A little more than one year ago, Globalstar LLC was emerging from bankruptcy, a financial state similar to other Mobile Satellite Service providers of the late 1990s. But with new owner, Thermo Capital Partners LLC, and a shift in focus from being a wholesale provider of satellite minutes to being a retail service provider helped to turn the company around to be a profitable business.

“When we moved from a wholesale-only operation to a retail operation, we have captured a unique series of vertical markets that grow significantly in their business commitments,” Globalstar President Tony Navarra told Satellite News. “We are not just selling two, three, four or five Globalstar phones through a dealer that is in a rural location in Canada or only fixed phones in Venezuela that have no phone service at all. What we are selling to now are major corporations in the maritime, recreational and oil and gas industries that buy 150 or 200 phones and they use them for their basic businesses.”

That is not to say Globalstar has abandoned the wholesale concept. Selling satellite capacity on a wholesale basis still accounts for about 50 percent of total capacity sales.

“Our independent gateway operators are doing a superior job growing their businesses,” Navarra said. He added that Globalstar expects equal split of wholesale versus retail sales to remain in the near term.

Navarra declined to talk about specific financial data about the company, as privately owned companies do not have to make financial data public. However, the company did report May 19 that it experienced a 45 percent growth year over year in its subscriber base of voice users compared to a year ago and its simplex data service users have grown at a rate of 900 percent in the same time period. The service driving the growth is the transmission of short bursts of data in applications such as remote monitoring and asset tracking.

Launching Satellites

And while no specific financial data was offered, a telling sign that the company likely is standing on firm financial ground is that it has initiated conversations with launch service providers to get its eight spare satellites out of storage and into orbit.

“We are currently flying what is called the Walker 40 constellation,” Navarra said “In it, we have a couple satellite that are inoperative. That has not caused our satellite constellation to be worse. But we are anticipating that if there are any anomalies, we want to get our eight ground spares in orbit.” He added that the company was unable to get the satellites launched prior to this because it did not have the cash flow during the company’s restructuring period and could not get the necessary financing.

Navarra did not say how many launches the company was looking at. He noted that in the past, the company was able to get four satellites into orbit in one launch, but the company may consider looking at launching one satellite at time. How many satellites go up per launch will be determined when the company awards a launch services contract. Globalstar is looking to have the first launch of one or more satellites to take place in third quarter of 2006.

The satellite will play an important role in extending the life of the current constellation, Navarra said. “All our satellites [are healthy], but some of them we take out of service. They are not broken and they are not non-operational but they may not be providing service to the network. We put them in and out of service at our choice. It allows us to extend our service our network to at least 2012.”

Navarra added that the company would be looking at the next generation satellites for the Globalstar system in about two years.

Emerging Avionics Market

“One of the other markets you will see more and hear more about is Globalstar’s entry into the avionics market and the commercial passenger market in the coming months,” Navarra said.

“For the large aircraft, it is primarily an Inmarsat service for voice and data,” Navarra noted. “But what Globalstar has been doing for several years is working closely with Airbus and with some other organizations to do testing for using the Globalstar system on more of the commuter aircraft.”

Navarra said Globalstar is targeting single aisle commuter aircraft that carry about 100 passengers and are in flight for less than three hours for this service.

–Gregory Twachtman

(Tony Navarra, Globalstar, 408/933-4525)