[Satellite News 08-29-11] The French Minister of Space Operations Laurent Wauquiez has issued a final authorization to Globalstar to allow the satellite company to operate its second-generation constellation of satellites. The announcement was made just two days before Globalstar’s deadline to acquire authorization, which was stipulated in the company’s loan terms with the Coface French credit export agency.

   The French Ministry also commenced the process to register the satellites with the United Nations, which makes Globalstar’s second-generation satellite constellation one of the first space operations authorized under the recently enacted French Space Act.

   The authorization couldn’t have come at a better time for Globalstar Chairman and Interim CEO Jay Monroe, who announced earlier this month that the financing for its additional 24 constellation satellites had not been secured and that it has begun arbitration proceedings to force prime contractor Thales Alenia Space to begin building them. Construction on Globalstar’s current 24 satellites is near complete.

   In March 2011, the International Bureau of the U.S. Federal Communications Commission (FCC) granted Globalstar conditional authority to operate its second-generation satellites within the United States, pending the completion of the French authorization process. Globalstar said it formally notified the FCC of its successful completion to bring the Commission’s order into effect. Globalstar will now activate its ground stations in North America to begin sending and receiving call traffic with the second-generation satellites and to improve coverage availability for Globalstar voice and duplex data customers in the United States, Canada, Northern Mexico, Puerto Rico and the surrounding regions.

   “This is fantastic news for our distributors and all the patient and loyal users of Globalstar’s voice and duplex data services throughout the United States, Canada, Northern Mexico and the Caribbean," Globalstar Spokesman Steve Smits said in a statement. “As we activate our ground stations throughout the United States and Canada, these customers can expect their call completion percentage to substantially improve. We anticipate call completion will continue to improve for all of our global customers as we deploy additional satellites from our second launch in July as well as the 12 additional satellites slated to launch later this year.”

   Arianespace launched Globalstar’s six new second-generation satellites July 13 from the Baikonur Cosmodrome in Kazakhstan aboard a Soyuz rocket. The launch is the second of four planned launches of six satellites each that are contracted with launch services provider Arianespace.

   “The post-quarter launch of six additional new satellites represents another major milestone achievement for Globalstar, as we continue to deploy our second-generation constellation,” Monroe said in a conference call. “Once our launches are complete and all of our new satellites are fully deployed, we anticipate Globalstar will offer the world’s most comprehensive lineup of commercial enterprise and retail consumer MSS products and services in the industry.”

   Despite the long list of challenges awaiting Globalstar in the near-term, the company posted increased 2011 second-quarter revenues of $18.9 million compared with $17.6 million in the same period last year. Globalstar’s service revenues grew from $12.9 million in the second quarter of 2010 to $13.3 million in its most recent quarter. Equipment revenues also grew from $4.7 million last year to $5.6 million. Globalstar activated more than 19,500 Spot product family units during the quarter.

   “Our revenue increased primarily due to the increased number of Spot and Simplex data subscribers and related service revenue and equipment sales,” Monroe said during a conference call. Activating a record number of Spot units during the quarter continues to demonstrate that we have established our leadership position in the consumer retail MSS marketplace.”

At the end of June, Globalstar completed a private placement with Thermo Capital Partners to raise initial gross proceeds of $38 million before deducting fees and expenses. Thermo, which is partially owned by Monroe, is Globalstar’s principal backer since the operator emerged from bankruptcy protection in 2004.

   In the terms of the transaction, Globalstar issued $38 million in 5 percent interest senior debt. Investors will receive warrants to purchase an aggregate of 15.2 million shares of common stock. Globalstar’s financing plan also gives investors the option to invest up to an incremental $12 million during an approximate three-month period on the same principal terms.