Satellite Contract, Stock Sale on Globalstar’s 2006 Agenda

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  Space News Business

Satellite Contract, Stock Sale on Globalstar‘s 2006 Agenda

By PETER B. de SELDING
Space News Staff Writer
posted: 30 January 2006
03:10 pm ET


Globalstar increased its subscriber base by 46 percent, to 195,000, in 2005 and expects to surpass 270,000 subscribers in 2006 — the year it will select a builder of its second-generation satellite system and seek financial backing from the U.S. public equity market, Globalstar Chief Executive Officer Jay Monroe said.

Monroe said the Milpitas, Calif.-based satellite-telephone company has not yet determined what its next satellite system will look like. In a Jan. 25 interview, he said the follow-on system could be just a few satellites in geostationary orbit, or one that, like the current Globalstar constellation, features several dozen satellites in low-Earth orbit.

“That decision has not been made,” Monroe said of the configuration of the second-generation Globalstar system. “There are real advantages to a LEO [low Earth orbit] constellation and our inclination is to perpetuate our existing system. But we are evaluating everything.”

Globalstar was purchased by privately held investment company Thermo Capital Partners of New Orleans and Denver in late 2003, permitting Globalstar to exit Chapter 11 bankruptcy.

Globalstar’s creditors, in agreeing to the deal, insisted that the company return to the stock market by October 2006.

Monroe conceded that no company likes to be given a deadline for a stock-market introduction. But he said the commitment is binding and in any event Globalstar will need to raise several hundred million dollars to fund the construction and launch of its next-generation system.

The company’s current system is designed to have 40 operational satellites and several in-orbit spares. Today there are 43 satellites operating, including three that are occasionally removed from service for maintenance. The fleet was launched in 1998 and 1999. With some exceptions, the satellites are expected to remain operational for 10 years after launch.

Eight spare satellites are in various stages of preparation at prime contractor Space Systems/Loral of Palo Alto, Calif.

Monroe said a dispute with Loral over a contract to make the eight spares ready for launch has been all but settled, with no further obstacles to a launch of the first four in early 2007.

Globalstar has contracted with Starsem S.A. of France to launch those spacecraft aboard a Russian Soyuz vehicle, the same rocket that lifted part of Globalstar’s current in-orbit fleet.

The other four satellites will be launched by Starsem or by Eurockot Launch Services GmbH, the German-Russian venture that operates the Russian-built Rockot vehicle, which can carry two Globalstar spacecraft at a time.

Monroe said the addition of eight satellites will permit the current constellation to operate without major coverage caps until around 2011.

Globalstar plans to issue requests for bids to build its next-generation system in the coming weeks. A decision on a supplier is expected by this summer, even before the company completes the stock-market offering that will finance the system’s development.

As is the case with several other mobile satellite service providers , Globalstar is seeking to broaden its appeal by filling in coverage gaps through the use of ground-based signal boosters stationed in urban canyons and other areas where line-of-sight satellite links are weak.

The U.S. Federal Communications Commission (FCC) on Jan. 20 granted Globalstar permission to install a network of these stations, often referred to as ancillary terrestrial components, which resemble cellular telephone towers.

According to Globalstar’s FCC filing , a Globalstar system including terrestrial signal boosters would be able to accommodate 490 calls in the same bandwidth now needed for a single Globalstar call.

The company said it would be able to take on up to 4 million subscribers in the 10 biggest U.S. metropolitan areas, plus Washington, with a network of signal boosters.

The FCC has permitted satellite companies free use of the same spectrum they are using for satellite links to add the terrestrial towers. But the commission has insisted that these companies maintain their satellite constellations and not use their orbital infrastructure as a cover for creating, free of spectrum-auction costs, a nationwide, ground-based wireless communications network.

In Globalstar’s case, the FCC in its Jan. 20 decision insists that Globalstar have spare satellites in orbit before operating its ground-repeater network.

Certain technical parameters and equipment validations also must be satisfied before the system can be installed, the FCC says in its ruling, which was published Jan. 23.

Monroe said Globalstar will now begin discussions with potential partners to co-finance the ground network. He said there is a long list of potential partners, including existing cellular operators, satellite-television companies and satellite radio broadcasters.

Comments: pdeselding@compuserve.com