Globalstar Targets More Growth With Band 53 Opportunities
Globalstar reported record growth in the first quarter of 2023, and expects more growth to come this year, highlighting opportunities commercializing its Band 53 spectrum.
The operator released its first quarter 2023 results on May 5, announcing it signed a new partnership this week for a terrestrial service using its Band 53 spectrum. This deal will bring in “significant near-term revenue,” and once engineering analysis is complete, would convert to a long-term lease with additional revenue, the company said. The partner was not named.
Chairman Jay Monroe said on a Friday call with investors that the service will initially be available in the U.S. and Canada. He said revenue from this deal will be additive to other revenue because it does not affect other opportunities.
“We believe the deal represents good value for our spectrum, while maintaining the flexibility to pursue all other public and private wireless deployments,” Monroe said, previewing other similar agreements.
Globalstar expects to close another deal for critical infrastructure in Canada to utilize its Band 53 spectrum, Monroe added, saying the company expects to “replicate this exact opportunity in many other geographies.”
In addition, the company is still in the early stages of work with its partnership with Qualcomm, after signing an agreement in March for Qualcomm FSM platforms to be compatible with Globalstar’s Band n53 terrestrial spectrum for private networks. The Band 53 progress and partnership with Apple are a “new chapter” for Globalstar, he said.
“There is not a room that we walk into today where the conversation hasn’t changed radically as a result of everything that we’ve been doing in the last couple of years, whether it’s direct-to-handset with truly transformative partner — or our relationship with Qualcomm, which finalized the Band 53 infrastructure picture for us, as well as made the chipset available to all handset manufacturers that they currently work with,” Monroe said.
In terms of other potential opportunities, Globlastar is not an ideal fit for a satellite provider for John Deere, CEO David Kagan said in response Friday to an analyst question. Deere is looking for a two-way, broadband-type of service, and Globalstar is unlikely to win the bid, Kagan said. The company is targeting Deere and similar companies for other solutions that Globalstar can provide, with low-data rate capabilities.
Globalstar increased revenue nearly 80% in the first quarter of 2023 compared to the same time last year, with the company reporting $58.6 million in revenue, with service revenue from the Apple deal and equipment sales.
The company is the satellite provider for Apple’s emergency messaging service on iPhone 14 phones, and has agreed to allocate 85% of its current and future network capacity to support the services.
Service revenue was up $23.6 million with the increase from starting service from the Apple deal, which started service in November 2022. Apple also paid Globalstar $6.5 million for performance in the prior periods, which Globalstar recognized during this quarter.
Globalstar is also seeing an increase in commercial IoT subscribers, reporting 75% increase in activations in the past year compared to the prior year. The company expects momentum to continue, reporting manufacturing orders “significantly above our historical levels” to keep up with demand.
Subscriber equipment sales is a smaller portion of the business, but still increased 66% in Q1 to $5.7 million, compared to the same time last year. Globalstar said device sales have picked up significantly this year.
Net loss was $3.5 million, compared to $20.5 million in the same time last year. Globalstar said the net loss was due to a $10.4 million non-cash loss on extinguishment of debt.
Globalstar maintained its guidance for 2023, expecting total revenue for this between $185 million and $230 million — not including revenue from terrestrial spectrum deals.