[Satellite TODAY Insider 11-11-10] Despite a 4 percent gain in overall revenues at $18.2 million, Globalstar reported $24.5 million in losses during its 2010 third quarter as the company prepares to shift its voice customers to its 24 second-generation satellites, Globalstar announced in its latest financial results issued Nov. 8.
Globalstar CEO Peter Dalton said the sharp decline in profits was attributed to the fact that all but eight of the mobile operator’s first-generation satellites have lost two-way voice capability. The company had to offer special pricing deals to its 105,000 voice subscribers. One of these deals was a package that included a new Qualcomm handset and 12 months of unlimited calling for less than $750. The first-generation satellites “loss of two-way [service] was a result of degradation caused by radiation exposure in low-Earth orbit. The second-generation satellites are better protected against radiation and are built to last for 15 years, which is double the design life of the first generation,” Dalton during a conference call to discuss the results.
The mobile satellite operator also reported that it was impacted by a U.S. Federal Communications Commission (FCC) order to stop providing its radio spectrum for Open Range to use in a terrestrial-wireless service until the company met its satellite-service obligations under its U.S operating license. Dalton said the obligations would not be met before all of the second-generation satellites are in service in late 2011.
Globalstar, which launched the first six of its second-generation satellites in October, expects to return to full two-way voice capability in mid-2011 once the remaining 18 constellation satellites are in orbit. “The first six second-generation satellites are healthy in orbit. The first of those should be operational by late November. Two more will enter operational service by January, with the remaining three in April. … The second batch of six will launch in February or March, depending on how testing proceeds with the first six,” Globalstar President of Operations Anthony Navarra said during the call.
Globalstar said it has invested in Web consumer-products presence with its Spot GPS hand-held terminal to provide location and emergency services as well as a Web-based facility to inform customers in advance when and where voice capability will be available.
Globalstar’s total subscribers, combining the core voice and Spot data terminals, were 431,732. While the company said voice subscriber defections are expected to continue, the rate of defection slowed to 1 percent per month during the quarter.
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