Globalstar reportedly shopping around spectrum worth more than $2B

bid
Globalstar is reportedly looking for a suitor as demand for high-band spectrum heats up

Globalstar Inc. is said to be the latest company looking to cash in on the gold rush of high-band spectrum.

Reuters reported late Friday that Globalstar is working with financial advisors as it considers a potential sale of the company, according to unidentified sources. Globastar’s stock had risen nearly 21% so far this year through last Thursday, according to Reuters, and shot up an additional 30% Friday on rumors of a sale.

Shares were down roughly 5% early Monday, however, as the company’s market cap hovered just above $2.4 billion.

Globalstar late last year received approval from the FCC to pursue a terrestrial wireless network using 11.5 megahertz of its satellite spectrum at 2483.5-2495 MHz. The unanimous FCC approval came about six weeks after Globalstar presented a revised plan that eliminated the most controversial parts of its earlier request, which included a proposal to use 10.5 megahertz in the unlicensed 2.4 GHz band, which led to objections over interference concerns and the implication that Globalstar would be afforded special rights.

Globalstar Chairman and CEO Jay Monroe earlier this year thanked the FCC and a host of parties that participated in the lengthy proceeding, including several that had been adversaries in the past, for contributing to what Globalstar sees as a win in the end. The FCC’s order gives it access to a unique swath of spectrum that is particularly well-suited for small cells, which is where so many operators are focusing their build-outs, and presents opportunities from an international harmonization perspective, according to the satellite company.

Globalstar switched from an earlier plan using the 802.11 standard to one that uses an LTE-based protocol, providing economies of scale and the chance to work with wireless carriers or others. Asked by industry analyst Craig Moffett about potential partners and whether there are limitations in Globalstar’s current negotiations given the incentive auction is still going on, Monroe said it’s difficult to imagine a true go-it-alone strategy for Globalstar—it’s not large enough and it doesn’t have the financial resources.

Meanwhile, the value of high-band spectrum in the United States has increased markedly over the last year as carriers look to ramp up network capacity in advance of the launch of commercial 5G services. Verizon last week agreed to pay roughly $3.1 billion in an all-stock transaction for Straight Path, ending an aggressive bidding war that began with an initial offer from AT&T that valued the company at $1.8 billion.

That tie-up followed several other big-budget spectrum transactions, including AT&T’s quiet acquisition of FiberTower and Verizon’s buyout of XO Communications.