AST SpaceMobile, Verizon satellite internet partner

Satellite to phone service provider AST Space Mobile announced a collaboration with Verizon on wednesday, complementing the company's recent deal with AT&T to provide remote coverage in the United States.

AST SpaceMobile builds satellites to deliver broadband services to unmodified smartphones, in the emerging direct-to-device communications market.

The company's chairman and CEO, Abel Avellan, praised AST's agreements with Verizon and AT&T as “eliminating dead zones and strengthening remote areas of the country with space-based connectivity.”

Verizon's deal also actually includes a $100 million raise for AST, in the form of $65 million in upfront commercial services and $35 million in debt via convertible notes. The companies said $45 million of the upfront payments are “subject to certain conditions,” including necessary regulatory approvals and the signing of a definitive commercial agreement.

AST shares rose as much as 37% in early trading from the previous closing price of $5.33 per share. The company's shares have more than doubled in the past month.

The Verizon partnership follows a similar pattern to AT&T's work with AST. In January, AT&T was a co-debt investor in the company alongside Google and Vodafone. The companies then entered into the commercial agreement earlier this month, which “outlines in much more detail how we will ultimately deliver service together,” AST Chief Strategy Officer Scott Wisniewski said in a statement to CNBC.

AT&T told CNBC on Wednesday that it welcomed AST's partnership with Verizon.

“[It] reinforces the shared commitment to bringing rural broadband in space directly to everyday mobile phones,” said Chris Sambar, head of AT&T Network, in a statement.

A variety of major players are taking advantage of the direct-to-device (D2D) capability and see an opportunity to expand the mobile communications market to anywhere on Earth where “cellular signals are unreachable through traditional land infrastructure,” as Srini Kalapala, senior vice president of technology and product development at Verizon, described in a statement Wednesday.

Smartphone makers, service providers and satellite companies are working or collaborating on D2D projects. Competing with AST's deals is SpaceX's Starlink, with which it collaborated T-Mobile. Additionally, Apple has spent a lot of money to deliver this World star-Supported the “Emergency SOS with Satellite” service, which was rolled out on iPhone 14 models.

AST expects to launch the first five commercial satellites later this year. SpaceX, with more than 3 million Starlink customers, aims to roll out the addition of its T-Mobile-supported phone service later this year. Elon Musk's company earlier this month completed what it said was the “first video call” over social media using its satellites connected to unmodified phones.

Correction: Apple spent a lot of money to offer its Globalstar-backed “Emergency SOS with Satellite” service. In an earlier version, a company name was mentioned incorrectly.