Some things are coming full circle at Globalstar, and that’s not merely a bad pun about its satellite business.
Paul Jacobs, the former CEO of Qualcomm, was named CEO of Globalstar in late August. Globalstar’s claim to fame, so to speak, is powering the satellite service that supports Apple’s Emergency SOS service, which debuted with the iPhone 14.
But Globalstar has been around for years, including a stretch where it was lobbying the FCC to use spectrum designated for mobile satellite service for terrestrial purposes. More recently, it’s been focused on efforts to get its Band 53 spectrum supported in more devices. Band 53 is TDD spectrum in the 2483.5-2495 MHz range.
Q3 2023 results
Efforts to boost revenue are paying off. In the third quarter of 2023, Globalstar’s total revenue increased 53%, to $57.7 million, compared to the third quarter of 2022, thanks to higher service revenue. Its Q3 2023 net loss was $6.2 million compared to a net loss of $204.4 million for the third quarter of 2022.
Jacobs started his first quarterly Globalstar earnings call Thursday by noting his long history with the company, going back more than 20 years. When he was at Qualcomm, he was also involved in other satellite businesses such as Omnitracs and OneWeb.
Globalstar actually started out as a Qualcomm and Loral joint venture in 1991. In fact, it was 25 years ago Wednesday that the first satellite call on Globalstar’s network was placed by Jacobs’ father, CDMA pioneer Irwin Jacobs, to then Loral CEO Bernard Schwarz.
Why take the CEO job?
“I feel Globalstar has the right sized platform, resources and a great team, one that fits with my vision of where connectivity is heading,” Jacobs said. Combining Xcom’s technology with Globalstar’s spectrum assets provides signification differentiation as they address mission-critical wireless applications, he added.
Jacobs also founded Xcom Labs, which was already working with Globalstar to increase spectral efficiency and enhance throughput over Band 53 when he was named CEO. Jacobs brought Xcom colleagues with him over to Globalstar, including Matt Grob and Peter Black. In conjunction with Jacobs’ appointment, Globalstar entered into a strategic perpetual licensing agreement for exclusive access to certain Xcom technologies and personnel.
Jacobs said his first 60 days at Globalstar were spent meeting with customers and partners and reviewing initiatives such as enhancing their satellite constellation and growing the IoT business.
Asked about the direct-to-device (D2D) space, Jacobs said there are a lot of people focused on D2D and they may be pitching it as if it’s going to be the main way people obtain connectivity.
“I don’t necessarily believe that, but there’s certainly plenty of places in the world, where even when you have cellular coverage you’re not in coverage, right? You’re in an area that says it has coverage, but for whatever reason, you have shadowing or there’s other reasons why you don’t have access,” he said.
“I think the satellite technologies can be good for that kind of an infill, as well as obviously for just providing geographical coverage,” he said. “Where people are saying you’re going to have a lot of the traffic going over satellite, that I don’t necessarily believe at this point, but I do believe and we’re already seeing it, that direct to device is there. It has excellent use cases already, and people will continue to improve the functionality.”
One of the lessons from Qualcomm’s early days with Omnitracs, the satellite service for long-haul trucks, was the satellite service eventually didn’t provide enough incremental value over what could be achieved with terrestrial cellular.
Something that’s new these days is people are using their phones for things that require a lot of bandwidth, and bandwidth from space is relatively expensive to provide.
“These things are going to play out for the next few years. We’ll understand those better and better, but I would just say that it takes a lot of space resources to serve a phone at high bandwidth, high throughput,” he said, and that turns into costs. Operators will need to weigh whether it’s better to use a terrestrial-based device or connect through satellite when those services become more widespread.
“There’s plenty of companies that are trying to compete in this mega constellation space. Obviously, there’s one that’s providing fixed wireless access right now. I think people are going to try for it. The question is, and as we’ve seen in the past, whether the economics actually work out and that remains to be proven,” he said.
At Globalstar, they’re focused on what they can do that’s cheap and ubiquitous, something that can serve a lot of users, and that includes providing connectivity not necessarily all the time but when consumers need it most, such as in emergencies for the SOS service.
“I think it’s going to depend on consumer willingness to pay for having very high data rate connections through a satellite,” and that remains to be seen.