US Exemption for SpaceX Drops AST SpaceMobile Shares by 6.13%
The US regulator exempted SpaceX from the spectrum leasing requirement, authorizing the construction of 15,000 satellites for direct-to-cell communication, and AST SpaceMobile shares fell 6.13% to $56.93.
The US Federal Communications Commission (FCC) authorized SpaceX to build a satellite constellation connecting ordinary phones directly to the network via spectrum already owned by the company, exempting it from the rule requiring a spectrum leasing arrangement with a terrestrial operator.
The constellation includes 15,000 satellites, while the commission's order dates back to October 6, and the market movement occurred on October 8.
AST SpaceMobile shares dropped at the close to $56.93, a loss of $3.72 or 6.13%, marking the largest decline among space sector stocks during the October 8 session. Data from Nasdaq and CNBC confirmed the same closing price.
The pressure on the company comes because its business model relies on wireless carrier partners, a requirement the commission waived for its competitor. This development is relevant to space sector investors as it redraws competition in the direct-to-cell market.
What do these terms mean?
Frequency Spectrum: A range of radio waves used by wireless networks and licensed by the government to operators.
Spectrum Leasing: An agreement granting a satellite operator the right to use spectrum owned by a terrestrial network operator in exchange for financial consideration.
Constellation: A large group of satellites operating together to cover an area or provide a single integrated service.
Direct-to-Cell Communication: A technology that connects ordinary phones directly to satellites without the need for an intermediate ground station.
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