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NGN Magazine Magazine logo
July 2010 | Volume 2/Number 4
Cover Story

Globalstar (News - Alert) Gets Its Mojo Working

By Paula Bernier 

Satellite is sexy again. That was the subject line of an e-mail I recently received from satellite services company Globalstar Inc., whose public relations person had read a column I wrote. In it I talked about how using satellite to bring broadband to more residential users may be making a comeback. I based that theory on the fact that $100 million in second-round broadband stimulus funds have been set aside for satellite projects – and the satellite category is a new one for the Rural Utilities Service this round.

Tony Navarra, president of global operations at Globalstar, seems excited about the Federal Communications Commission's recent activities relative satellite. But what's really giving the company a lift these days is the fact that it's planning an autumn launch of a second set of satellites.

"We're going back into service with a vibrant, fully capable installation," Navarra told me in an interview in late May.

To be clear, Globalstar never went out of service.

Although the company has had its share of ups and downs – including a bankruptcy restructuring in the 2004-5 time frame under its original Loral/Qualcomm (News - Alert) ownership, followed by an acquisition by Thermo Capital Partners, and then a 2006 IPO (it trades on the NASDAQ Global Select Market under the symbol GSAT) – Globalstar has continued to offer a range of services to a wide array of customers.

However, some of the satellites owned and operated by the 11-year-old company have reached the end of their lives, creating some "gaps," as Navarra describes it, in Globalstar's voice and duplex data services.

"You might go 12 to 18 hours a day with no interruptions in service," he explains. "But there might be an hour or two in the middle of the day or during the middle of the night when a satellite was coming overhead that was getting old, so it had low power, and it didn't have all the energy it needed to provide service. So there were these gaps in time of service as satellites were coming over your head."

Addressing the Gaps
Despite these gaps, Globalstar's churn rate never got worse than about 1 to 1.1 percent per month, Navarra says. The company moved to prevent churn by reducing its monthly subscriber fee and offering customers an online tool they could use to prepare for the gaps. The online portal enables users to input their longitude and latitude and receive a four- to seven-day chart of when service will be available to them.

"The oil rig guys and the people who were using it industrially loved it" because they knew when to use the service, says Navarra.

But if all goes as planned, there won't be much need for this tool in the future, when Globalstar expects to have its new constellation of 24 satellites in service. The initial launch, planned for the September/October time frame, will supplement the company's existing constellation of satellites, which are orbiting the Earth at an altitude of 850 miles.

"These [new] satellites will have more redundancy on board," says Navarra. "They'll have more power. And they will fill the gaps in service that we've experienced with the current constellation as it began to get old."

While the initial Globalstar satellites were contracted to last seven and a half years, the new ones should have a lifespan of 15 years.

Customers will benefit "by having a handset that will operate for a full 15 years," says Navarra, adding that all existing Globalstar handsets (from Qualcomm) will be compatible with the satellite upgrade although the company will use Ericsson (News - Alert) handsets starting this year. "And we will have the lowest-cost services and the highest quality voice available in the satellite industry."

Additionally, Globalstar expects to increase its data service, which is just 9.6kbps today, to 256kbps starting in 2012 or 2013.

Defining the Applications
Globalstar's voice and data services target a broad set of users, ranging from organizations in industry verticals such as fishing, oil and transportation, to outdoor enthusiasts. Most of the company's 400,000 worldwide subscribers are reached via Globalstar's network of value-added resellers and dealers. They can deliver targeted applications such as position location and asset tracking to the transportation industry, for example.

Navarra says Australia, Canada and U.S., all of which have ample open space, are Globalstar's top-tier markets in terms of revenue contributors. Russia, which he notes is a huge country with a large oil and exploration business that uses Globalstar's satellite service exclusively, and areas of South America, which has spotty cellular coverage and high roaming charges, fall into Globalstar's second-tier markets. The company's newest market, meanwhile, is Africa, for which Globalstar was approached by the government of Nigeria to provide services for its airline, gas, mining and oil industries, as well as for small business customers.




But Globalstar does not target business customers exclusively. The company also sells Globalstar-branded GPS devices through its Web site; at such retail outlets as Best Buy (News - Alert), Cabela's and REI; and in partnership with mapping and GPS outfit DeLorme.

Globalstar introduced its consumer SPOT device in late 2007. Now the company sells SPOT 2, which is 30 percent smaller and lighter than the first iteration of the product. It sells for $169, and consumers get unlimited messaging on the device for $100 a year. As of Globalstar's last earnings call, in early May, the company had received close to a quarter million units in orders for SPOT, which was selling at about 10,000 retailers as well as at www.findmespot.com, says Navarra.

Unlike popular GPS devices from companies like Garmin (News - Alert), he adds, SPOT 2 is not only able to provide a user with information about his or her location, it also can enable that user to send an SMS to a family member or an emergency alert to 911 (via a special button on the device for that purpose) to provide information about his or her condition and whereabouts.


Earlier this year at the Consumer Electronics Show in Las Vegas, DeLorme and Globalstar jointly announced the introduction of The DeLorme Earthmate PN-60w with SPOT Satellite Communicator, which they say is the first handheld GPS navigation device capable of sending customized text messages even when the user is operating far beyond the range of cellular communications.

Navarra says the product it delivers in partnership with DeLorme, which Globalstar in March announced had placed an initial order of more than 15,000 SPOT Satellite Communicators, goes beyond simply targeting outdoor enthusiasts. With the highly accurate maps enabled by the DeLorme applications, and the ability to send messages, this device can support businesses' fleet and other inventory applications, he says. It could even be used for homeland security applications involving container tracking, he adds.

Tracking the Federal Efforts
At the same time that Globalstar is readying for its new constellation launch and expanding its business through the DeLorme partnership, it's been closely following the moves of the U.S. federal government to increase broadband penetration via stimulus funds and The National Broadband Plan.

Navarra declines to offer details on Globalstar's potential involvement in the broadband stimulus effort (for which the second-round application process closed this spring), but he did say the firm is keeping a close eye on the FCC (News - Alert), NTIA and RUS (the latter two of which are dispersing the broadband stimulus funds) activities on this front. "We're very much aware of this, and we're following it," he says.

Navarra goes on to say that Globalstar already has been working with WiMAX (News - Alert) operator Open Range Communications to help enable broadband services.

"We were the first ones to enter into a broadband agreement with the FCC to use our satellite spectrum on the ground to rebroadcast using towers and satellite frequencies," he says. "Here's the cool part: Now with the new FCC chairman coming onboard there's been a new broadband policy .... We fully believe that that plan is going to open up for Globalstar even more uses of our spectrum throughout North America, and increase use of our satellite spectrum for broadband services in the United States."

Navarra here refers to Recommendation 5.8.4 of The National Broadband Plan, which suggests the FCC should accelerate terrestrial deployment in 90 megaHertz of mobile satellite spectrum. As a result of this discussion, Navarra believes the FCC will lift some restrictions on satellite that would enable Globalstar to use up to 25 megaHertz of its spectrum for rural communications throughout the U.S.

"Satellite operators must have spare satellites," he explains. "They must have compatible billing systems. They must be able to have the subscribers that are on the satellite use the same handset or laptop device on the ground terrestrial system as well as on the satellite system.

"We expect that the FCC is going to relieve, or loosen up, some of these requirements, which is going to rapidly allow the use of the spectrum instantaneously, rather than having to build additional products that have what I call dual modality, meaning the modes of operation are for both satellite and ground."

And with such restrictions lifted, says Navarra, Open Range or a third carrier could put a Globalstar antenna on its tower and use the company's satellite spectrum (but not the satellite network itself) to rebroadcast its signal to end users.

Sexy.

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