AST SpaceMobile Inc. shares gained by the most ever after Verizon Communications Inc. said it will invest US$100 million in a partnership with the satellite communications company intended to challenge Elon Musk’s SpaceX. 

Shares of AST rose by a record 69 per cent to close at $9.02. The partnership marks a rare move for Verizon and AT&T, as the two join forces with the same aerospace company in a bid to challenge SpaceX.

AST announced a similar agreement with AT&T Inc. two weeks ago. Now with both deals in hand, the Midland, Texas-based company said it will be able to provide 100 per cent coverage of the continental U.S. from smartphones to its future planned satellite system, utilizing the radio frequencies allotted to the two telecom giants by the Federal Communications Commission.

“This partnership will enhance cellular connectivity in the United States, essentially eliminating dead zones and empowering remote areas of the country with space-based connectivity,” Abel Avellan, founder and chief executive officer of AST, said in a statement.

The deals by the two telecom companies represent a shared commitment to expanding space-based wireless service, said Chris Sambar, head of network for AT&T. 

“Together with AST SpaceMobile we have agreed to welcome another mobile operator in the US to bring in more spectrum and more coverage to create an even better solution and enhance service capabilities,” he said. “With AST and the other partners around the globe we are shaping the future of connectivity for all.”

AST is one of a handful of companies trying to use low-orbiting satellites to provide connectivity to regular consumer smartphones, a market often referred to as “direct-to-cell.”

Musk’s company announced a similar partnership with T-Mobile US Inc. in 2022. SpaceX is pursuing the market with its massive Starlink system, which boasts roughly 6,000 satellites in orbit around the Earth. T-Mobile is providing its government-regulated radio frequencies to Starlink for their partnership, and the companies started testing of the service this year on some satellites.

Verizon will provide AST with $65 million in commercial prepayments, much of it subject to regulatory approvals and signing of a definitive agreement. The additional $35 million will come in the form of convertible notes.

AST has a 693-square-foot satellite, BlueWalker 3, in orbit, after launching it on top of a SpaceX Falcon 9 rocket in 2022. Eventually, the company plans to provide global cellular coverage with a system of 168 satellites in low-Earth orbit. The company plans to ship its first five commercial satellites to Florida in July or August for launch.