Globalstar USA, in desperate need of some debt relief, announced it launched Globalstar Data Services, which will provide 9,600 bit per-second Internet connectivity for the same per-minute rate as voice service.
Customers can use a Globalstar phone like a wireless modem. The current model Globalstar GSP-1600 phone from Qualcomm Inc. attaches via a data cable to a laptop computer or personal digital assistant, enabling applications such as Web access, e-mail and instant messaging, all for about $1.50 per minute, the company said.
“Data is a significant advance in Globalstar’s capability, and I expect that new and creative alternative uses will develop for this technology in the future,” said Dennis McSweeney, vice president and general manager for Globalstar USA.
These developments could include telemetry applications such as fleet tracking and management. McSweeney also expects the data rates to improve, although he could not give a specific time line.
Making a data play is anticipated to draw in more customers and increase minutes of use, which hopefully will help nudge the company out of the red.
“It’s something that in customer focus groups we’ve heard is a high-demand item,” McSweeney said.
The financial woes of Globalstar during the past few months have been well chronicled. The company reported disappointing third-quarter results, including only 21,300 subscribers, well below the 1.6 million analysts predicted Globalstar would need to break even, and the 500,000 the company estimated it needed to cover costs.
At that time, Loral Space & Communications Ltd., which holds a 40-percent stake in the company, said it would not provide any more funding. Loral came through shortly thereafter, however, with an additional $500 million in relation to a bank loan it had guaranteed.
“The objective of our recent financing was to put sufficient resources in place now to allow Globalstar to continue the deployment of its service through May 2001, at which time Globalstar is expected to have proven its viability, allowing it to further fund itself as required,” said Bernard Schwartz, chairman and chief executive officer of Globalstar Telecommunications Ltd., in a response to the company’s third-quarter earnings.
Analysts, however, are wary. One described Globalstar as “facing a big choke hold in terms of too much debt.” Analyst firm Wit SoundView Corp. listed Globalstar among several mobile satellite companies that have failed, and although this is not the case, the company faces a long road ahead.
McSweeney emphasized Globalstar’s established network and its head start over other players in the industry.
“The bottom line for us is that we’ve got 48 satellites in the sky and they are data ready,” McSweeney said.
Programming modifications already have been made to gateways in Alberta and Ontario, Canada, and in Clifton, Texas, and Cabo Rojo, Puerto Rico. This provides data coverage for the continental U.S., Canada and the Caribbean.
Customers must purchase a special kit to enable their device to receive data. The suggested price for the kit is around $70, although it is up to the individual dealer to determine the price, said Globalstar.
