is not as a spectrum value goes down. It's still going to be very valuable, and you can still ultimately sell it to SpaceX, or one of the MNOs, although that's, that is a very limited path, which I'll talk about. But, but yeah, I think from a value creation perspective, comparing a $6 billion cash upfront, if indeed that's the number of SpaceX we're going to pay for that, versus building a, true business, right? Where the, the network is deployed. You have seven megahertz by seven megahertz. I assume that ASD would sell this, the capacity of this network through the MNOs, and probably it becomes part of the JV. Then you're going to have very steady cash flows over many years, and as a result of that, the value that business could be, I don't know, 10 billion, 12, 13, I mean, depending on how much you generate per year and the valuation multiple that people are willing to put on that, that's where you get kind of a hum run outcome, right? Because it's not, it's not as if grain, it's $6 billion, it'll be an okay return. I don't think it's going to be a massive return, but if you wanted to have a multi-bagger type of return, you're going to want to be part of, and this is what Pride of Equity does, you're going to want, you want to build like a business, right? And so that would be the, the attraction of working with ASD, which is why they are working together as of now. But also, I guess another thing I would say is, from a regulatory standpoint, I mean, this article does help grain out to a degree, because it, it shows the market and it shows the FCC that through this leak, of course, hey, we're actually running a robust process. And so, when they go back to the FCC and say, we've chosen our bidder or whoever it is, they can say, well, we did run a robust process and it was arm's length, and this is who we ended up choosing. But yeah, so for grain, it's a matter of what's more attractive, do you take cash now, and then be done with it, or do you potentially risk it a bit, take a bit of cash, a little, you know, less cash upfront, enter into long-term agreement, and then, but take some risk, but you get upside in the business, right? And so that's the, that's the calculation they're going through. And my guess is that, that number that was put out in the press, I mean, that's kind of a, and by the way, like we saw this similarly where Jay Monroe, Global Star, if you guys remember the early Bloomberg articles, he had talked about a $10 billion dollar number and he was trying to get people to bid up, which ultimately it works, right? It got Amazon to pay up. That's what bankers do. They try to create some type of competitive tension and hope for a great outcome. And sometimes it works and sometimes it backfires. So that's kind of a quick overview. I mean, the other thing I would say is that before Musk kind of poo-pooed it. And again, there's, he may have said not true in regards to specific parts of the article. It may, some parts may actually be true. Or, I mean, there's nothing to keep SpaceX from trying to license this spectrum either. I mean, they don't have to initially buy it out outright. But the other thing to consider is the joint venture, right? So this is the title of the space, JV, going varsity. The joint venture could, so going back in time, like AST has been working with the grain for quarters now, several quarters, right? And so, and it's not as if AST has been doing this behind the backs of AT&T and Verizon, like they're all in the loop on this, right? And so part of the, you know, another way to think about this or another potential outcome is that the joint venture that's being formed by AT&T, Verizon and T-Mobile, that could be a structure that is going to hold spectrum, right? And so when AST talked about potentially, the joint venture opening up a third and fourth player, the fourth player could be a new entity that is, you know, seeded by grain. So grain contributes its 800-megarets spectrum to the JV, AST contributes its satellites, and then by that structure, AT&T, Verizon, T-Mobile could, you know, get service. They could pay for capacity on the 800-megarets spectrum. And by the way, like once this spectrum is not utilized and it's nationwide, and so it's not limited to dead spots or parts where there's just one bar of coverage, right? It's actually, it can overlap with the carriers that work in dense areas too. And so that joint venture could serve as a vessel to deploy the spectrum and for each of the carriers to benefit from it, right? And so that's another way, another wrinkle to think about it. If, you know, if SpaceX were indeed really trying to buy this spectrum and let's say they put forward a bit of 6 billion, now AST, they could counter, and they could try to pay for it, but they're not going to win, right? Like SpaceX, if it comes to a pissing match, they'll win. But what AST could do and you know, if they were bidding on their own, they could, they could offer, I don't know, a billion of cash and then the rest would be stock, right? And, um, and so they could issue that stock to grain management, grain would become a large holder of AST and, and, you know, for AST, owning 800 megahertz nationwide spectrum is very valuable, right? Like that's an asset that's going to increase in value over time. And as we've talked about, um, the, the, the, the consolation, it is, can create spectrum alchemy, right? Because it, you can deploy spectrum very cost effectively, with, with the consolation, unlike, you know, having to build a traditional network. And so that's very valuable. But I don't, if I was in the shoes of a bell in Scott, you know, my guess is they're not looking to buy this spectrum outright. Um, they want to work in partnership, because that's what they do. Um, however, if they did have to counter SpaceX, let's say the carriers wanted, the carriers view this as a competitive threat, and they don't want it to be in SpaceX's hands, and they all, they want to help out AST. But of course, they're not helping AST just because they're nice guys. Like they would be doing that because they're interested in spectrum, and they want to deploy it themselves. Um, the way you could do it is they could fund the JV with several billion dollars each, and AST contributes its satellites, and maybe some cash as well. And then that entity goes and bids for the spectrum, right? If, if it needs to be bought outright. And so that's where, having the financial heft of the three carriers is, would be helpful, right? And so that's why I think, you know, it, but, you know, a JV is messy. Um, it's not as if like that entity could act quickly, and it would be kind of a tough thing to get four different parties to agree to do that. And so it's not the most elegant solution, but, um, yeah. And I think, uh, going back to AST, you know, from their perspective, one thing to consider is that, you know, AST already has L band spectrum through Ligato, um, for them. And this again, this is why I don't think they want to actually own this, but if they were to go out and purchase this spectrum for, I don't know, let's just, let's just say they were able to do it for four or five billion. Um, then they're sitting on a decent, a pretty decent amount of spectrum holdings, right? And then, um, however, through that ownership spectrum, they would be, um, selling services through the MNOs. And so that's a lot of spectrum to sit on where then you have to rely on the MNOs to, to sell capacity on your behalf. And so I'm not sure that something that they want to fully commit to, right? Because, because Ligato spectrum, I mean, it's, it's very valuable and useful. But, um, yeah, I think, I mean, there's, there's a lot of different wrinkles to this, but I think ultimately, um, if you believe in Elon Musk, like, they're not SpaceX isn't really there to buy it, they could, they could license it. My guess is that AST is definitely not going to buy it. Um, they want to enter into some type of relationship. And this is something that's going to benefit grain, right? Because, um, in a licensing agreement, um, remember, grain needs the satellite guys, they need, they need the satellite guys to deploy the spectrum, otherwise they're going to be on the hook for building out the threshold network, which is really expensive. Um, and then from the MNOs perspective, um, they, they will likely, it's in their incentives to keep this out of the hands of SpaceX because they do not want SpaceX to have low band spectrum, although ultimately if they get it, then, you know, it is what it is. You know, seven megahertz by seven megahertz is great for coverage, but it's not enough to compete against the carriers. Um, and so if SpaceX does buy this spectrum, they'll have to go buy other spectrum as well, um, low band spectrum to build some of the robust. Um, but it's a good stepping stone, good start. So anyway, but those are my thoughts. I mean, um, as I said before, I think grain management's bankers have put this out there, uh, they're trying to jump drum up interest. They're trying to create some competitive tension to get the best possible deal. This is what happens in, in the, um, M&A world and, and here, of course, it could be M&A or could just be, you know, some tougher licensing agreement. Um, I think for SpaceX, if they wanted to buy the spectrum, they're going to buy it. Like they can outbid anybody. Um, and they have the currency to do it, to blow the brains out, right? Um, but there's strategic considerations. Can they, can they meet buildout requirements? They have to deploy another satellite, um, another, you know, another architecture and they've, they've, they've, they've pretty much foreclosed the ability to work with AT&T Verizon and T-Mobile. Rails T, um, they, it's likely going to be licensing deal, and then maybe they'll provide some cash upfront, but, um, they're helping grain, meet the buildout requirements. And so, um, for grain, it's, you know, it, from, from their perspective, are they, do they see upside and, uh, a startup, kind of basically a startup startup, uh, Starlink mobile, who's trying to break into the market and how big is that going to be, um, although, I guess, in a cash transaction, they really don't care. They just get the money run, or do they work with AT&T and get some outside of the business where the service is going to be distributed on behalf of AT&T Verizon and T-Mobile. And so, that seems pretty damn attractive. Um, and so, you know, I, I think that's why early on you, you've, you've seen grain work with AST, obviously, because they have the satellites to do so, but, um, I think that's probably where this is heading. And then, finally, for the, for the carriers, um, you know, keeping this out of SpaceX's hands. And I forgot to mention, um, from a enterprise point of view, AT&T cannot buy this spectrum, because they, they run a foul, the spectrum screening rules, because they own too much. Verizon could possibly do it, but they still have the same, same issues. And then, of course, T-Mobile, they just got rid of this spectrum. And so, um, if there's a way to have this spectrum utilized by AST and to build a more robust service that counters, um, SpaceX, um, I think it's probably in the three carriers interest to go down that route. Um, but yeah, there's a lot of different wrinkles here, um, and it's never a dull day. We will, as I mentioned, the deadlines before August 7th, um, you know, we're past that. They have an financial viaget. They start the process. The first week of September, they'll get some indications of interest. Uh, November 5th is by, is when they're supposed to select the party they want to go with and by December 4th, they need to file with the FCC, um, a fully big plan, uh, for approval. Now, um, what they have for intervention is that this, uh, this article out there is kind of fun, because, uh, it says SpaceX and AST, and a lot of people out there are going to be like, who is this AST space, but what is this? Like, why are they competing? How are they competing with SpaceX? Um, and so this is just part of the process of people learning more about this small company out of Midland, um, where they're going to do some digging and find out, oh, there's a really interesting company doing something here. And somehow they're working with AT&T version T and eventually T Mo1, a bunch of other M&Os. And so, um, so this is good for awareness. I, I will say what, what's kind of funny is, um, I think it was, uh, Todd reached out to me and, and I, I was having dinner with the family and he, and he called me and then I saw, and I couldn't answer, but then he, he's, he showed me the headlines and I was like, what? Oh, interesting. And then I went to look on Bloomberg under AST and the article wasn't there. And I told him, there's no article on Bloomberg, but then, um, he shared a, a full article he was able to find. And then, of course, when I looked under SpaceX, the article was there. And so funny enough, when they first published it, they did not tag ASTs ticker. So when you look at Bloomberg, under the ASTs current news, it didn't show up. Of course, now that they revised the story with the quote from Alon, um, now it shows up under AST. So even Bloomberg, the new service who broke this story, um, did not have it filed under AST. So that just showed you like the, the little respect or, uh, even awareness that people have of the company. But, um, but yeah, those, those are my thoughts. Um, let me just take a look and see if people have questions. Let's see. Another Smith, yes, SpaceX wants it. They will have to pony up the cash now. Grain won't lease to SpaceX because Grain would carry the risk of losing the spectrum to the FCC, failing to build out or the cost to build out huge risk. Yes, that's 100% true. So what another Smith is saying here is that if SpaceX wants it, Grain would not want to, they'll probably have to, you know, they'll have to pay for it in cash. So Grain has no risk on the back end. Um, and this is a good point, which I didn't talk about. If, if SpaceX tried to lease it from Grain, the issue is that SpaceX has not developed a satellite that can use this, right? And so it's going to take, I don't know, a year and a half, two years to build a satellite. And then you've got to go launch them on Falcon 9, which they obviously have the performance that you do or of course Starship. And then you've got to have enough coverage to cover 70% of 90% of the population within that timeframe. So that is a big build out risk. And then if they fail to do this, then for, for Grain, they've got to then flip to their threshold plan, right? Which means that they've got to spend billions of dollars to build it out, build out a threshold network. So that, that would be a huge risk. So this is actually, um, good points by another smith, as he always has good points. Let's see, uh, John Cougar, do you think AST would should play chicken until Grain we are walking away? Uh, no, no, I, you would play chicken for AST unless of course like there's real fishy stuff going on but this is just part of the process like this stuff happens leaks happen they try to get people to do things and you know that this is not the first time it's happened right like that I would say for AST you never see articles about the company because they you know they don't leak stuff and their visors don't leak stuff whereas for SpaceX or I guess in this case grain there's always stuff that gets leaked and it's to get people to move one way or another I think again in this instance it's probably grains bankers who link this leak this um the other oh well I guess the other thing could be SpaceX could be taking a look as they as they should right as part of due diligence they should be part of this process and they could be their advisors that leak this too because they're trying to get AST to blow the brains out right but I will say um if you look back at the iridium sale process and also um the global store process um I I didn't think AST was one of the parties but there there could have been one of the parties in iridium might have been AST which I thought I said it was SpaceX originally but I think that could have been AST as well um but in that process uh that that bitter I think it was party A um they bid what they bid and then when the bidding went beyond that they just didn't come back right and so I think my guess is AST this is a nice tab it's not a d tab and so um somewhere to I guess if they were to contemplate iridium it would be an interesting thing to have but not a d tab they're not gonna blow the brains out right um so let's see your shooting when you need to build up your team to handle the growing chaos at work use indeed sponsor jobs it gives your job post the boost it needs to be seen and helps reach people with the right skills certifications and more spend less time searching and more time actually interviewing candidates who check all your boxes listeners of this show will get a $75 sponsor job credit and indeed.com/podcast that's indeed.com/podcast terms and conditions apply need a hiring hero this is a job for indeed sponsor jobs this episode is brought to you by Google Chrome you think you know a browser but Gemini and Chrome that's new it can help you with practically anything on the web like restoring a vintage motorcycle from a 50 page restoration block or finally break down that long article you've had open for weeks Gemini and Chrome is here for it ready to make anything online make sense there's no place like Chrome check responses set up require compatibility and availability very 16 plus looking at other comments here this was likely leaked by grain to increase the value their spectrum as they negotiate deals for its deployment whether with ast or in in an ast legato style deal or with others should be a win-win regardless um yeah so it is kind of funky like as I mentioned before if ast wins it then that's great as long as it's you know it's an economic deal if it's if they overpay for it then that's not great but but I think you know we can trust management and in what they're doing and and by the way when people ask like what was a convert for well clearly this was part of the reason why they raised a convert they they wanted to boost their cash reserves because if they are want to put for a 500 million dollar a billion dollar upfront payment then that would be this would be an easy way to do it the convert right um but yeah I think when you say win-win if SpaceX does buy this spectrum then that just kind of turns up the fire under the immunos under their butts right and it kind of locks in the strategic landscape right where it truly is uh SpaceX becoming a vertically integrated facilities based MNO who is looking to eat everybody else's lunch right and so that increases the strategic importance of AST to the incumbents so that that's positive right um and then yeah I I think but obviously you know from a in terms of quality of service it would be nice to have their phrase to you to have the spectrum but um at up to a certain point right like up to a certain cost but beyond that if they I don't know I'm just making this up you know hypothetically but if if grain was like hey we want you to pay ten billion dollars in cash upfront use it or lose it um if I was AST I'd say you know go pound sand I'm not that's not economic for me I'm done watch them end up doing that but anyway let's see uh Matt Hooper during the earnings call the company said JV opens up a third and fourth customer in the US team mobile was obviously the third but who would the fourth be Xfinity any other crazy speculations on that um what we talked about this before the fourth player could be it could be Comcast it could also be Spectrum right in terms of you know mobile or sorry cable guys there is a smaller fourth potential player MNO called Spire which is a smaller regional MNO that could be the fourth or the fourth player could be grain itself right so grain becomes a um a it it starts its own business and is able to you know it owns a spectrum it gets a part of the then the the upside in the business and then that service is deployed over AST space mobile satellites and then resold through the MNOs right so grain becomes a part of the super wholesaler in the US so that they could become part of the fourth player or be the fourth player let's see dear god and heaven uh so if the bangers leaked it would grain management know that it was being leaked with plausible deniability or would the number 6 billion be a best guess by bangers what can move tell us how the sausages made please thank you uh yeah so the the leak would definitely be something that grain management would know but yes they would also have some possible deniability but this happens this is like this is how processes go where parties you know you're trying to get people to move right so let's say like there's three bitters they don't know who the they don't know who the other bitters are and and sometimes like if you're a sell side banker um you might be telling let's say party A party B party C you might be telling them hey this is the if you want to get to exclusivity uh it's lucid talks you need to bid six billion dollars right and then party A and party B are like you know I think you're full of shit because I don't think anyone else is there nor are they bidding six um and then and then what you might do is you might go to the journal or you might go to Bloomberg and say hey so we're in the middle of the sale process and um there's three parties and you actually name who they are there's there's you know Verizon AT&T and T-Mobile right let's just make it up and T-Mobile is thought to be in the lead with a six billion dollar bid and we're and and the company expects to have final bid submitted and in two weeks and enter into this exclusivity with the winning party right and so that's what you might lead to the journal and so even though you they sign confidential out of agreements and they're not supposed to say who's there um all of a sudden everybody knows with perfect immigration who's there it's like that all of a sudden AT&T and Verizon are saying that T-Mobile's there for six billion and they're like shit you gotta raise our bid like they weren't bullshitting there's actually other parties there and of course like um that you know when the journal the the journalists get that story they try to vet it they try to talk with like a number of other parties to make sure that they don't go out with information that's wrong and sometimes they actually get it wrong because they're fed they're fed BS um but generally speaking like for Bloomberg I'm looking at Kelsey Griffiths I don't know this person I do know Michelle Davis I don't know Rush Me Basu but um generally like reporting from Bloomberg and Wall Street Journal is pretty good but um yeah I mean here it talks about according to people familiar with the discussions people familiar with the discussions typically are advisors when you when it's principles let's say if they actually talk to people at the company it would say people with direct knowledge of the matter or direct knowledge of the matter right whereas this is like people familiar so it's people on the outside or it's bankers or it could be actually you know second hand or third hand so um so yeah I'm pretty certain this is grains bankers that leaked it and it could also be SpaceX as well as they're trying to um they're trying to get AST to pay up or and or I mean another what another reason why SpaceX would help this story is um they're trying to scare the shit out of the MNOS to give them and the MVNO deal they're like hey if you guys don't one of you guys don't give me an MVNO deal then I'm gonna go buy the spectrum and I'm gonna go compete with you guys so that's that's another potential um reason why you do it let's see so I think that's it um yeah those are my thoughts so we'll see how things go again the the I just retweeted the the timeline for grain management and for those people who have been falling very closely it's been expected that AST would work with grain and yes there would be an arms length negotiation and solicitation of other potential players but in terms of the actual technology the business proposition the business model and the potential upside, I think AST has the best to put forward for grain unless, of course, SpaceX comes in and decides to pay all cash with no risk to grain, then there's not much you can do about that. And as I mentioned before, it would be nice, but it's not a need to have. And if SpaceX does that, then that just throws down the gauntlet and the dice cast, right? Like they are full-fledged, definitely competing, like no, no doubts about it. They're competing against the M&O's, and that's a good thing for AST. With that, I'll end it there, and thanks everyone for joining. Bye. Thanks for listening to the AST Space Merva podcast. If you enjoyed this episode, and you'd like to help support the podcast, please share it with others, post about it on social media, or leave a rating and review. To catch all the latest news about AST Space Merva, make sure to subscribe. Thanks again, and I'll see you next time. Kruger, fresh for everyone. Experience a membership that backs what you're building with American Express Business Platinum. 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