PARIS — Mobile satellite services provider Globalstar on Nov. 13 said that with its North American business on the mend and a full set of second-generation satellites in service, it will now begin to focus on international markets, starting with Latin America.

The company also said it is introducing a new set of products including a low-cost satellite phone for the mass consumer market and an asset-tracking device, also for the consumer market.

In a conference call with investors, Covington, La.-based Globalstar said it had written down the value of its core professional-telephone product inventory and that it had 45,000 handsets in stock, plus components for up to 200,000 additional phones. Each sale, the company said, will result in more cash to support the wider business.

The existing handset inventory uses gear provided by Qualcomm. Starting in late 2015, Globalstar is switching to Hughes technology. How much of the existing inventory will be sold by then is unknown, but Globalstar Senior Business Director Timothy E. Taylor said it is realistic to assume that $28 million in revenue could be generated from the sale of the existing stock.

The last of Globalstar’s 24 second-generation satellites entered service in late August, meaning the company had only the month of September to see customer reaction before its third-quarter financial accounts closed.

The results appear to be positive in terms of two-way telephone usage and subscriber growth, which are the core metrics Globalstar uses to measure success.

Globalstar's Duplex Improvement

For the three months ending Sept. 30, revenue from what Globalstar calls its “Duplex” two-way service totaled $6.2 million, up 15 percent from the previous quarter and the average per-subscriber revenue also climbed 15 percent, to $24.50 per month. Duplex equipment sales were up 10.5 percent, to $2.1 million. 

Globalstar once had more than 120,000 Duplex subscribers. Then the Duplex performance on the company’s first-generation satellites began to fail. Customers fled to competing providers and those that remained did so only after Globalstar offered steeply discounted rate plans.

By late 2012 the Duplex customer base had fallen to 84,000, and it has since climbed to 85,000, Taylor said during the conference call. 

Taylor said the company does not expect to return to the long-ago days when subscribers were paying $70 per month in service fees, but that an increase to $45 to $55 per month from today’s $24.50 is within reach. He said the company’s target is $40 per month per Duplex subscriber within a year or so.

Globalstar Chief Executive Jay Monroe, whose family company, Thermo, has invested more than $550 million into Globalstar with at least $35 million more to come, said the company’s third-quarter performance is further proof that the near-crisis environment of the past six years has come to a close.

He said Globalstar’s lower gross profit in the three months ending Sept. 30 was due to increased sales and marketing, and that investors should expect this spending to continue.

“We have a new constellation and every day that it’s up there and not full is a wasted day,” Monroe said. 

Gateway Earth stations around the world that have fallen into disrepair in recent years as Globalstar focused on its core North American market will now be refurbished, starting with Latin America, and particularly Brazil, Monroe said.

As Globalstar’s reach around the world contracted with the company’s degraded voice service, North America has accounted for up to 90 percent of the company’s global business.

‘Spot’ Market

Monroe said Globalstar’s experience with its Spot series of consumer emergency-notification services for outdoor users — a successful product whose revenue and profitability was insufficient to counter the loss of the two-way business — will be the basis of several new products.

The Spot Global Phone’s introduction at lower purchase prices than Globalstar’s professional handset will nonetheless carry pricing plans similar to the Duplex service. Monroe said he was not concerned that this product will cannibalize the existing telephone product line.

A new asset-tracking device for the wider consumer market, called Spot Trace, will sell for $100 and provide tracking for automobiles, motorcycles, boats and other consumer assets subject to theft.

For the professional market, Globalstar’s STX3 machine-to-machine (M2M) transmitter for asset tracking will be adopting technical standards being developed by Globalstar and its new partners, Orbcomm of the United States and Inmarsat of London. Orbcomm is an M2M specialist that recently sealed a partnership with Inmarsat, which has long been a principal Globalstar competitor.

Globalstar’s total revenue for the three months ending Sept. 30 was $22.5 million, up 13.6 percent from the previous three-month period. Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, was down 14 percent from the previous quarter as a result of the increased sales and marketing spending.

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Peter B. de Selding was the Paris Bureau Chief for SpaceNews.