Next-Gen Ground System, TLPS Ruling Top Focal Points for Globalstar

Globalstar Chairman and CEO Jay Monroe rings the Opening Bell at The New York Stock Exchange on April 21, 2014 in New York City. Photo: Dario Cantatore/NYSE Euronext

[Via Satellite 05-08-2015] Globalstar anticipates an increase in data speeds for its Mobile Satellite Services (MSS) with the company’s second-generation ground system rendering services approximately 25 times faster than today. Jay Monroe, CEO and Chairman of Globalstar, said during the company’s first quarter 2015 earnings call that rollout will begin this year.

Monroe said the full potential of Globalstar’s new constellation has been curtailed by the need to operate with a first-generation ground system. Hughes Network Systems and Ericsson are building the $140 million system, which Monroe said is 85 percent already paid.

“This new system is all IP-based and fully backwards compatible with our current products and services. The North America system is expected to be online late this year, and final upgrades elsewhere should be completed next year, said Monroe.

Globalstar’s second-generation satellite constellation of 32 spacecraft in Low Earth Orbit (LEO) is currently two years old. With the first generation ground system, downlink throughput is 9.6 kbps, but the new system will ramp up to 256 kbps. Hughes is providing the Radio Access Network (RAN) and designing second-generation interface chips for new handsets. Ericsson is tasked with developing, implementing and maintaining the ground interface, and supplying a modern and standard telco core network to improve flexibility.

Monroe said the improved ground system will expand coverage and enable new services such as Web browsing in a mobile environment. The upgrade will also drive an order of magnitude reduction in cost for Sat-Fi, the company’s satellite hotspot product.

“The flexibility with regards to new product functionality [in MSS] has always been limited by slow data speeds, relatively archaic and large expensive data boards, and high subscriber prices resulting from low volumes. However these limitations and technological barriers are removed for Globalstar when the ground upgrades are complete. The Sat-fi product will cost not a $1,000 as it currently does but $100, and it will be materially smaller in form factor at much faster speeds,” he said.

Globalstar expects it will be better able to service a large subscriber base along with climbing data demands with this system. The second-generation ground system will also support two-way functionality for Spot devices. Monroe said the company has sold an average of 130,000 one-way and Spot units, and that two-way communications will lead to new command and control features, texting and better tracking and emergency services without an increase in cost.

Globalstar is also furthering its push for into new geographic markets.

“The mix of subscribers is continuing to shift to non-north American gross adds, which increased to 24 percent of total gross adds in Q1 2015. These markets now account for approximately 20 percent of our total duplex subscribers, and we expect this percentage to increase,” said Monroe.

Gross additions of duplex subscribers increased by 7 percent in North America, 65 percent in Europe and 414 percent in Latin America. The company plans to further expand into Africa and Asia over the next 18 months.

Monroe also expressed confidence in the U.S. Federal Communications Commission (FCC) making progress toward the Notice of Proposed Rulemaking (NPRM) for Globalstar’s Terrestrial Low Power Service (TLPS).

“With the most recent batch of comments received by the FCC on the TLPS NPRM we hope the process is nearing an end with a final rule promulgated this summer,” Jim McIlree, senior research analyst at Chardan Capital Markets wrote in a May 6 research note. He pointed out that “Comments from CableLabs, the Consumer Electronics Association, the National Cable & Telecommunications Association, Iridium and EIBASS expressed dissatisfaction with the March 6 to10 demo conducted at the FCC’s Technology Experience Center and called for rigorous testing before the FCC releases a final rule.” He concluded, however, that Chardan finds it unlikely that the opponents of TLPS will derail proceedings at this point.

“We believe the TLPS rules will be finalized this summer and end up very similar to the NPRM, because, despite the extended period of time of this rule making, opponents have yet to provide reasons why TLPS will harm other users of the [Industrial, Scientific, and Medical] ISM band. Once the U.S. process is over, Globalstar will focus on international jurisdictions that either harmonize with the U.S. or follow the FCC’s lead,” said McIlree.

Globalstar experienced significant resistance to TLPS from Kerrisdale Capital, which the company countered in a lengthy presentation last year. Monroe said the FCC has five reports the agency can now reference, and that the TLPS demo proved the service will not compromise the Channel 11 ISM band.

“We think the information contained in those reports is well understood by the FCC and what it shows is that there has been no impact on channel 11 which was in fact the primary concern,” added Monroe.