Thread by @steve_larrison

AST SpaceMobile - $ASTS

Analyzing the competition - a thread
Iridium

First, you will notice by the title that I am only tweeting about Iridium in this thread. I will also be writing about Lynk & OmniSpace. But I have quite a bit of information about Iridium compiled for a lengthy thread on Iridium alone. Iridium may become multiple threads
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This thread will cover the following topics:

History of Iridium
Business Model
Phone Selection
Satellites
Constellations
Networks
The Kessler Effect
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History of Iridium

More correctly, this is an abbreviated history of Iridium. A complete history of Iridium isn't the subject of an individual thread, it is the subject of a book.

Here is one example:

amazon.com/dp/B01AGZ8M3A/…

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As most of you may know, Iridium was an idea that originated in the 80s, funded with some $5 billion in the 90s, launched as a service in 1998, and filed for bankruptcy in 1999.

Am I scaring you yet?

Well let's talk a bit more about why the original company flopped so
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quickly right out of the gate.

First of all, it is worth noting that the world was a very different place in the 90s than it is today.

The iPhone was almost a decade away from being introduced.

There were about 300 million cell phones is use worldwide as opposed to around
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an almost 7 billion cell phones in use today.

And Iridium, freshly introduce to the cold, harsh world of business was selling phones that cost around $3,000 a piece, and usage plans that cost $3 to $6 per minute of talk time.

Sounds pretty bad, right?

It's actually worse
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than it sounds

Iridium was spun out of Motorola. Motorola had spent $5 billion developing the technology and launching the satellites that made up the initial constellation.

In return, Iridium agreed to pay $140 million per quarter in perpetuity to Motorola for operations
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and maintenance of the constellation.

With the cost of the handsets and talk time in a world that had less than 5% of the cell phones that we have today, a month after the service was turned on, Iridium had made more money from selling mugs, keychains and t-shirts than
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they made from selling handsets and cellular data services.

The reason I am sharing that brief history with everyone is because it illustrates a key distinction between the Iridium business model and the AST SpaceMobile business model.
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Iridium was pricey from it's inception.

After the assets of the original company were bought in bankruptcy and they were able to shed debt as well as obligations, Iridium still offered a pricey service - at least compared to what AST is planning. (more about that later)
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But let's talk about the business models of Iridium and AST SpaceMobile.

For a refresher on AST SpaceMobile's business model, here is a thread that I wrote on the subject.

https://twitter.com/steve_larrison/status/1424054291396927501

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Now let's talk about the things that Iridium does.

Things Iridium and AST SpaceMobile share in common:
Both companies provide data services from a satellite constellation that they built and operate*

Note: AST is in the process of building their constellation. It is not

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operational yet, and there are technical and operational risks involved in constructing that constellation. Iridium is already operational with their 2nd gen satellite constellation called Iridium Next.

OK - that's it. That's everything the two companies have in common.

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Now for the things that differentiate Iridium from AST (aside from already having a functional satellite data service)

First, Iridium is a full service Mobile Network Operator (MNO). AST SpaceMobile is (or will be) a wholesaler of data services.

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That means that while a SpaceMobile user will just receive a bill from their existing mobile carrier, if you are an Iridium user, Iridium is your mobile carrier.

From an operations perspective, that means that Iridium needs to have more support functions to provide the same
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service.

There is a benefit for some segment of users with having a single company provide services throughout the globe - if you are someone who frequently travels across national boarders, having a relationship with a single carrier is certainly easier than working with
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multiple carriers.

But there ain't no such thing as a free lunch.

Let's talk a little bit about how much lunch is going to cost.

AST SpaceMobile is easy - here is a chart from their investor presentation.

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Now keep in mind that these are revenues that AST expects to receive based on 50/50 revenue sharing agreements with the telcos they provide services to.

So double all of the costs, and you get about $15 a month per user in developed nations, and about $2 a month per user
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in developing nations.

What isn't clear, and something that I am trying to find out is what level of service is provided for those charges?

Is it unlimited talk and data?

Are there caps on talk and data?

I honestly don't know, but would love to find out.
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But when you research the company and read interviews with Abel Avellan, it is clear that one of his driving motivations is to connect the unconnected.

So while I don't know the specifics of how much connectivity is provided by those revenue assumptions, I assume that it
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has to be a useful amount of data.

Now let's take a look at Iridium pricing. But before we do, a disclaimer - I am not being paid for what I write about ASTS. I am doing it on my own, and I have a job as well as other interests.

I have checked out a handful of pricing
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plans for Iridium. I do not know how these plans compare to the entirety of what is available - (I would appreciate it if people reading this linked to more attractive price plans if they are available)

With that out of the way, I was surprised when I started researching
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Iridium price plans.

With that out of the way, there appear to be a few different ways that you can purchase time on the Iridium network.

There are Monthly, Annual, and Pre Paid plans available.

Monthly plans are based on signing up for a 12 month contract, and unused
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minutes roll over to the next month.

Annual plans are much like the monthly plans, but all minutes purchased are placed in a single "bucket" for use throughout the year instead of allocated per month.

Text messages are not included with monthly or annual plans. They cost

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an additional $.20 per text.

Before getting to the prices of the prepaid plans, let's talk about the price of the monthly and annual plans.

Again, I have not exhaustively researched this. Here are links to 3 different sites offering Iridium pricing that I looked up
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this morning. Prices are similar on each site, and they agree with prices I have seen elsewhere in the past while researching AST privately.

If you know of better prices, please share a link!

satellitephonestore.com/catalog/sale/d…

bluecosmo.com/iridium-10-150…

roadpost.com/satellite-phon…
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With every legal disclaimer I can think of out of the way, a monthly plan that will allow you 10 minutes of talk time per month, with rollover minutes, but no free texts costs around $55 a month - depending on where you sign up.

Additional minutes are $1.49.
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Price per minute drops with plans that include more minutes.

A 60 minute a month monthly plan with rollover minutes, but no free text will cost around $70, and a 1,000 minute monthly plan will cost you around $930 per month.
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I have given enough samples of pricing plans to illustrate my point - Iridium is pretty expensive, and because it is expensive, I personally believe that they have priced themselves into niche use cases.

When you look at AST SpaceMobile expected revenues per user,
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it appears to me that AST learned from the mistakes of Iridium's past.

OK, enough about pricing. Lets move on to how you can consume these data services.

First, AST SpaceMobile is being designed to work with every existing cellular phone.

iOS, Android, feature phone.
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It doesn't matter.

They are just a data provider, and the telco customers buying their services will use that data in any way they desire.

Cell phones are an obvious use case.

But if telcos want to use the data for Internet Of Things devices, they can do so.

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cnbc.com/2021/08/19/gm-…
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Telcos can also power tracking devices (think about uses in logistics - tracking items being shipped by truck or rail across the country, things being shipped across the ocean), or really anything that depends on mobile data to work is a possibility.

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Iridium is a full stack MNO. As such, they cover a variety of use cases.

But because that hardware is proprietary, the choice of devices that work with the Iridium network isn't as wide as the what the rest of the market offers.
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Satellite Cell Phones - These aren't the bulky devices you remember from the movies. But they aren't anything like what runs iOS or Android either.

Here are the phone devices from ridium.com/phones

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Here are a selection of phones with prices from one of the Iridium resellers I found

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But Iridium isn't just satellite phones.

They also sell, and provide data services for Personal Communicators, Messengers, and Tracking devices.

If you want to see more details than I care to write about, you can find them at iridium.com/product-type/p…

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Iridium also provide data for what they call "Push to Talk" devices.

When I was a kid, we called these "walkie talkies".

In programs I have worked on in the past, these have been called "tactical radios".

Regardless of what you call it, most people reading this aren't
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part of the intended market.

You can read more at iridium.com/push-to-talk-d…

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Iridium also sells hardware and provides data services for Broad Band terminals. (More about broad band later in this thread)

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And there are a few other products like Antennas that they sell, and products that they provide data services for like mid band terminals.

Will AST enter any of these market places?

Really, the answer to that question can and will vary by the telco that AST is working
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with.

Data is device agnostic. And it wants to be used wherever, whenever and however possible.

But as a wholesaler of data, concerns about the form factor of devices that consume AST SpaceMobile data is outside the direct control of the company.
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So at this point of a competitive analysis, usually I would think that it is time to talk about financials.

But I don't think that it is relevant in this analysis.

First, AST SpaceMobile is pre-revenue. The only things that I can look at are burn rates as the company
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builds and deploys the first phase of it's constellation. (Actually, they are still in the testing phase)

Secondly, I don't think that it makes sense because while both companies operate (or will operate) in the satellite cellular data sector, differences in the
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business models and pricing plans lead me to believe that the market for SpaceMobile should be much broader than the market for Iridium Next.

Iridium is aiming at specialized niches.

AST is aiming at the broad market.
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So let's talk a little about satellites.

On the AST side, I am going to focus on the Blue Bird 1 satellites. It doesn't make sense to examine Blue Walker 3 because it is just a prototype.

On the Iridium side, I am going to focus on the 2nd generation satellites.
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Looking at the 1st gen satellites makes no sense because the 2nd gen constellation has been fully deployed.

Here is a picture of the 2nd gen. Iridium satellite. As you can see, the wing span is about 9.4 meters.

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It's not quite so easy to tell you the size of the SpaceMobile BlueBird 1 satellites as a point of comparison.

First of all, everyone needs to keep in mind that the reason Blue Walker 3 is being launched and put on a mission prior to the build out of the Blue Bird 1
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satellites is because AST needs to test a lot of things. Engineers learn from tests, and make adjustments.

So how big are the BlueBird 1 satellites reported to be?

A year ago, the dimensions were reported to be 30m x 30m.

The Deutsche Bank analyst report says 24mx24m

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The Barclays analyst report says 20mx20m

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Eagle-eyed ASTS researcher and friend CatSE has gone as far as analyzing the video released by the company in July and making scaled projections based on things that are known

reddit.com/r/ASTSpaceMobi…

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What do I think personally?

I believe that no one knows the exact answer because the exact answer is evolving as the company learns more.

I have mentioned before that the thing I am most interested in during the testing process of Blue Walker 3 is the deployment.
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Unfolding the satellite from something that fits inside of the nose cone of the Space X launch vehicle to the final configuration is not a trivial task.

And because of gravity, it is something that is difficult to fully test on earth.

So I have no inside knowledge of
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what the engineers will be monitoring during the testing process, but taking an educated guess here, I would be shocked if I found out that Blue Walker 3 didn't have some sort of sensors monitoring devices used in the unfolding of the satellite so that engineers can
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gain a much more detailed understanding of what happens during the unfolding phase.

I believe that any data from the deployment will have an impact on what the final design looks like.
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So though we aren't certain what the final dimensions of the Blue Bird 1 satellites will be, we are certain that they are much larger than the satellites that Iridium used to build the constellation for Iridium Next.

Some people say size matters.

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Others say that it's not the size, but how you use it

Since we are talking about satellites here, right? It's not just the size, but how you use it

I am going to borrow a tweet from my friend @spacanpanman because it illustrates a point perfectly.

https://twitter.com/spacanpanman/status/1429062888975708167

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AST Satellites are composed of a lot of modular "microns" - think of them as space legos. These microns consist of phased array antennas on one side, and solar cells on the other.

Antenna can work together.

Or they can work independently.
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These phased array antennas working with each other is part of what allows AST to work with existing handsets instead of requiring special hardware, and they can also be joined together to provide greater connectivity speeds.
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There will be more on speed differences between Iridium and SpaceMobile later.

But first, more about the constellation.

For the build out of satellites for Iridium Next, Iridium contracted with Thales Alenia Space and Orbital ATK to build 81 satellites.

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AST will be utilizing NEC to build the microns that make up their satellites, and doing assembly work of the microns into a satellite frame on their own in the facility at Midland, Tx.

Of the 81 2nd generation satellites that Iridium had made for them, 75 are in space, and
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6 are still on the ground.

But of the 75 in space, only 66 are participating in the Iridium Next constellation. The other 9 are in-orbit "spares". (Remember these numbers for when I write about the Kessler Effect later)

Putting up more satellites than you need is wise.
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Though you can build in hardware redundancy that will allow a satellite to operate at a reduced capacity, and while you can take out insurance that protects financially for hardware replacement in the event of catastrophic events, when performance of your network is degraded
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your ability to generate revenue is impacted.

The 9 spares that Iridium has parked in orbit are orbiting the earth at a lower altitude than the active satellites in their constellation.

But if the need arises, the can make maneuvers to send a spare into higher orbit and
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have it participate in the constellation.

And, of course, if they elevate enough of the spares into the active constellation, they still have 9 more satellites on the ground that can be put into space to replenish their spares.

I have mentioned before that of the initial
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20 satellites in phase 1, only 18 are needed to provide service to the equatorial countries.

2 of the 20 are spares.

Similar redundancies are built into the AST constellation as the initial build out to 168 satellites is completed. And as that initial build out grows
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from 168 satellites to 336 satellites.

Also, with the phased array design of the AST satellites, moving satellites to different parts of the constellation can increase the total number of users served in a region, the speed of the network, or both.
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So more about the Iridium constellation.

As mentioned earlier, it is composed of 66 satellites.

These 66 satellites are composed into 6 separate polar orbit paths - each populated by 11 satellites.

Satellite communication is a "line of sight" method of communication.

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Satellites in the Iridium network complete an orbit around the earth every 100 minutes.

Based on their orbital altitude, they are only "in-sight" of a point on the earth for about 7 minutes at any point in time.

In order to provide uninterrupted calling, a satellite
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that is actively handling calls on a region of earth will hand off those calls to the next satellite in line based on which polar orbital path the satellite belongs to.

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ok, I could talk a lot more about constellations here, but I think I might end up losing my audience.

I am also likely to get caught up in details and miss the start of the Cowboys/Texans pre-season game.

So let's jump to networks, and talk about numbers that will mean
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something to everyone.

Earlier in this thread, @ASTSMoon asked me if Iridium provided 5g speeds

Rather than bursting out laughing, I just told him that I would answer that question later in this thread. (I do want people to read what I am writing)

So here are some numbers
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Iridium Next
Voice 2.4 kbps (w MOS3.5)
Circuit switched data 9.46-64 kbps
Iridium OpenPort 128-512 kbps
Iridium OpenPort Aero 128-512 kbps
L-Band high speed: Up to 512 kbps up/ 1.5 mbs down

So it's disclaimer time again.

I am not an Iridium customer and
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I have never used an Iridium product.

So when I see that the L-Band high speed connection can handle up to 1.5 mbs down, I am not positive which products that is available with.

I do know that when I look at products on the Iridium website under the Broadband Terminals
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section of the Products page, I see maximum data rates of 352 kbps up, and 704 kpbs down.

iridium.com/products/intel…

And when I look at the phones on the Iridium website, I see that they all use Iridium Voice Services and Short Burst Data.

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You can read more about Short Burst Data at iridium.com/services/iridi… , but it is really something that is best suited for voice communications.

So the phones are more expensive to buy than the Android or Apple devices you are used to. They cost more to use. And they don't
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have the ability to feed data hungry smart phones.

So what about the SpaceMobile network?

Well remember, it isn't operational yet. To date, AST has one satellite in space (Blue Walker 1) and one satellite on the ground (Blue Walker 2).

Blue Walker 1 is basically a
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glorified cell phone.

In other words, the SpaceMobile network does NOT exist yet.

With all of that out of the way, based on the design of the network, the plan is for SpaceMobile to initially offer 4g speeds in excess of 30 mbps down.

And because of the phased array
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antenna design, those initial 4g speeds will improve to 5g speeds as the constellation grows and more satellites can work with each other in space.

Finally, that brings us to the Kessler effect.

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The short explanation of the Kessler effect is that space junk is a real problem.

Here is a link for a longer explanation of the Kessler effect.

en.wikipedia.org/wiki/Kessler_s…
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There are two reasons I bring up the Kessler effect.

First, Iridium has suffered an in-orbit collision

en.wikipedia.org/wiki/Iridium_s…

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I already mentioned the makeup of satellites in the Iridium Next constellation:

66 active satellites providing service to customers
9 parked spare satellites in a lower orbit that can be maneuvered into service if needed
6 satellites on the ground

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In a recent mini-thread, I wrote the following on how satellite companies prepare for the realities of dealing with space junk.

My reply wasn't based on inside knowledge.

It was based on understanding the industry, and reading a lot of material on the design of the
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constellation AST is building.

That mini-thread can be found here:

https://twitter.com/steve_larrison/status/1428413429513998338

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To prepare for the possibility of a collision with space junk, all satellite companies need to:
1) protect themselves with insurance
2) build redundancy into the system
3) be good space citizens
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On the topic of good space citizenship, when Iridium was in bankruptcy proceedings, there were actually preparations that were being put into place to maneuver the original constellation into the earths atmosphere where they would burn up on re-entry rather than
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leave them as zombie satellites in space.

This is what I am talking about when I say good space citizenship.

I hope that you have enjoyed this thread, and I did warn you at the beginning that it was going to be long.
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This thread is long enough that I felt that it could use a summary/conclusion

Iridium developed radical technology, but it was priced to high to gain wide acceptance. This led to bankruptcy.

Iridium came out of bankruptcy having shed some debt and some legal obligations.
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That restructuring allowed the company to continue to offer satellite cell phone and other data services to this day.

Iridium is a full MNO, whereas AST SpaceMobile is a data provider. Another way of saying that is that Iridium operates a compute phone company.
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AST just focuses on providing the highest value add component to a satellite phone company - the data. (Look at their projected profit margins of 95%+ to understand my value add statement)

The phones that work with Iridium look like phones from the distant past.
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Iridium phones have none of the functionality of a modern smart phone.

AST will work with anything - from feature phones up to the latest smart phones.

In addition to lacking smart phone functionality, Iridium phones are also more expensive than smart phones.
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Data plans are also more expensive for Iridium than they are for AST SpaceMobile.

Despite the added cost for data, the Iridium network is much slower than SpaceMobile.

How much slower depends on what numbers you use.

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The highest reported speed I have seen for Iridium Broadband is 1.5 mbps down.

The lowest speed I have seen reported for SpaceMobile is 30 mbps down.

So not only is SpaceMobile less expensive, it is at least 20 times as fast.

But the phased array antenna design of AST
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satellites will allow greater speeds (and a greater disparity in comparison to Iridium) in the future.
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Finally, Iridium does have an advantage over AST SpaceMobile from being an MNO. Customers of Iridium can use a single plan anywhere in the world with Iridium.

AST SpaceMobile will be regionalized because they are a wholesaler and not an MNO.

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