07.25.25
Posted in AST SpaceMobile, AT&T, Operators, Regulatory, T-Mobile at 8:58 am by timfarrar
It’s been obvious for a long time that the quality of AST’s regulatory submissions has been poor, which has led to considerable delays in gaining FCC approval, as was evident when it took more than four years from the time AST’s initial petition for market access was submitted in April 2020 before approval was granted in August 2024 for launch of five BlueBird-1 satellites. I heard complaints on more than one occasion that more professionalism was needed from AST, with contrasts drawn to the high quality and intense focus of SpaceX’s regulatory team working on SCS. And the company seemed to have acknowledged this concern by hiring Jennifer Manner in May 2025.
But over the last month, AST and its partner AT&T have taken it upon themselves to go to a whole new level in causing annoyance to FCC staff. On July 1, AST “urge[d] the Commission to approve the [FM1] Application by July 11 to allow safe shipment of FM1 for its scheduled August launch on time. Failure to do so will place our ability to launch in August at significant risk.” The irritation of FCC staff was clear in a July 2 email noting that “due to substantial changes in the technical parameters of your S-band request, we will need to coordinate new spot frequencies with NTIA. This will restart the coordination timeline with NTIA”. Nevertheless, the NTIA and FCC pushed this through and granted the FM1 approval on July 11 as requested. But then AST didn’t ship the FM1 satellite the next day, and has now revealed that in fact the satellite won’t be shipped to India until August. So why did the FCC and NTIA have to put in all that work over the July 4 holiday?
AT&T’s actions this week have been even more egregious, with an announcement on July 23 (timed to try and counter T-Mobile’s launch of Starlink D2D satellite service that day) stating that “On Monday, July 21, AT&T and AST SpaceMobile successfully completed the first-ever native voice call (VoLTE) and text (SMS) made directly through AST’s Block 1 satellites with a standard cell phone using AT&T spectrum and passing through the AT&T core network.” But AST’s license for testing with AT&T expired on May 30 and the request for renewal has not yet been granted. So if AT&T did conduct a “call and text [which] utilized AT&T’s spectrum and commercial network” on July 21, that was clearly outside the licensed testing period.
As an aside, it’s also worth noting that AT&T has now pulled back on prior claims that AST will support broadband data services including video calls, modifying the website from the original version to indicate only that “One day [the satellite service] may also support video services”. AT&T also shifted from claiming that “Our customers will have access to a satellite-based cellular network with a standard smartphone – no special device is needed” to indicating that “More information on eligible devices and service requirements will be shared closer to launch”.
One potential reason for the delay in the FCC renewing AST’s applications for continued testing is that AST has also simply ignored the conditions of its test licenses, which required the company to “submit a test report in the ELS license file for this grant within 150 days reporting on activities occurring during the first 90 days of the license”. So for the AT&T testing license granted on January 23 (the grant letter erroneously says 2024 but it was actually granted on January 23, 2025), the initial test report would have been due by no later than June 22. However, to date, no test reports have been filed for any of AST’s BlueBird-1 experimental license grants.
The FCC has been accommodating of AST’s regulatory failings to date, and put the company’s June 2025 modification submission on public notice with regard to the feeder links and TT&C. That might even allow for approval of satellite launches later this year if the recent submission of an SCS agreement with FirstNet is deemed compliant. But before getting to that point, the FCC will also need to decide whether to overlook AST and AT&T’s recent violations of AST’s experimental license conditions.
EDIT (7/25): Well it seems like I ruined somebody’s Friday evening dinner plans, because a few hours after this post was published, AST submitted the delinquent 90 day test report for its experimental testing with AT&T and Verizon. Presumably the other missing test reports for the UK and Turkey will be filed soon as well.
EDIT (7/26): If the FCC was mildly annoyed with AST’s incompetence before, they must now be completely furious after AST submitted a new letter on Friday evening, characterized as a response to the Space Bureau’s request for additional information. And I can only conclude that the company’s engineers are total idiots. This letter completely contradicts itself, with the answer to question 1 stating that FM1-FM23 “will be deorbited from 520km through atmospheric drag” while AST’s “additional clarification” at the end indicates that after FM1 and FM2 (which is now clearly intended to be launched on a dedicated Falcon 9 rocket at huge cost), of the “up to 20 satellites” that AST “anticipates launching…through the end of this year…the remaining 18 satellites will operate at an altitude of 690km”.
And if this “additional clarification” is taken at face value, then the current public notice and comment period has just been invalidated, since the comments received on July 21 were based on AST’s June 12 submission, which claimed that FM1-FM23 would orbit at 520km and that these satellites would only carry 20kg of fuel. I’m left wondering if the paragraph on “planned upcoming satellite launches” was simply inserted by company management at the last minute to try and pump up the share price, and no one checked for compatibility with the rest of the document or AST’s prior submissions.
Of course if FM3-FM23 were at 690km then that’s not compatible with AST’s claim today (in response to question 5) that “The nominal deorbit plan is powered deorbit to below 530km”. And incidentally it also makes no sense for AST to suggest in response to question 4 that “During the disposal phase, the spacecraft will randomly tumble due to its shape and mass distribution throughout its descent, except for collision avoidance maneuvers during which the spacecraft will operate with an edge-on orientation” when AST indicates in question 1 that only “approximately 1kg of Xenon will remain available on FM1-FM23 for collision avoidance maneuvers throughout the mission-life and post-mission phases” since that’s certainly not going to be sufficient to stabilize such a huge spacecraft within a few hours and perform collision avoidance. Is AST instead suggesting that after FM2 it will move straight to launching FM24 and defer FM3-FM23 until later? Or is AST intending to use direct injection to 690km? It’s impossible to tell…
This continues AST’s prior incompetence in engineering submissions that was so evident during the review of FM1, when the company claimed that the mass in the Orbital Debris Assessment Report didn’t add up because of “quantity errors in the input” and “omissions” of various components. Then AST just added in suspiciously round numbers of 5000 fasteners (each weighing exactly 10g) and 100 brackets (each weighing exactly 500g) and still couldn’t make the mass of the phased array on FM1 and FM2 add up to 2863kg (an error of 117kg which has been carried over to the June 12 modification application).
It’s now hard to see how anyone can prepare reply comments based on this new nonsensical AST submission. So unless and until these issues are clarified, I suspect the FCC will either have to extend the reply timeline or even restart the whole process from scratch.
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07.23.25
Posted in Broadband, Operators, Regulatory, Services, SpaceX at 12:12 pm by timfarrar
Last week, the Washington Post published an article about Starlink’s supposed capacity limitations, based on a paper from X-Lab. This is part of the larger fight over the future of BEAD funding and how much should be redirected from fiber to satellite, with a rival ITIF paper suggesting the opposite, that it’s a myth that “LEOs Don’t Belong in BEAD”.
SpaceX has also been lobbying hard on this topic, publishing a network update that notes speeds and latency have both been improving in the US, even with more than 2M active users, and regulatory chief Dave Goldman highlighting his conversations with the FCC, NTIA and others “about how Starlink will make gigabit speeds available to people across the country”. Countering that, several articles have been published suggesting that Starship might never succeed, which would mean SpaceX being unable to launch the larger V3 satellites that the company is “targeting to begin launching…in the first half of 2026″
As one might expect, the lobbyists take an extreme position and the reality is somewhere in the middle: fundamentally there must be some limit to how much it is worth spending on fiber deployment to the most rural and remote locations, when Starlink (and in the future hopefully Kuiper) can provide an high quality, cost-effective residential broadband service. But on the other hand, putting fiber in the ground is a long term investment and it is comparing apples and oranges to equate that to the cost of a Starlink user terminal that the company expects to have a useful life of three years.
The X-Lab paper suggests that Starlink shouldn’t be funded by BEAD in areas where the population density is more than 6.7 Broadband Service Locations (BSLs) per square mile (which corresponds to limiting the addressable market to just over 3M homes around the country). However, when Starlink had waitlists in parts of the US such as the Pacific Northwest in January this year (since replaced by “congestion charges”), these were in regions with an average of about 4-5 customers per square mile, based on Starlink’s estimated US subscriber base in the area deemed “sold out”.
Since not all households would be expected to actually subscribe to internet service, this suggests that Starlink has already seen plenty of demand in areas at or above the proposed 6.7 BSL per square mile density limit, and those customers certainly found it worth paying for, even if the uplink speeds often fell short of the BEAD benchmark. Regardless of when/if Starlink actually gets to orbit, even the current Falcon 9 launch tempo is allowing the capacity of the Starlink service to improve significantly over time, so this proposed cutoff seems too low in limiting where Starlink can usefully provide service.
More to the point, the calculations in the paper simply don’t match the actual constraints on the Starlink service. The assumption is that only one satellite can serve a given cell, but a Starlink user would realize that’s not how it works in practice because if you set up a portable Starlink terminal and take it down each evening, one day you may be told (by the app) to point it say northeast, and the next day you may be told to point it west. That’s because the system is load balancing across the multiple satellites serving a given cell.
At the moment, the primary constraint on the downlink is the FCC’s limit on spectrum re-use (known technically as Nco=1) which means Starlink can only serve a single cell once with a given channel across Starlink’s 2GHz of downlink spectrum (10.7-12.7GHz). While the efficiency of spectrum use varies (for example it’s lower for a Starlink mini than a regular terminal), a reasonable estimate is ~3-4bps/Hz. So 2GHz of spectrum would equate to a maximum of ~7Gbps in a cell, which isn’t too different to the 6Gbps assumed in the paper. However, the FCC has allowed Starlink’s Gen1 and Gen2 satellites to be counted separately for the purposes of the re-use limit, and so the current theoretical maximum downlink speed in a cell is actually twice this level. And now the FCC is consulting on loosening these limits further.
The X-Lab paper focuses more on the uplink capacity as the key density constraint and it is certainly the case that the amount of spectrum available to Starlink is more limited there, because only 500MHz of Ku-band spectrum is allocated to uplink (14.0-14.5GHz) compared to 2GHz for downlink. However, the primary determinant of uplink capacity for Starlink end users is the number of timeslots allocated to uplink transmission, because the network uses Time Division Duplex (TDD) and was originally only configured to support transmission up to 10% of the time. That was intended to ensure that the terminal cannot produce enough radiation to heat up the head of someone standing in front of it (what the FCC refers to as SAR limits). Over time SpaceX has been able to improve this percentage (now 15.5% of the time for uncontrolled use) and professionally installed terminals can go even higher. So there’s no reason to conclude that the supposed 0.4Gbps per beam assumed in the paper is a hard limit.
On the other side of the lobbying effort, the ITIF paper ignores the fact that the BEAD funding mechanisms are extremely poorly suited to fund satellite deployments, as I discussed in this thread on X/Twitter. BEAD has been set up so you bid for money to deploy infrastructure in a particular geographical area, regardless of how many customers actually sign up. That makes sense when funding fiber or even wireless infrastructure: if you build a tower or lay a fiber line, the only way to make a return is to sell service within that coverage area. However, if you fund a satellite operator to build more LEO satellites, then those satellites will spend only a tiny fraction of 1% of the time over that area as they go around the Earth, and can devote 99%+ of the orbit to earning money from more valuable customers. So there is no real incentive for a satellite operator to actually sell service to the unserved customers.
The best way to square this circle would be to provide affordability instead of deployment incentives (i.e. a subsidy for terminals and/or monthly service), so that the satellite operator only earns money when end users in these unserved areas actually sign up, which was how the Affordable Connectivity Program (ACP) was structured. Otherwise the satellite operator is getting paid for something they are already doing: Starlink has over 7000 satellites in orbit already and is launching dozens every week, why pay them to launch a few hundred more? One possibility is to structure reimbursement payments “based on the number of subscribers the provider serves and/or enrolls” rather than “in equal installments throughout the period of performance”.
And when it comes to bidding, why wouldn’t any satellite operator bid a very low amount for the right to deploy service in unserved areas? If they can prevent terrestrial broadband technologies like fiber and wireless from getting subsidies for deployment, then they have a captive market to themselves. Certainly if both Starlink and Kuiper are bidding against one another, and these reimbursements are independent of the number of customers served, it would be logical for their deployment bids to be particularly low, since the cost of simply making service available is essentially zero. We saw in the RDOF auction (when Starlink didn’t face any meaningful competition from other satellite operators) that SpaceX was able to undercut terrestrial technologies, but the fight over whether or not they actually were going to receive their $885M in winning bids, made absolutely no difference to the number of satellites that the company put into orbit.
So in conclusion, satellite has a great opportunity to enhance broadband service in rural areas, potentially in more places than the very lowest density parts of the country. But unless the BEAD payments are linked to the number of customers served, the program will not do a good job of helping consumers realize those benefits.
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07.14.25
Posted in Broadband, Financials, KVH, Maritime, Operators, SpaceX at 4:29 pm by timfarrar
As I told the Wall St Journal last week, the revenue growth reported in the newly filed accounts for Starlink’s international operations is amazing, in the context of a satellite industry that does not grow fast. In fact, Starlink’s near $2B of international broadband service revenues reported in 2024 compares to about $3B for all other satellite operators combined, a roughly 40% market share that has been obtained in only the third full year of Starlink’s operations.
However, that alone represents a warning sign: in order to grow further and faster, Starlink now needs to focus heavily on expanding the market beyond traditional satellite users, not just winning customers from other satellite operators (though of course they will do that too). And terminal prices are already getting lower and lower: Starlink’s consumer terminal revenues in these international markets averaged only about $230 per new terminal manufactured in 2024, so terminal subsidies in 2025 (with 5M terminals manufactured in the last 11 months) may end up being as high as $1B.
These accounts don’t represent the whole of Starlink’s business, they exclude direct US sales to individuals, businesses and the government, which account for more than half of Starlink’s revenues. We’ve just published a note giving a more detailed breakdown of these accounts by customer type and geography, as well as an assessment of the changes to our 100+ page Starlink profile that was published last October. Get in touch if you’re interested in subscribing to our research.
One additional area of interest in Starlink’s financial reporting is the large prepayments that the company has received, which have gone a long way to shoring up its cash position and allowing the company to claim it has $3B of cash on hand (at least before the company handed over $2B of that to xAI). At the end of last year Starlink’s international business had booked over $600M of deferred revenue from one or more counterparties and I’m sure there will be lots of speculation about the source of those payments.
One example of how (much smaller) prepayments work is given by KVH, which as a public company helpfully discloses this information, with enough granularity to allow all of the details to be worked out. We published a profile of KVH last November which discusses all of this, but as shown below, KVH entered into a purchase of 15PB of data for a total of $16.95M in June 2024 (i.e. a price of $1.13 per Gbyte), with the data to be consumed over 15 months (according to KVH’s 2025Q1 call, the “follow-on pool” will be renegotiated “at some point later this year”).
However, according to KVH’s Q1 results, the company is far short of this goal, only having consumed 30% of the total after 9 months, and even being generous in terms of future growth in KVH’s Starlink business, it will likely take until early 2026 for the data pool to be used up. So the question is what will Starlink and KVH do at the end of Q3? Roll the additional data into a new larger pool? Or forfeit perhaps $5M of prepaid capacity?
This highlights one of the challenges for Starlink distributors that commit to prepurchase large amounts of data at an attractive rate. Each time a distributor renews their capacity pool, they may end up more and more dependent on Starlink continuing to supply them with capacity, and less and less able to divert spending to other LEO systems, even if they want to be “network-agnostic.”
And what then for other competing LEO providers who are seeking distributors to sell their services? Which distributors will actually have any spare budget to divert to these other sources of capacity? And what about the risk that Starlink might someday decide not to rollover millions of dollars of unused capacity if a distributor looks elsewhere? That’s likely to add to fears that Starlink will dominate the satellite industry, as I discussed in an NPR podcast a few weeks ago.
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07.07.25
Posted in Financials, SpaceX at 10:27 pm by timfarrar
As we head into summer, attention turns to the question of when SpaceX will launch its next secondary funding round and what valuation will be achieved. Over the last three years we have generally seen press reports in mid to late June, specifically on June 27, 2024, June 23, 2023 and June 13, 2022, which means a summer 2025 announcement is already overdue.
After the sharp jump in valuation to $350B in December 2024, the whisper number was that the next round was aiming for a $500B valuation. But with the political fallout in recent weeks is that still plausible? Is it even possible to raise a multi-billion dollar round for SpaceX right now? Of course there are nonsense valuation models out there, suggesting that SpaceX could be worth $2.5T in 2030, which don’t stand up to a moment’s scrutiny. Even a cursory sanity check would note that the TAM put together by ARK assumes each subscriber would receive 500kbps of provisioned capacity, which doesn’t increase between now and 2040. In reality, Starlink already provisions more than 2Mbps per subscriber today, and that number will need to more than double just to match today’s terrestrial provisioning rates, and then track double digit terrestrial growth rates. And when it comes to the financial modeling, the idea SpaceX will launch over 28,000 Starlink satellites in 2030 and sell all that capacity immediately to grow revenues by more than $80B during that year alone, is simply ludicrous. What is the point of this nonsense other than to convince gullible Musk fans who don’t bother to look at the Excel?
These secondary rounds don’t just serve to provide liquidity to employees, but also provide an important cash float for the company’s operations, due to the difference in timing between when the money comes in and when it’s paid out. It’s no surprise that there’s an equity round each December so that SpaceX can report a large cash balance at the end of each year (and pay down its credit line). That’s why SpaceX needs a very large Asset Backed Line of Credit (ABL), which the company had to increase in size in June 2023 after Elon Musk decreed that there wouldn’t be any more primary equity funding rounds.
The investment by Intesa Sanpaolo in October 2023 was critical in providing billions of dollars of liquidity to the company in the latter part of that year (so that the ABL could be paid down). Then in spring 2024 much of the money was used to buy back several billion dollars of Elon Musk’s SpaceX shares (his economic stake declined from 42.1% to 40.3% and his voting stake from 78.5% to 75.5%), when he needed cash to support a potential refinancing of Twitter. When that refinancing didn’t happen, Musk was able to execute a wash sale to avoid most taxes, by buying Gwynne Shotwell’s shares (and thereby increasing his economic stake from 40.3% to 41.7% and voting stake from 75.% to 79.3%) to persuade her to stay with SpaceX (and reject the Boeing CEO job that Boeing’s board apparently wanted to offer her).
It’s hardly surprising that many in the industry regard SpaceX’s CFO Bret Johnsen as a miracle worker for his ability to keep executing these financial deals and both providing Musk with cash when he needs it, and finding the money for SpaceX to continue investing billions of dollars in Starship plus new Starlink satellites and terminals each year (of course the above referenced nonsense model claims that SpaceX generated $2.6B of free cash flow in 2024 by simply forgetting about huge parts of SpaceX’s business, like Starlink terminals, which consume significant cash and working capital). The question now is whether, despite Musk’s best efforts to annoy the White House, Johnsen can keep the show on the road and execute another equity round at or above last December’s $350B valuation. And if he does, how much of the round will need to come from SpaceX buying back its own shares?
EDIT (7/8/25): Well I didn’t expect the news to break quite that quickly, but SpaceX has revealed that it is hoping for a roughly $400B valuation in the upcoming fundraising round. That number alone shows that the company may be feeling some pressure on valuation, or at least that Johnsen is trying to distance himself from some of Musk’s foolishness, since one might otherwise have expected the mooted valuation to be $420B. What’s even more significant is the suggestion that there will be a primary equity raise, in apparent repudiation of Musk’s April 2023 assertion that SpaceX doesn’t need any more primary equity fundraising rounds, because the company would be able to generate positive cashflows going forward (which was never true, instead SpaceX leaned more heavily on an expanded ABL credit line and then on Intesa Sanpaolo to meet its funding needs in summer and fall 2023).
It will also be interesting to see if more specific information emerges about Starlink revenues, which are now said to account for “more than half of SpaceX’s annual revenue”, because other details, including Starlink’s international accounts, suggest that Starlink’s 2024 revenues (excluding custom satellites, such as those being built for the NRO, which SpaceX doesn’t count in its Starlink revenue figures) were likely in the region of $5.7B, well below some analyst expectations (we published a note for subscribers detailing these previously unpublished Starlink figures last month).
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07.06.25
Posted in Echostar, Financials, Operators, Regulatory, SpaceX, Spectrum at 1:05 pm by timfarrar
After focusing my public posts mainly on Twitter/X threads for the past couple of years, I thought it would be better to resume blogging, especially as it’s got harder and harder to search X posts effectively. I’ve also been publishing numerous research publications, which included a detailed report on the IFC market last summer, an updated profile and revenue forecasts for Starlink in October 2024, and a new report projecting demand for satellite capacity in May 2025 that gives a full breakdown between LEO and GEO out to 2033 across the key professional verticals (maritime, aviation, backhaul, enterprise and government). Unlike some other industry forecasts, we are happy to share full details of our spreadsheets containing the historical base data, forecasting methodology and assumptions. One major satellite operator told us, “your assumptions (especially on the GEO outlook) differ from Novaspace’s, which is a bit more optimistic about the future of GEO (for now). And I tend to agree with your assessment/assumptions.”
And due to increased interest in the sector from investors, and the rapid pace of announcements, particularly in D2D, the research service now includes regular (approximately monthly) updates in response to key developments in the industry and takeaways from industry conferences. These include:
A summary of the WSBW conference (Sep 2024)
A note on the Globalstar-Apple deal (Nov 2024)
A briefing on the Globalstar investor day (Dec 2024)
An update on D2D and Starlink (Jan 2025)
A note on Starlink’s C-band filing (Feb 2025)
A summary of developments at Satellite 2025 (Mar 2025)
A review of AST’s technology (Apr 2025)
An update on EchoStar and the FCC (May 2025)
An update on EchoStar and AST (Jun 2025), and
A briefing giving details of Starlink’s international financials that have never been reported in the press (Jun 2025).
As another subscriber said recently, “Fascinating, as ever. Thanks for your continued bar-settingly-brilliant analysis.”
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