ASTS Stock Gains On FCC Plan To Expand Direct-To-Phone Spectrum

• The agency also wants to simplify the rules that govern how carriers lease spectrum to satellite operators.
• The changes are still open for public comment and are not final.
• Mainstream telecom carriers had previously warned regulators that opening certain bands to satellite use could hurt the performance of existing 5G networks.

Shares of AST SpaceMobile (ASTS) jumped as much as 6% on Thursday after the Federal Communications Commission advanced a plan to make it easier for satellites to connect directly to ordinary phones.

The FCC adopted a proposal that would expand the amount of spectrum available for “supplemental coverage from space,” a system that lets satellites use wireless carriers’ licensed airwaves to reach customers outside normal tower range. The agency also wants to simplify the rules that govern how carriers lease spectrum to satellite operators. The changes are still open for public comment and are not final.

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AST SpaceMobile is building a network of satellites designed to work hand-in-hand with existing wireless carriers. Rather than competing head-on as a standalone phone service, the company partners with operators such as AT&T (T) and Verizon (VZ). When a customer of those carriers moves outside normal tower coverage, the phone can connect to an AST satellite using the carrier’s own licensed spectrum.

SpaceX’s Starlink satellite internet service, in contrast, is aiming for more independent operations, competing directly with the big carriers. Shares of SpaceX (SPCX) slipped 1% at the time of writing, while shares of Iridium Communications, which also operates in the satellite communications space, edged marginally higher.

Shares of mainstream telecom carrierT-Mobile traded flat at the time of writing, while shares of peers Verizon and AT&T edged up 1%. The carriers already partner with satellite firms for connectivity. At the same time, they have warned regulators that opening certain bands to satellite use could hurt the performance of existing 5G networks.

How Did ASTS Retail Traders React?

On Stocktwits, retail sentiment around ASTS stock stayed within the 'bearish' territory over the past 24 hours, while message volume remained at 'low' levels.

A Stocktwits user said that the FCC proposal opens up a “massive” total addressable market for AST SpaceMobile.

Another user highlighted that despite the company's many setbacks this year, it has “reached a growth stage.”

ASTS stock has dropped 40% year-to-date. 

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