Globalstar gaining from Apple deal
March 6, 2024
By Chris Forrester
Satellite operator Globalstar is doing well as a result of its relationship with Apple and its iPhones. Globalstar’s revenues in the main come from its mobile satellite services division but very much is looking to a future from satellite-based links with terrestrial services. Its revenues are up a useful 17 per cent in its commercial Internet of Things (IoT) segment.
Apple’s cash injection into Globalstar is helping fund 17 new satellites which will provide the backbone of Apple’s emergency iPhone messaging service. Satellite builder MDA is constructing the satellites and MDA has an option on a further nine satellites for Globalstar. The satellites are scheduled to launch in 2025.
Globalstar has reported record subscriber growth of 9 per cent (to 481,859) last year, and monthly ARPU up 7 per cent to $3.95 per sub. Annual revenue is up more than 50 per cent (at $224 million) over 2022. Its overall net loss has reduced to $24.7 million (from $257 million in 2022).
Paul E Jacobs, the former CEO at Qualcomm and now CEO at Globalstar, emphasised the company’s successful execution of its business plan, which has enabled funding for growth initiatives and the development of new products and services with substantial revenue opportunities.
“Today the average revenue for the commercial IoT subscriber is much lower than our consumer business is, but we’re looking at ways it will scale more easily and create higher-value solutions. The total addressable market for Commercial IoT is very different, and possibly even bigger than consumer. We see there is an opportunity here,” he said.
Jacobs was cautious about satellite-to-device connectivity on unmodified phones other than for short massaging but said there was a definite business model for a satellite operator with a global licence in place.
The company’s service revenue saw a 35 per cent increase in the fourth quarter of 2023, driven by a more than 100 percent increase in wholesale capacity service revenue. Despite a 30 per cent decrease in subscriber equipment sales during the same period, the company’s overall financial health improved. For 2024, Globalstar anticipates total revenue to be between $225 million and $250 million.