AST SpaceMobile (NASDAQ:ASTS) Q1 2022 Earnings Call

0:00 Good day and thank you for standing by. Welcome to the AST SpaceMobile first quarter 2022 business update call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Scott Wisniewski, Chief Strategy Officer of AST SpaceMobile. Please go ahead. Thank you and good afternoon, everyone. Let me refer you to slide two of the presentation, which contains our safe harbor disclaimer. During today's call, we may make certain forward-looking statements. These statements are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual events to differ materially from the forward-looking statements on this call. For more information about these risks and uncertainties, please refer to the Risk Factors section of ASD SpaceMobile's Annual Report on Form 10-K for the year that ended December 31, 2021.

0:53 with the Securities and Exchange Commission and other documents filed by ASD SpaceMobile with the SEC from time to time. Readers are cautioned not to put undue reliance on forward-looking statements, and the company specifically disclaims any obligation to update the forward-looking statements that may be discussed on this call. Also, after our initial remarks, we will be starting our Q&A section with questions submitted in advance by our shareholders. With that, I would like to introduce Chairman and CEO, Abel Avellan, and our new Chief Financial Officer, Sean Wallace, to the call as well. Abel, over to you. Thank you, Scott. For those of you who may be new to our company, I want to take a few minutes to explain our mission and what is actually what we're doing.

1:39 ST SpaceMobile is building the first and only Global cellular broadband network in space to operate directly with standard unmodified mobile devices based on our extensive IP and patent portfolio. Our engineers and space scientists are on a mission to eliminate the connectivity gaps faced by today's 5 billion mobile subscribers and finally bring broadband to the billions who remain unconnected. We believe this to be a very large opportunity and allowed us to participate in the one trillion annual wireless service market. While it has been only a short six weeks since our last public update, we have made strong progress and I would like to take you through that now.

2:30 Turning to slide four, technology and industrialization update. We are on target for our planned Blue Walker III summer launch. In preparation for this milestone, we have completed over 700 Blue Walker III tests to date. Once in orbit, we are expected to test cellular broadband globally with participating cellular operators in the U.S., Japan, Europe, Africa, South America, and Asia. This effort will be supported by ground control centers in Maryland, Colorado, and Australia that are being ready to support Blue Walker III post-launch operations. We're also putting in place ground stations and approvals to support the planned Blue Walker III summer launch, including the FCC experimental license, which was recently granted by the FCC.

3:23 We are on target for the completion during 2022 of our Extension Production Facility in Texas to support our target of up to six satellites per month. We had increased to more than 2,300 patent and patent pending claims supporting a strong and expanding competitive advantage. Turning to slide five, business update. We have successfully added a new MOU with Globe Telecom, an operator in Philippines with 86.8 million subscribers. We then, we have now more than 1.8 billion subscribers represented by mobile network operators with whom we have agreements and MOUs.

4:12 We recently received an FCC experimental license for Blue Walker 3, space to ground testing in the United States, using 3GPP low band cellular spectrum and QRB band frequencies. And also recently we had added a 75 million committed equity facility with B Rally that provides AST with the right but not the obligation to raise equity capital over the next 24 months. Before I hand it off, I wanted to thank our retiring CFO, Tom Severson, for all his time and effort building SpaceMobile over the last five years. We have worked over the last six months to find the best partner for the next phase of growth to the company. And I'm now happy to introduce Sean Wallace, our incoming Chief Financial Officer.

5:06 He brings to the team deep telecom financial and capital market experience to be added to the team to support our future growth. With that, let me transfer to Sean. Thanks, Abel. Sorry about that. Good afternoon, everyone. And I wanted to share my excitement about joining the AST team. As an experienced telecom CFO and banker, the work I did to understand the AST story continually led me to conclude that this project, given its global ambitions, has the potential of making a large and profound impact on the world's connectivity ecosystem by solving what is probably the most critical problem facing the mobile industry today, providing global cellular broadband coverage directly to standard, unmodified mobile phones.

6:18 In support of this ambitious plan, I met a strong and innovative management team that has attracted a deep bench of talent. I was comforted by the significant strategic sponsorship of leading telecom companies such as Vodafone, American Tower, and Rakuten. I was impressed by how quickly this team has developed relationships with leading MNOs across the globe that have more than 1.8 billion subscribers in total and as we have discussed today on this call, I have to congratulate the team on its continued progress towards meeting important milestones which indicates a strong execution capability. I want to provide an update on a series of activities that the company has been focused on and highlight some of the liquidity and financial metrics for the first quarter.

7:12 As we have stated before, a key innovation proposed by AST is the development of an industrialized procurement and manufacturing process for our planned satellite fleet. Historically, satellites have been manufactured one at a time in job shop facilities. AST is developing a state of the art assembly line process designed to enable AST to scale the procurement of parts, lower assembly costs, and materially speed up the volume of production. These efforts are expected to enable AST to lower the cost of its satellites and enable the company to meet its goal of ultimately building up to six satellites per month. As part of this goal, I would like to highlight some of the activities the team has accomplished during the first quarter.

8:00 First, AST has made progress in reconfiguring its new Texas AIT facility designed to house the satellite assembly and test line. The company has retrofitted and remodeled the facility built a clean room for critical assembly processes, and the facility is now ready to house and support inventory for manufacturing as well as the assembly and testing line. Our efforts to integrate an ERP system to support our inventory management and manufacturing process continues apace, and we believe that the entire system will go live during the second half of this year. Just as importantly, we continue to hire experienced leadership and make human capital investments across all functions and offices.

8:46 Let me discuss some of the highlights regarding our liquidity and expenditures. We ended the first quarter with $255.1 million in cash. We believe this cash is sufficient to support our cash expenditures for more than the next 12 months. As you saw from our recent announcement regarding our B. Reilly Committed Equity Facility, we continue to evaluate a variety of capital raising efforts to extend the runway of our liquidity. We are focused on exploring a wide range of options and remain confident that we have a broad set of funding opportunities. For the first quarter, we had GAAP operating expenses of 32.7 million versus 31.3 million in the fourth quarter of 2021, including non-cash operating expenses of 3.4 million and 2.7 million, respectively.

9:39 We expect to continue to expand that level for the next several quarters. The $1.4 million increase in costs during the first quarter was related to increased employee costs and other research and development and engineering expenses as we ramp up the development and infrastructure investments to support the Bluebird One program. For the first quarter, we made capital expenditures of $21.6 million, which includes a payment to SpaceX for Blue Walker 3 technical adjustments in connection with the previously disclosed and the SpaceX Multi-Launch Services Agreement. As mentioned earlier, we have substantially completed assembly and testing for Blue Walker 3 and are turning our investments towards the production of our Blue Bird satellites. And with that, I'll turn it back to Scott.

10:28 Thanks, Sean. Before we go to the queue of analyst questions, we'd like to address a few of the questions submitted ahead of the call by our investors. Operator, could you please start us off with the first question? Thank you. Brian from Toronto asks, when will you know definitively that the technology actually works from space? Thank you, Brian, for the question. After we launch, we expect to, within a week, within an hour or two, to know if we were successful launch and put into the orbit that we are expecting. After that, we will wait for the right timing to basically deploy the satellite, which is basically open the satellite into its final configuration. That will be within a week or two after the launch.

11:25 That's obviously a major phase, and it's something that we will know within a week or two of the launch. After that, we go through a six-month process of testing with the operators. We have selected locations around the globe in the U.S., Europe, Africa, South America, and Asia, including Japan. We'll be doing testing with the selected telecom partners. Thank you. Christopher from Florida asks, If BW3 fails, will BB1 serve as the next test satellite to continue optimizing the new system?

12:13 If not, then how long would you expect it to take to build and launch another test satellite? Thank you, Chris, for the question. Well, first of all, we have built redundancy into Blue Walker 3 satellite across many of its systems, and we have conducted extensive testing to position the spacecraft to success in orbit. Our Blue Bear program has been advancing alongside the build and test of Blue Walker 3. We anticipate that our next launch after Blue Walker 3 will be a Blue Bear satellite incorporating the many lessons and advancements that we learned during the build of Blue Walker 3. Our plan is that our production satellite phase will continue to advance with the launch of Blue Bear satellites as currently planned.

13:04 Even in the event of any complication with Blue Walker III, which we don't anticipate, but the next satellite will be a Blue Walker III followed by a BB-1. Thank you. Rick from the Netherlands asks, what is the desired situation to exercise the financing option? Is there a minimum stock price to exercise the deal? Can you elaborate more about the deal's terms? Bell, why don't I take this? Yes, go ahead. Thanks. The agreement with B. Reilly provides us with access of up to $75 million of additional liquidity through a committed equity facility.

13:49 It's accessible over 24 months. It gives us the right, but not the obligation, to sell and issue shares of our Class A common stock to B. Reilly at a 3% discount to what's known as the volume-weighted average trading price for the performance measurement period. This is a tried and true and extremely efficient way of raising incremental capital, and it's really in function with our line of maintaining regular and diverse access to various capital markets while preserving our existing cash for building our Bluebird production satellites. It's highly flexible, but I also, as I said earlier, we will continue to look at a variety of sources of capital Thank you. Terry from Georgia asks, do you have any plans to potentially transport multiple Bluebird satellites on a single launch?

15:05 Yeah, we have carefully planned our launch strategy together with the development of our satellites. For us, it's critical to be able to launch multiple satellites on a single launch. We have done so based on multiple launch vehicles in order to be launch agnostic. which allowed us to have access to multiple providers in order to give us flexibility. We ramp up production. We expect that we will be using large launch vehicles that can support multiple Bluebird satellites. We are very encouraged by the many large launch vehicles that are coming into service from SpaceX and other and other launch providers.

16:04 Thank you. Steve from Arizona asks, supply chain problems have been creating havoc since the pandemic began. How resilient is your supply chain? How many critical components have only a single vendor available? Have you been stockpiling these components? Yeah, well, supply chain is obviously something very important. We are actively engaged with third party vendors to secure our supply components and materials for Blue Walker satellites. We had agreements for all the major subsystems for the constellations. We have and will continue to invest in all the long lead items that we require for the system. We have also mitigated the risk of supply chains by using FPGAs and systems that are configurable and available now.

17:02 We feel that we can continue to execute on our plan despite any potential supply chain issues. Thank you. Steve from Arizona asks, are neon gas shortages caused by the Russian invasion of the Ukraine causing any concerns about semiconductor availability needed for the Bluebird builds? Yes, I have said before we're basing our satellites based on an FPGA, which are basically configurable and flexible. So we are not exposed to potential market shortage of semiconductors. The later Bluebird ones, which were developed in our own chips, will be based on using TSNC technology for our ASICs. So the first Bluebird ones will be based on SPGA.

17:55 The second will be based on our own ASIC, which is part of our own development. Great. And with that, I'd like to thank our shareholders for submitting these questions. Operator, let's open the call to analyst questions now. As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. Our first question comes from Brian Kraft with Deutsche Bank. You may proceed. Hi, good afternoon. I had a few. I guess first, in light of the deal with B. Reilly, can you talk about the relative attractiveness of issuing equity versus the other capital raising alternatives you have? and how you're thinking about the timing for raising capital given the rising rate environment.

18:44 And then I guess a little bit separately, if you could share any additional specificity around timing for the BlueWalker 3 launch. I know you said this summer. I was wondering if you could narrow that at all. And then finally, what does the timing look like at this point for the Bluebird commercial satellite launches? Thank you. Thanks, Brian. Do you want to take that? Go ahead, Scott. Brian, I guess I'll take the first question on the use of equity and the use of equity versus other capital. I think for us, as we said, we have a diverse set of available sources of capital, and I think at this stage, we're eager to put a few of those in place, small pieces, equity, and as Sean alluded to other sources of capital, too.

19:34 So for us, this is a flexible tool. It's something we can use at our election, and it's something that we want to use to make sure we can preserve our capital, $255 million at quarter's end for Bluebirds. So I think this is a good thing to have in our back pocket, and we'll use it as we see fit. And other small pieces of capital this year are also available to us. The second question I think was on Blue Walker 3 timing specificity. I'll give a little bit of clarity on that. I mean, the way to think about our timing, Brian, is the satellite needs to leave for the launch pad, you know, call it up to four weeks before we launch. You can go a little tighter, but that's how we think about our internal planning.

20:23 and as we work towards that, you know, satellites going through final testing and felt comfortable reaffirming our summer timeline. We're not waiting on any parts or subsystems at this point. And as we've talked about before, you know, we have contractual commitments with SpaceX on timing within a range, but Final timing is always subject to various steps and considerations, and changes can occur. So for us, the process of managing that timeline is a very detailed, very technical launch checklist, and we are doing that as the highest priority of the company right now. So for us, we look forward to updating everybody in due course, but we reaffirm the summer timeline. And then the last question was on Bluebird timing.

21:09 I'll jump in there. No change from our last call. You know, we're very focused on building and investing in our infrastructure. Abel mentioned, you know, Site 2. And, you know, we're working towards the goal of getting those two facilities and our supply chain to deliver up to six satellites a month. And that's a goal that we have to achieve for 2023. So for us, you know, we're racing towards that goal. And, you know, our intent will be to ramp up to that level. during 2023. And thereafter, 2024 is a very important year to scale the constellation and achieve global coverage. Thanks, Scott. When would we expect the first Bluebirds to be launched, actually?

21:58 So we're starting construction of those this year on top of the investment that we're making now. and we haven't announced yet in 2023 when we plan to launch our first one. Okay, thanks very much. Thank you. Our next question goes from Chris Quilty with Quilty Analytics. You may proceed. Thanks, guys. Just wanted to clarify, I did not ask the Christopher from Florida question before. So first question, As you roll out the testing on the Bluebird satellite, what do you have to invest in terms of CapEx and what is the staging to build out the sort of gateway infrastructure for testing?

22:50 Chris, are you referring to gateways for Blue Walker 3 or gateways for the Constellation? Just for Blue Walker. Okay, so for Blue Walker, basically, we have three ground control centers, Maryland, Colorado, and Australia. And then we have approximately 20 gateway stations that are pretty much getting online as we speak to basically get access to the spacecraft for telemeter control reasons. and then we have, as you know, we recently got the FCC approval for our testing so we have gateways here in Midland and in Hawaii for accessing in United States our QMB gateways and also we have been assigned for Spectrum for due testing directly to the cell phones through the experimental license that we just got. So all of that is on time for our planned launch this summer, and it will be designed to basically test broadband capability directly to the handsets using our next satellite launch.

24:21 Got it. And can you remind us, as you move to the Bluebirds, who handles that ground station capex? Is that fronted by your partners, or is AST responsible for that spending? Yeah, we had an agreement with American Tower for having a carry-neutral location where we actually place the gateways. Typically the gateways CAPEX, the ENOVs, the cord and interconnection of all of that, it is actually part of the agreement to be fulfilled by the operator. We do install the actual gateways, the antennas, typically in a current neutral location, either owned by American Tower or owned by the operator itself.

25:21 Great. And can you remind us, how do you eventually migrate once you go through the experimental testing on both the gateway feeder links and obviously the user links to a fully operational FCC ITU-approved usage of the spectrum? Yeah. Well, we have our filings of the ITU, and then, as you know, every country provides their own approvals for the use of our spectrum or the use of the cellular operator spectrum. So in the case of United States, we have the gateways that will be co-located in American Tower locations.

26:11 Those gateways, they are subject to their own license. They are using satellite spectrum, V-band, and QV Band in order to connect from the gateways up to the satellite. And then we will work with our partner operator, with our partner cellular operator, to use their spectrum in the area where they don't have the spectral deploy. That's the basic setup. That is what we have been doing very actively. In many countries, starting with the countries that will be first in operations, and that seems to be a process, a regulatory process that is working for us.

26:56 We're very encouraged by the perimental license we got from the FCC, but we continue country by country getting these grants for operations of our systems. And specific to the QV band gateway feeder links, that's a relatively new deployment. I think Echo Star is also using that on their Jupiter III. What have you done in terms of testing, either ground testing or optimally satellite testing to ensure the strength of those feeder links? Yeah, just to put it in context, I mean, these feeder links are for the gateways. You get, in the United States, you need two, three for redundancy, to add redundancy. and the coverage area of these links are very, very small, within a few kilometers.

27:55 They are basically designed where you place your gateways and then you get universal coverage through the cellular spectrum. This van is very attractive because of the amount of capacity it has, a lot of to group a significant amount of cellular spectrum into the gateways where we interconnect to the cellular operators. We have actually installations of this type of gateways already. We have the equipment that we have procured to basically access this spectrum. and we will continue testing them with the launch of Blue Walker 3 and with the experimental license that we got from the FCC.

28:49 Thank you. And just if I can, one final question. Due to the Ukraine war, there's been a bit of a shortage of access on ANATOV aircraft, which are typically moved to use to transport satellites. Were you planning on using air transport or... Given your location in Texas, were you already planning on using ground transport for the satellites? No, we were planning to use ground transportation. The container for Blue Walker 3 is actually already built. We will be talking from Midland to Cape Canaveral. It will be one day, one and a half day trip. We also are in contact with the city also to bring train rails into the facility.

29:43 We plan to connect it to the train system as we get towards our six satellites per month capability. But at the beginning, our baseline launch are based on U.S. launches on... and we plan to use ground transportation for that. Great, thank you. Thank you. Our next question comes from Andres Coelho with Scotiabank. You may proceed with your question. Yes, thank you very much. I'm wondering if you could comment on how you MOUs with wireless carriers all over the world will actually translate into a business opportunity once all the testing is over, if everything goes well. How do you translate the MOUs, for example, in Latin America with Millicom, Telefonica, and other players?

30:38 How do you translate them into a business opportunity? Or put it differently, if those MOUs imply an obligation by the wireless carrier to actually start working with you? Just any comment around the MOUs. Thank you. Yeah, okay, well, the terms of the MOUs vary partner by partner, participating MNO by participating MNO. But by and large, they're basically based on a revenue share where we share the revenue that has been generated by our service inside the operator's network.

31:24 So the operator retains the retail capability. They market and they sell the service. They advertise the service either through sending a text message to the user when the user gets out of coverage or by other means in the retail capability. They provide the spectrum. We provide the network. And based on that, there is a split on the revenue that is generated by that. So when we count number of customers, Subs that we can access through the MOUs when we say we have access to around 1.8 billion subscribers. What we're referring to is that the operators which we have agreements or MOUs, they do have 1.8 billion subscribers, and those subscribers become accessible to us through this revenue share agreement.

32:17 Then there's a retail pricing that gets agreed between us, between the operators ourselves, that it depends on what the kind of service is. If it's whatever you go plan, wherever you're located, you get a service through SpaceMobile. That service gets priced at a retail basis based on the country. and other factors. And then you have also the services that are target to serve people that live and work in places where there's no connectivity all the time. So the fundamental is 90% of the Earth's surface do not have several broadband.

33:05 Within that 90% of the Earth's surface, you have half of the world population. that do not have cellular broadband and you have three quarters of a billion people approximately without nothing. That's how we capitalize these agreements with our MNO through our technology. Thank you. But just to clarify, if the testing is successful, the MOUs create an obligation by the carrier to start using your services or is the understanding just optional? I mean, once you deliver the positive testings and once you have your constellation ready, is there a clear commitment towards working with you or can they still pull out?

33:50 Sure, I'll take this one. So our commitments and our agreements in MOUs vary. Some of them are binding agreements, but some of them are not. The purpose of these agreements, of course, is to align interests We've been signing these since 2018 and to ensure that they participate in the development of the technology and regulatory approvals and also thinking through the business side as Abel took us through. At this point, though, as we get closer to launching service in each country, there will be definitive commercial agreements put in place, typical for the telecom industry. Those are not ones that you sign years in advance.

34:36 They don't generate good terms for the seller of the capacity in that case. So we have some agreements that are binding, and the others are MOUs, and those are agreements that we want to make into more definitive commercial agreements with clear pricing levels and clear SLAs, among other terms. So that is a next step before we launch commercial service in any given country. Thank you very much. Very clear. Thank you. Our next question comes from Landon Park with Morgan Stanley. You may proceed. Hi, everyone. Thanks for taking the questions. I was wondering if we could start out just in terms of the opportunities that you guys see ahead. How are you guys thinking about the non-consumer market in terms of the opportunity there, whether it's on the government, military side, or the enterprise side? What type of role do you think you can play in those markets? And do you also expect to be eligible to potentially receive any funding from the BEAD program here in the U.S.?

35:47 Okay, well, we obviously see that a significant number of other opportunities besides the consumer opportunity. However, we believe that the largest opportunity is the 5 billion people that move in and out of connectivity every day and the three-quarters of a billion people that live and work in places where there is nothing. But having said that, there is IoT, defense, and other type of opportunities that are going to be available to us. Obviously, providing universal connectivity in countries, in whole continents, in areas where there is not any other means of connectivity directly to handsets, a very, very large opportunity that goes beyond The consumer opportunity.

36:39 To your question, yes, we plan to participate in the progress from the FCC. As it relates to extending 5E universally in the United States, we believe that that's important for the country. There's a lot of political will to make sure that every citizen gets connectivity regardless where you live or work, both on a fixed type of connections and more into what we do, which is on a wireless cellular connection. So yes, we do have plans to connect. All our models are primarily based on the retail consumer opportunity, but of course there are many other verticals that we will be able to tap as we We develop our network.

37:40 Just to follow up on that, are there any particular use cases that stand out to you as particularly attractive within the government and enterprise markets? Do you think that some of those markets would offer a higher yield on your capacity against the consumer market, or how are you thinking about that? Scott here. As Abel said, It's a little unique for a satellite company to be going after this new market, the wireless market, and it's a very large market relative to legacy satellite opportunities, even if some of those opportunities are nice. So we really like the mass market opportunity. It's one that our M&O partners are really keyed towards.

38:25 But many of our M&O partners are also very good at those other verticals you're talking about. They're developing IoT, government, and many more. which ones might be best because we want to focus on the mass market opportunity. But interest is strong there. We get inbounds on resiliency, obviously, emergency backup, and then, of course, the fact that our network functions without a terminal remains a real cornerstone of a lot of the interest and inbound interest we get even outside of the mass market opportunity.

39:10 Great, thanks for that color. Moving on to just some follow-ups on the questions regarding the feeder links. How many feeder links will each satellite have and what is the channel sort of size in terms of gigahertz for those feeder links? Yeah, we have per satellite up to four feeder links. Each feeder link is around 10 GHz per polarization. We have two polarizations per antenna on the spacecraft, and then they connect down to the gateways in-country.

39:57 Typically, depending on the size of the country, We have between two or three gateways or locations where we bring down those feeder links into the core network of the operators. Okay, so it's up to four links of 10 gigahertz and two polarizations. What type of modulation level do you think you can do in your feeder links? Well, the way that the system is designed is basically to be transparent, being former. So basically the same modulations that we have coming from the phone app to the spacecraft and then translated into frequency to bring it down to the gateway. So are the classical modulations that you will see on a on the downlink from the spacecraft to the phone and from the phone to the spacecraft.

40:55 So there is actually, it's a bend pipe. It's the same modulation that you get on the UE. Oh, yeah, I'm just wondering what, so the fear links will have the same modulation. So what is that modulation, or what is the cycle efficiency you're expecting? Yeah, it's, right, so it's, Depends on many factors, but it's somewhere in the downlink between 3 bits per hertz to 6 bits per hertz and between 1.5 and 2 bits per hertz on the uplink. Great. That's the uplink being the feeder link, you're saying? The uplink is from the phone into the spacecraft. Okay. Great. Thank you. And on the Bluebird program...

41:45 I don't know if you reiterated the expense guidance up top, but given the expense issues we've seen in other parts of the industry, what gives you the confidence that you're not going to see some amount of inflation come through over time? Do you think that there's any reasonable risk of that occurring over the next 12, 24 months? Well, first of all, I mean, for our technology, we are highly vertically integrated. We have control of mostly every component that is in the spacecraft, from reaction wheels, magnetic torquers, flight computers, the micro-in-cell, which is a self-contained system, solar panels.

42:33 So we are... as vertically integrated as we think makes sense in order to keep costs and keep control of the costs. Our cost at this point is very well known, not only with the build of Blue Walker III, but this is substantial advancement that we have and the agreement that we had in place for the provisioning of parts for the Constellation. On the last call, we reiterate our cost basis for the Blue Bear satellites. We see no change on those at this point.

43:21 Is there any significant risk in your mind to the upside over the next year, or do you feel quite confident in those expense numbers? We feel quite confident given where we are on the procurement phase of those parts. Great. And Sean, just one last question for you. Can you just go more into, you know, what attracted you to the company and perhaps any, you know, sort of diligence that you did on your side to get comfortable with the opportunity that the company has discussed? I mean, I think I gave an overview. I mean, it's tough to do this over a call, but it's I have extensive contacts in the industry as a banker for quite a long time, so I did a lot of industry checks. I was able to talk with industry experts who had either been in the industry or analyzed the industry.

44:15 I spent time with a number of wireless operators who knew about the project, and it was a variety of market, technology, Regulatory, and getting to know the team and understanding it. As I see it in my career, I saw almost 10 or 15 different projects that tried to do something similar but always had a challenge of a very, very expensive and custom customer equipment to take the downlink from the satellite, and this is an incredibly challenging Great. Thanks very much for that caller. Thanks for taking the questions. Thank you, and as a reminder, to ask a question, you'll need to press star one on your telephone. Our next question comes from Griffin Voss of UIA Securities.

45:32 Hey, thanks for taking my question. So, thinking on competition, Link is really the only other player out there at the moment, at least that I know of, and I understand it's a very large market, but are you seeing them in the market at all, or have they come up in your conversations with MNOs, just any color you could provide on that front? and then similarly on the MNO front, I believe you've said your partnership with Vodafone includes five-year exclusivity. I was just curious, could you remind me, does that exclusivity timeline begin when commercial service starts? Sure, hi Griffin, I'll take that. So second one first, with Vodafone, you're correct, that five-year mutual exclusivity in their 24 different markets around the world, that starts at service initiation.

46:20 So it was signed years ago, but that five-year period starts with service initiation. And in terms of other players that we run into, we don't really run into other players at this time. I think we've had success building the relationships with the mobile network operators from the early stages of the company. It's an opportunity, like Sean highlighted, that is really differentiated, and the mobile network operators who have Many of them have bad experiences with satellites historically, saw this as solving a lot of the problems of the past. It's one that's always resonated well, and you can see that in the success we've had adding more and more mobile network operators over the last few months, some of whom have over a hundred or multiple hundreds of subscribers under their belt today. I think our opportunity resonates very well.

47:17 I think as we approach our summer launch and plan for our constellation next year and the year after, the volume with the mobile network operators is growing, and that's really exciting to see. But when we're working with the mobile network operators and thinking about the opportunity, it's not really one that they're benchmarking against anyone else at this time. Got it. Thanks, Scott. That's really helpful. and sort of sticking to the MNOs and jumping back a little bit in time here. But I know Verizon and T-Mobile had both filed petitions back at the end of 2020, I think November 2020 it was, to the FCC to deny the ASD service. And to the extent you guys can speak about ongoing conversations or anything like that, have you had any progress with either of those two MNOs since then?

48:05 I mean, obviously you guys have come to numerous agreements with other MNOs since then. I didn't know if that More so validated the service to them, and if you guys had sort of struck up conversations again at all. Sure. So I think the filings around the FCC docket were not unexpected. More than a year ago now, where folks typically lay out their positions relative to where they sit in the market. We think... and many more. and the distribution of coverage today. So I think the big three all certainly have a need for ourselves.

49:08 Got it. Okay. That's great. Thanks a lot for that. And then just one more quick one for me. I know Sean mentioned earlier that you were substantially completed with the BW3 investment, and I know on the last business update call you said we should assume a little more than $80 million of overall investment in that. So I just wanted to make sure I understood correctly. When you say you're substantially completed with that investment, does that mean as of right now or at the end of Q1? I'm just trying to get a better sense of whether we should assume any additional investment for BW3 in Q2 at all. That was referring to as of today. As of today? Okay. Thanks a lot. Cool. That's it for me, guys. Thank you. At this time, I'm showing no further questions.

49:58 I would now like to turn the call back over to management for closing remarks. Great. Thank you, operator. Our company is building a space-based cellular broadband network designed for use of the phone in your pocket today. I want to thank everyone for joining, both the shareholders and the research analysts for their questions, and I hope everyone has a great rest of the week. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.