Globalstar has secured a monumental $1.1 billion deal with Apple to enhance its satellite network capabilities. This partnership signifies a strengthened alliance between the two companies. Globalstar will expand its mobile satellite services through a new constellation of satellites, an improved global ground infrastructure, and additional service licensing.
As part of the agreement, Apple has committed to prepay up to $1.1 billion to aid the development of the satellite network, covering essential aspects such as satellite construction and launch. Moreover, Apple plans to invest $400 million for a 20% passive equity stake in a special-purpose entity created by Globalstar. This entity will manage assets related to the mobile satellite services network.
Despite this significant investment, Globalstar retains full operational control over the network while dedicating a substantial 85% of its capacity to Apple’s needs. This ensures continued service availability to other satellite customers from Globalstar. Moreover, Apple’s considerable prepayment will enable Globalstar to retire its existing debt and yield additional revenues through service fees, milestone-related payments, and licensing compensations.
The agreement includes options for Apple to reclaim its equity stake post-fulfillment of the prepayment obligations. This move projects to double Globalstar’s revenue within the first year of the MSS network launch, marking a pivotal advancement in their business operations.
