Investment and strategic agreements accelerate AST SpaceMobile’s mission to close the global connectivity gap by bringing 5G broadband service from space to billions of people worldwide

$206.5 million financing, comprised of convertible notes, non-dilutive commercial payments, and a planned future draw on the company’s existing credit facility

AST SpaceMobile, the company building the first and only space-based cellular broadband network accessible directly by everyday smartphones, today announced strategic investment from AT&T, Google and Vodafone and aggregate new financing of up to $206.5 million in gross proceeds. In addition to the $155 million strategic investment, the company also plans to draw up to $51.5 million from the company’s existing senior-secured credit facility.

New investors AT&T and Google, joined by existing investor Vodafone, are at the forefront of wireless innovation, with products and services serving billions of people daily. This significant investment in AST SpaceMobile underscores confidence in the company’s technology and leadership position in the emerging space-based cellular direct-to-device market, with the potential to offer connectivity to today’s 5.5 billion cellular devices when they are out of coverage.

AST SpaceMobile currently operates the largest-ever commercial communications array in low Earth orbit, the BlueWalker 3 satellite. The company invented the space-based direct-to-device market, and its patented design facilitates broadband connectivity directly to standard, unmodified cellular devices, adhering to today’s cellular standards. In 2023, the company solidified its status as the industry’s leading innovator, working alongside partners AT&T, Vodafone, Rakuten and Nokia, to achieve multiple historic technical first-evers in space-based cellular communications – including the demonstration of 2G, 4G LTE and 5G calls, and 14 Mbps download speeds per 5 Mhz channels – directly from space to everyday smartphones. For the company’s planned operational satellites, beams are designed to support capacity of up to 40 Mhz, potentially enabling data transmission speeds of up to 120 Mbps. With over 40 agreements and understandings with mobile network operators globally, who collectively service over 2 billion subscribers, AST SpaceMobile’s pioneering in-orbit technology is poised to be the solution for eliminating cellular connectivity gaps around the world.

Abel Avellan, Chairman and CEO of AST SpaceMobile, said, “Our vision at AST SpaceMobile has always been to chart a course of collaborative innovation and integration with the world’s leading wireless companies, which is why we are so thrilled to be welcoming this new strategic investment from AT&T, Google and Vodafone. With this strategic investment, we are gaining capital, invaluable expertise, and strategic partnership. This investment comes alongside prior investments by other leaders in the wireless ecosystem, including Rakuten, American Tower, and Bell Canada, all of whom are not only part owners of AST SpaceMobile but also serve as our technology partners and customers. Each new partnership signifies that market leaders worldwide have tremendous confidence in our vision and ability to ensure that the future of cellular broadband is borderless.”

Chris Sambar, Executive Vice President, Head of Network, AT&T, said “Through our work with AST SpaceMobile, we’ve already proven the possibilities that satellite has to offer in helping connect more people via text, voice and video. We’re excited to deepen our relationship with this investment as we continue to drive a first-of-its-kind innovation forward and work together to achieve this shared vision of space-based connectivity for consumers, businesses and first responders all around the globe.”

Margherita Della Valle, Vodafone Group chief executive, said “Vodafone’s investment and collaboration with AST SpaceMobile will help make our mobile connectivity services available everywhere for our customers across Europe and Africa. Customers in remote rural areas, on land or out at sea, will be able to benefit from fast and reliable 5G broadband directly to their existing smartphones without the need for specialist equipment.”

The strategic investment is intended to support the commercial roll-out of AST SpaceMobile’s network and is comprised of a mix of equity-linked capital and non-dilutive commercial payments. The investment includes:

• $110 million of 10-year subordinated convertible notes with 5.50% interest (which may be paid in kind), with a conversion price of $5.75 per share, a 39% premium to the final trading price on January 16, 2024; invested by AT&T, Google and Vodafone
• $20 million revenue commitment from AT&T, predicated on the launch and successful initial operation of the first 5 commercial satellites
• $25 million minimum revenue commitment from Vodafone, subject to a definitive agreement

The non-dilutive commercial payments by customers of the SpaceMobile network, creditable against future service revenue, provide a model for other wireless companies around the world to participate in the initial rollout of commercial SpaceMobile service.

In addition to the strategic investment, the new investors expanded their strategic and commercial ties to support the buildout of the SpaceMobile network, including:

• Vodafone and AT&T have placed purchase orders for network equipment from AST SpaceMobile to support planned commercial service, for an undisclosed amount
• Google and AST SpaceMobile agreed to collaborate on product development, testing and implementation plans for SpaceMobile network connectivity on Android and related devices

UBS Investment Bank, Barclays and Quilty Space acted as financial advisers to AST SpaceMobile on the strategic investment, with Sullivan & Cromwell LLP serving as legal counsel. The terms and conditions of the transaction are more fully described in the Company’s Current Report on Form 8-K, being filed today with the Securities and Exchange Commission.

AST SpaceMobile has more than 3,100 patent and patent-pending claims for its technology and operates state-of-the-art, vertically integrated manufacturing and testing facilities in Midland, Texas, which collectively span 185,000 square feet.

The company also has agreements and understandings with more than 40 mobile network operators globally, which have over 2 billion existing subscribers total, including Vodafone Group, Rakuten Mobile, AT&T, Bell Canada, Orange, Telefonica, TIM, MTN, Saudi Telecom Company, Zain KSA, Etisalat, Indosat Ooredoo Hutchison, Telkomsel, Smart Communications, Globe Telecom, Millicom, Smartfren, Telecom Argentina, Telstra, Africell, Liberty Latin America and others. Vodafone, Rakuten, American Tower and Bell Canada are also existing investors in AST SpaceMobile.

AST SpaceMobile recently announced the achievement of Space-Based 5G Cellular Broadband Connectivity From Everyday Smartphones. A video memorializing the 5G connection and other testing milestones using BlueWalker 3 can be viewed here .