Globalstar Hopes Offering Broadband Services Can Fulfill Debt Obligations

Globalstar, a satellite fleet operator focusing on low Earth orbit spacecraft, has met with regulators from over 30 countries to discuss plans to offer mobile broadband services. They hope to gain authorizations from each of those countries, approving the use of their terrestrial communication system, using S-band. As a result, about 1.1 billion people could have access to broadband services.

This plan involves monetizing about 16.5 MHz from the company’s S-band spectrum. If approval is received from each of the countries involved, it could lead to a huge boost for Globalstar, keeping them operational for a few more years. Currently, they are approximately $45 million short of meeting their upcoming debt obligations. While they are earning more than in previous years, up 16 percent from 2016, they are still operating at loss.

The second-generation satellite constellation consists of 24 separate units. Its $1.1 billion-dollar price tag was financed through numerous banks in France and Thermo Capital, an investment company. As of last week, they were approximately $574.4 million still in debt. Most of that debt is obliged to the banking network in France, which is why Globalstar needs to find ways to monetize their existing satellite constellation.

Thermo Capital was founded and is still managed by the CEO of Globalstar and has repeatidly stepped up to provide financial support to Globalstar whenever it struggles. He told reporters that creating and running a commercially licensed S-band to be used for broadband services is a unique achievement, one that Globalstar is eager to earn.

Experts believe that Globalstar could sell their wireless services at a higher price than their current estimate, given the speed and location of the spectrum. Globalstar has only recently begun developing the technology required to completely harmonize the S-band spectrum, work is moving ahead at a relatively fast rate. The only barrier to this proposal is a lack of approval from required countries. This may be due to fears about the long-term viability of the project.

Finding ways to monetize this spectrum has taken a bit longer than the company initially expected, but research analysts do believe the project is viable, which should aid in getting approval. At the moment, only Botswana and the United States have approved their mobile broadband proposal. As additional data about the reliability and speed of Globalstar’s anticipated 5G services, they expect additional countries to also lend their approval.