At its annual event this week, Apple unveiled the new iPhone 14, which will sport a text message service to assist people who need assistance when they’re in remote areas without regular cell phone coverage.
Dubbed “Emergency SOS via Satellite,” the service will use Globalstar’s satellites. Apple said the emergency SOS via satellite will be available to users in the U.S. and Canada in November, and it will be free for two years for Apple iPhone 14 users.
It’s a big deal for a company whose valuation is peanuts compared to the behemoth that is Apple. Globalstar struggled for years, to the point it went through bankruptcy in 2002. But it’s a different company now, and its current leaders couldn’t be more excited for the future.
Granted, there’s “a lot of noise out there,” but Globalstar VP of Strategy and Communications Kyle Pickens said he believes over time, people will see Globalstar as a new kind of telecom company with stable cash flows and huge growth opportunities. “We’re extremely excited about it,” he told Fierce.
Satellite companies like Globalstar and rival Iridium have survived through some tough times, including the aforementioned bankruptcy. But with high-tech companies expressing far more interest in space and deals like what SpaceX recently inked with T-Mobile, the future looks a lot brighter.
Globalstar’s David Kagan, who assumed the CEO position in 2018, has been in the industry for 25 years, and he thinks a lot of this renewed interest has to do with the necessity to converge networks. People are realizing more and more that satellite networks can offer complementary services to terrestrial networks, he said.
Plus, it helps that people with star power like Jeff Bezos and Elon Musk, as well as entities like OneWeb, are drawing attention to the area, providing new energy, engineering talent and innovation to switch things up.
Globalstar has had a very long journey in the low Earth orbit (LEO) space, Kagan acknowledged. “There’s been a complete renaissance of the LEO,” he said. “It’s pretty exciting to see that change.”
They believe what they’ve accomplished with their “partner” Apple, which they decline to talk about specifically other than what’s publicly stated in SEC filings, has changed the satellite industry forever. It’s an incredibly exciting time, even if it’s not reflected in the share price, which was around $1.84 this morning after a highly volatile week.
“We definitely see this as a success story,” Kagan said.
Former Globalstar CEO Jay Monroe, who was the face of Globalstar for many years, is still with the company, serving as executive chairman of the board. He’s been known to play the long game, and he remains highly involved with the company on a day-to-day basis.
Globalstar always has seen itself as having a unique collection of assets, spectrum and and ground stations around the world, according to Pickens.
Band 53 support in iPhone 14
Apple has agreed to include Band 53 terrestrial support in the iPhone, but the emergency messaging service that it plans to offer doesn’t use Band 53, said Tim Farrar of the consultant firm TMF Associates.
“It uses L band for uplink and S band for downlink, in the same way as any other Globalstar satellite services because that’s what a satellite does,” Farrar said. “People seem to confuse what’s going on here.”
Apple agreed to include Band 53 for potential terrestrial use, he said. Band 53 is the one in which Globalstar went through a lengthy FCC process and later 3GPP to get it ready for commercial terrestrial services.
Globalstar still needs to find customers to use that spectrum, similar to what it’s done at the Port of Seattle, Farrar said. The viability of getting those customers for a private network using Globalstar’s spectrum rather than CBRS is an open question.
“How big that market is remains to be seen,” he said, noting that CBRS can do the same thing almost for free with the unlicensed GAA portion. “It’s not going to have an enormous range,” amounting to a 10 MHz channel.
“What’s the advantage to using Globalstar? You could use it in the same spectrum potentially in other countries outside the U.S.,” and maybe that’s an advantage for a multinational company. “But does that really make a huge difference in people’s decision-making? Not sure,” he said.
The company’s motto is around “next generation connectivity from both space and terrestrial networks.” But there’s combining them as a service and combining them as two separate revenue streams. “I think people tend to think it’s the first when really it’s the second,” he said.
While the initial goal for a lot of companies in the 1990s was to combine cellular and satellite, what they ended up doing is emergency satellite phones that people kept in a cupboard until they went out into the wilderness, hiking or back-country skiing. “That’s really what they’ve been selling for the last 20 years,” he said.
Globalstar offers the SPOT service for just those kinds of occasions. Customers can use it to call for help, but it’s one-way. That’s where Iridium’s two-way service has proven more successful, with about twice as many users, according to the analyst.
Yet getting the deal with Apple is still “pretty impressive,” he said. “It’s still very good to have gotten anything out of this because Globalstar has been languishing for years with revenues of not much more than $100 million a year and this is potentially going to nearly triple their revenues, so that’s a massive improvement in their satellite business,” Farrar said.
Fundamentally, before Apple came along, Globalstar was wrestling with a satellite constellation that was going to see the end of its life within a few years. “Certainly, this makes Globalstar a sustainable business on the satellite side. The real question is there any more than that... This is a big step forward for satellite but a small step forward for terrestrial."