NEWTOWN, Conn. - Globalstar has largely resolved issues that arose while its second generation satellites were being deployed. Globalstar and Thales Alenia developed a software patch allows satellites to continue operation despite problems with momentum wheels. The two companies also settled a financial dispute, with Thales Alenia forgiving some of its owed payments and Globalstar agreeing to purchase six additional second-generation satellites that will be delivered in late 2015. There is also an option for 24 more. Globalstar has also came to an agreement with Arianespace over payments for launch services, allowing six satellites launched into launch in February 2013.
Following the resolution of these issues, Globalstar declared its satellite network fully operational on August 28, 2013. With the network operational, Globalstar has begun to steadily increase its customer -base, and therefore revenues. In fact, revenues increased 9 percent in 2014 to $90.1 million. At the same time, Globalstar continues to pay off debt, reducing long term debt from $665.2 million to $623.6 million.
In addition, the company has also received permission from the U.S. Federal Communications Commission to use some of its spectrum for terrestrial data networks. While Globalstar is unlikely to develop its own terrestrial network, it could partner with a terrestrial broadband provider, or sell some of its spectrum. In either case, the company will benefit from revenue generated from the reallocated spectrum.
While Globalstar still has a long way to go before it is financially healthy, the company continues to increase its revenue and pay off debt. The company could also benefit from additional revenue by selling or leasing spectrum. For that reason, satellite deliveries to Globalstar will continue. The company will take delivery of the final six second-generation satellites as part of its agreement with Thales Alenia Space. Forecast International expects the company to take deliveries of new satellites starting early in the next decade to replace the satellites currently in orbit.
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