AST SpaceMobile gains Verizon ally amid SpaceX’s direct-to-device push

AST SpaceMobile's shares rose over 8% after securing a definitive agreement with Verizon to provide direct-to-device (D2D) connectivity from 2026, following a similar pact with AT&T and a $100 million Verizon investment. This development significantly eased investor concerns about SpaceX's aggressive D2D market entry, despite the lack of exclusivity in the Verizon deal and AST's ongoing need to scale its satellite constellation for continuous coverage. Analysts view the Verizon agreement as a crucial strategic positive for AST, reinforcing its position in the competitive satellite cellular market.

Analysis

TAMPA, Fla. — AST SpaceMobile’s shares closed up more than 8% Oct. 8 after Verizon joined AT&T in signing a definitive agreement to use its planned space-based cellular network, easing investor concerns about SpaceX’s aggressive push into the fledgling direct-to-device (D2D) market. The deal enables Verizon to provide D2D connectivity to its customers from some point in 2026, building on a strategic partnership announced in May 2024 that included plans for a $100 million investment in AST. AST signed a similar definitive revenue-sharing agreement with AT&T earlier that same month. Both carriers plan to contribute spectrum in the 850 megahertz band, which AST’s satellites would pool to directly connect to subscriber phones in the United States where their cell towers can’t reach. The AT&T agreement extends through 2030. Fewer details were disclosed in the Verizon announcement, which also did not mention exclusivity. Currently, Verizon subscribers with certain smartphones can only access basic satellite-powered services through partner Skylo, which connects compatible Android devices to geostationary satellites. iPhone users also have access to Apple’s own emergency messaging feature, supported by Globalstar’s low Earth orbit (LEO) constellation, independent of Verizon. “It is still possible that AT&T and Verizon multisource their satellite partners,” said William Blair analyst Louie DiPalma, though “dual-sourcing would increase complexity.” DiPalma said SpaceX “was likely aggressive in pursuing Verizon, which may have negatively impacted the terms [AST] negotiated.” Even so, he called the pact a “significant positive” for AST, relative to the possibility of Verizon defecting to SpaceX. SpaceX currently provides D2D services in the United States using T-Mobile’s spectrum, restricted to emergency alerts, text messaging and certain apps. However, the company announced plans last month to spend more than $17 billion on satellite spectrum to deliver a 20-fold increase in D2D throughput. AST has also been amassing satellite spectrum to meet its goal of enabling broadband speeds of up to 120 megabits per second. The Texas-based venture recently struck a deal for L-band spectrum in North America, in addition to global S-band frequencies subject to approval on a country-by-country basis. But AST only has five commercial BlueBird satellites in LEO, and needs to deploy 45–60 to provide continuous coverage across the United States and other priority markets. Last week, AST said it was preparing to ship BlueBird 6 on Oct. 12 to India for launch — its first Block 2 satellite. The next-generation spacecraft would span 223 square meters, more than three times the size of a Block 1, which currently has the largest commercial antenna ever deployed in LEO. “BlueBird 7 is expected to ship to the Cape Canaveral launch site in October,” AST continued. “BlueBirds 8-16 are in various stages of production, with launches planned every 1-2 months on average during 2025 and 2026.” The company added that it remains on track to complete 40 phased arrays by early 2026. AST SpaceMobile shares closed up 8.63% to $81.20 Oct. 8, up around 275% for the year to date. Verizon shares slipped 0.19% to close at $41.32. AST SpaceMobile (ASTS) shares surged 8.63% to $81.20 on October 8th, following a definitive agreement for Verizon (VZ) to utilize AST's space-based cellular network from 2026. This pact, which builds on a May 2024 strategic partnership and a $100 million VZ investment, significantly eases prior investor concerns regarding SpaceX's aggressive entry into the direct-to-device (D2D) market. It mirrors an earlier definitive revenue-sharing agreement with AT&T (T), solidifying AST's position with two major U.S. carriers. Both Verizon and AT&T plan to contribute 850 megahertz spectrum, which AST's satellites will pool for D2D connectivity in underserved U.S. areas. William Blair analyst Louie DiPalma noted the Verizon agreement as a "significant positive" for AST, despite potential competitive pressure from SpaceX that may have impacted negotiation terms. SpaceX, which currently offers basic D2D services via T-Mobile, recently announced plans for a $17 billion investment to dramatically increase its D2D throughput. AST is actively scaling its constellation, preparing BlueBird 6 for launch and forecasting launches for BlueBirds 8-16 throughout 2025 and 2026, targeting 40 phased arrays by early 2026. While the company currently operates only five commercial BlueBird satellites, it aims for 45-60 to achieve continuous coverage, with new Block 2 satellites significantly larger than Block 1. This deployment timeline is crucial for realizing the potential of its broadband D2D capabilities up to 120 megabits per second.

Key Decisions for Investors

• Investors should closely monitor AST SpaceMobile's satellite deployment schedule and successful operationalization of its Block 2 satellites, as achieving continuous coverage is critical for revenue realization from the Verizon and AT&T agreements.
• Given the lack of exclusivity in the Verizon deal and SpaceX's aggressive D2D investments, investors should assess the long-term competitive landscape and potential for multi-sourcing by carriers like AT&T and Verizon.
• While the Verizon deal is positive for AST, investors in Verizon should evaluate the strategic and financial implications of this partnership, including spectrum contributions and the 2026 timeline, in the context of their broader D2D strategy.