SpaceX FCC license negative for AST SpaceMobile, says Scotiabank

Scotiabank views the Federal Communications Commission granting SpaceX a supplemental coverage from space license before AST SpaceMobile (ASTS) as a negative for AST. The development erodes the possibility of AST having a first-mover advantage, “but it doesn’t catch the company off guard,” the analyst tells investors in a research note. Even when the FCC is requiring SpaceX to comply with the out-of-band emissions limits, granting SpaceX the license is likely to cause legal turmoil, contends the firm. It believes that supposing a judge doesn’t stop the ruling, a possible scenario is that T-Mobile (TMUS) will launch some sort of sub-optimal text service while it finds a solution to design issues. The firm says that with the five Bluebirds now in orbit, AT&T (T) and Verizon (VZ) can launch beta testing with real 4G/5G data capabilities “that could lead to SpaceX’s service backfiring.” It expects AST’s support from mobile network operators to remain firm, but says AST bears may question average revenue per user projections given that, initially, SpaceX’s text service could be offered for free to T-Mobile (TMUS) subscribers. Scotiabank has an Outperform rating on AST SpaceMobile with a $44.70 price target