Top 5 Companies To Watch | Globalstar

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Globalstar’s history has been marked by one daunting challenge after another, including an early launch failure, bankruptcy, the performance degradation of its initial satellite constellation, disputes with its satellite and launch contractors, and cash-flow difficulties. 

But the mobile satellite services operator, thanks in large part to the committed financial backing of Thermo Capital Partners, has managed to persevere, finding a way to finance and launch a second-generation constellation of 24 satellites that became fully operational this past summer. This, coupled with a restructuring of its debt, has positioned the company to focus building up the business.

In its latest quarterly earnings report Nov. 13, Globalstar reported a continuing rebound in its core mobile telephony business, which was hit hard by the radiation-driven glitch aboard its first-generation satellites.

But arguably a far more significant development occurred the week before, when the U.S. Federal Communications Commission (FCC) agreed to consider Globalstar’s request to use portions of its assigned radiofrequency spectrum for terrestrial services. Specifically, the FCC on Nov. 1 proposed new rules that would allow Globalstar to deploy a low-power wireless broadband network using S-band spectrum currently set aside for mobile satellite services. 

Globalstar has also asked the FCC to change the rules governing S- and L-band mobile satellite spectrum to permit their use in high-power terrestrial broadband networks. The FCC did not issue a proposed new rule on that request, but said it would consider the L-band proposal separately.

The FCC cautioned that Globalstar’s S-band proposal has raised “significant concerns” about interference with unlicensed equipment, such as popular Bluetooth wireless devices.

Globalstar was nonetheless elated at the FCC’s announcement. “The FCC’s release of Globalstar’s requested Notice of Proposed Rulemaking last Friday represents a seminal development and yet another step forward in Globalstar’s renaissance,” Jay Monroe, Globalstar’s chairman and chief executive, said in a Nov. 3 press release. “We look forward to receiving the public’s comments and working towards a final order over the next several months.”

What Monroe didn’t say — but some industry analysts did — is that a rule change in Globalstar’s favor could make the company a ripe target for acquisition by a large cable, telecom or other media company.

J. Armand Musey, president and founder of the Summit Ridge Group, a New York outfit that specializes in media and telecom financial advisory services, said the FCC’s notice is an important step toward a rule change that would significantly increase the value of Globalstar’s spectrum.

Musey said Globalstar’s ability to roll out a terrestrial network on its own is doubtful, so to fully capitalize on a favorable ruling it would either have to be acquired by, or partner with, another company. He identified Amazon.com as one potential partner. Bloomberg reported earlier this year that the e-commerce giant was using Globalstar spectrum to test a wireless network that would allow its devices to connect to the Internet.