AST SpaceMobile CEO Abel Avellan said the deal underscores the growing recognition of space-based broadband as a complement to terrestrial wireless infrastructure.

  • The joint venture is expected to receive up to 148 billion yen (approximately $1 billion) in government support over three years under Japan's J-LEO satellite infrastructure project, administered through the Communications and Information Network Association of Japan.
  • The companies aim to begin domestic operations by the end of March 2029, with the network designed to extend broadband coverage to areas with limited or no terrestrial connectivity and support communications during natural disasters and other emergencies.
  • AST SpaceMobile will supply satellites for the network, while Rakuten Group will hold a 51% stake in the venture and AST SpaceMobile's Japanese subsidiary will own the remaining 49%.

AST SpaceMobile (ASTS) shares rose on Monday after the company and Rakuten Group agreed to establish a joint venture to build a direct-to-device (D2D) satellite communications network in Japan.The venture is expected to receive up to 148 billion yen (approximately $1 billion) in government support.

“This represents a significant milestone for AST SpaceMobile and validates the importance of space-based cellular broadband connectivity as countries around the world increasingly recognize the technology as a critical complement to terrestrial wireless infrastructure…” AST SpaceMobile Founder, Chairman and CEO Abel Avellan said.

ASTS shares traded 14% higher at the time of writing.

AST SpaceMobile To Supply Satellites For Japan Network

The companies agreed to establish Rakuten AST, Inc. on November 6. Rakuten AST will collaborate with AST SpaceMobile to deploy and manage low Earth orbit (LEO) satellites compatible with mid-band spectrum. The Ministry of Internal Affairs and Communications selected a joint proposal submitted by RAST, Inc., Rakuten’s preparatory company, and Rakuten Mobile under Japan’s J-LEO satellite communications project.

The support will be administered through the Communications and Information Network Association of Japan (CIAJ) the organization established to manage the fund. The grant is expected to be received by Rakuten AST after its establishment.

Rakuten Group will hold a 51% stake in the venture, while AST SpaceMobile Japan Holdings II GK, a Japan-based wholly owned indirect subsidiary of AST SpaceMobile, will own the remaining 49%. The companies aim to begin domestic operations by the end of March 2029.

Satellite Network To Support Emergency Connectivity

The planned service will use AST SpaceMobile’s large-scale satellites to provide high-speed internet, including video streaming and social media, on commercially available smartphones without specialized equipment. 

The project aims to extend cellular broadband coverage to areas with limited or no terrestrial service. It also includes a framework for emergency inter-carrier roaming among mobile network operators. Ground-based base station equipment will enable Japanese telecommunications operators to manage and operate the network.

Rakuten Group Chairman and CEO Mickey Mikitani described the project as “a key pillar of Rakuten Mobile's network strategy,” adding that the company aims to build an integrated framework covering satellite procurement and operations while expanding business opportunities in satellite communications.

Companies To Explore AI And Global Service Opportunities

Separately, Rakuten Mobile plans to work with AST SpaceMobile on AI edge computing and develop AI-driven spectrum management technology. The companies will explore applications in higher-speed data communications and industry-specific Internet of Things (IoT) solutions for logistics, infrastructure monitoring, construction and agriculture.

Beyond Japan, Rakuten AST plans to work with AST SpaceMobile to offer services to the satellite company's customers worldwide, subject to regulatory approval.

Rakuten Mobile also plans to begin commercial-environment testing of its satellite-to-mobile service within this year under the strategic partnership established between Rakuten and AST SpaceMobile in March 2020.

How Retail Views ASTS

On Stocktwits, retail sentiment around the stock remained in the ‘bullish’ territory, amid ‘normal’ message volumes in the past 24 hours.

ASTS shares have dropped over 49% year-to-date.

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