AST SpaceMobile has everything a growth investor dreams of: revolutionary technology, partnerships with AT&T and Vodafone, a $13 billion addressable market, and a stock that's up over 300% in the past year. So why am I sitting this one out?

For those that don’t know, this is a company that went public during the SPAC boom in 2021. At the time, many investors were skeptical about the success of AST SpaceMobile, as there was a lot of competition in the satellite internet race.

Starlink, the space broadband service from SpaceX, is the most popular competitor, but users need a Starlink user terminal to get internet.

Iridium $IRDM ( ▼ 6.8% ) can only provide service through its mobile satellite phones.

Then there are other competitors like OneWeb, Telesat, and Lockheed Martin’s $LMT ( ▼ 0.53% )  partnership with Omnispace. Competition did intensify as $AAPL ( ▼ 3.45% )  invested $1.5 billion into Globalstar $GSAT ( ▼ 7.8% ) to provide emergency texting to iPhones through their satellites. Amazon $AMZN ( ▼ 4.99% ) has their own satellite broadband project called Project Kuiper, but it’s in its infancy.

What makes AST SpaceMobile’s approach different from other satellite broadband carriers is that AST SpaceMobile aims for seamless cellular integration between people’s smartphones and their satellites. Because of this, it’s a no-brainer for telecom providers like Vodafone, AT&T, Orange, AT&T, and more to partner with AST SpaceMobile instead of Starlink or any other competitors.

AST chairman and CEO Abel Avellan had a unique view on SpaceX as he said:

I like Avellan’s mindset, and while he said this in 2021 and it’s underrated how his mindset is why AST Spacemobile is very successful today. Looking at the chart below on the cost of a space flight, we can see that SpaceX has pushed the cost of a space flight lower within a decade.

From costing near $12,800 per kg with Falcon 1 to costing near $1,600 today with Falcon 9, the cost reductions SpaceX has brought to the space and satellite industry are undeniable.

With these cost savings SpaceX has achieved, they’ve also passed those savings to their customers in the form of lower launch costs. As much as we’d like to think that this would help AST SpaceMobile improve its free cash flow, the reality is different. AST SpaceMobile continues to burn more cash annually.

And looking at the free cash flow outlook on a per-quarter basis, Q2’25 was where they burnt the most cash. As much as I want to invest in this company as it grows its business, given the volatility of the macro environment, I don’t feel comfortable investing in a business that’s burning through a lot of cash.

The reason why AST SpaceMobile saw huge cash burn in Q2’25 is that the company procured satellite materials above previous plans ahead of an increasingly volatile tariff environment, and made a $25 million launch payment at the end of Q2 rather than in early Q3. As much as the cash burn is concerning, AST SpaceMobile has $1.5 billion in cash, and management believes they have enough funds to reach the 45 to 60 satellite level needed for continuous service in strategic markets.

Currently, AST SpaceMobile has 6 satellites in orbit. Management noted in the Q2’25 earnings call that they need 25 satellites for positive operational cash flow and 45 to 60 satellites for continuous service in strategic markets around the world. And 90 satellites are needed for continuous global coverage. These cash flow perspectives come from the fact that AST SpaceMobile has 50-50 revenue share agreements with telecom providers.

The Problem AST SpaceMobile is Solving

The bull case for AST SpaceMobile is straightforward: 42% of the world's population lacks cellular broadband, and more than 90% of Earth's surface has no cellular coverage whatsoever. This massive connectivity gap represents both a humanitarian challenge and an enormous commercial opportunity that traditional terrestrial infrastructure cannot economically address.

The reason why many of these areas don’t have cell towers to provide cellular coverage is that the cost of building cell towers in remote or sparsely populated areas often exceeds $150,000 per tower, with ongoing maintenance costs, making these regions commercially unviable for traditional carriers.

By eliminating this infrastructure barrier, AST SpaceMobile enables economic integration of previously isolated communities, potentially lifting millions out of poverty while creating new markets and growth opportunities that could generate trillions of dollars in additional global economic activity over the coming decades.

Is it disrupting cell tower REITs?

Some may look at this and think that AST SpaceMobile is acting as a disruptor to cell tower REITs, which provide cellular broadband coverage to our phones. But in actuality, they complement cell towers. Cell tower REIT American Tower Corp. $AMT ( ▲ 0.73% )  invested in AST SpaceMobile.

Because of technology and physics, for places with high population density, cell towers are needed as they carry higher bandwidth and lower latency. But for all other places, where population density is much less, it would make sense to rely on low-orbit satellites, like what AST SpaceMobile has.

Telecom providers won’t cut ties with cell tower providers because they’ll still need them to provide coverage in heavily populated areas. And with AST SpaceMobile, telecom providers can expand their coverage and acquire more customers.

For cell towers, they can even generate additional revenue by leasing tower space or adjacent space to AST SpaceMobile, where AST can install gateway equipment to help enhance cellular broadband coverage in remote areas.

Plus, it makes no sense to build cell towers in the many places that AST SpaceMobile is aiming to provide cellular broadband service.

Conclusion

While AST SpaceMobile's mission to connect the unconnected is undeniably compelling and its technological approach is brilliant, the company's significant cash burn in an uncertain macro environment keeps me on the sidelines as an admirer rather than an investor — at least until they demonstrate a clearer path to that critical 25-satellite threshold for positive operational cash flow.

For investors getting excited about AST SpaceMobile, while the mission is great, it’s also necessary to research the financials of the company. Many companies have tried to do what AST SpaceMobile is doing back in the 90s, but they eventually ran out of money before giving the world satellite cellular broadband.

Read the tweet below for more context.

Have a great week!

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I am an independent personal finance writer and blogger. I do not have any formal training or certifications in finance, but I have a deep passion for the subject and have been researching and writing about personal finance topics for several years.

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