Apple To Gain a 20% Stake in Globalstar
Globalstar advised in a regulatory filing that Apple will invest $1.5 billion in its operations.
Apple will invest $1.1 billion in progressive cash payouts to help Globalstar pay down debt and invest in its mobile satellite services (MSS). In the SEC filing, Globalstar states it will use the investment to expand services “including a new satellite constellation, expanded ground infrastructure, and increased global MSS licensing.”
Neither Apple nor Globalstar commented on what specific new services iPhone users could expect from this expansion, nor in which time frame.
Apple will also invest $400 million in equity to acquire a 20% stake in Globalstar.
Globalstar will retain complete control of its board of managers and fully own its assets and licenses: “Globalstar will retain 100% of all terrestrial, MSS, and other revenue.”
The terms lay out that Globalstar will continue to allocate 85% of its network capacity to Apple “across existing and new satellites” and will use the remaining capacity for its other customers.
Following the announcement, Globalstar shares jumped over 30% to $1.38, while Apple shares dropped slightly, by 1.33% to $222.91.
Apple first invested in Globalstar in 2022, when it leveraged Globalstar’s constellation of satellites to provide access to emergency text services in remote areas where land-based networks were not available.
The current Globalstar network of satellites expands coverage and reduces latency compared to traditional satellite providers. However, it is limited to text-based services.
In 2022, Apple agreed to invest in Globalstar to upgrade its satellite constellation for voice and broadband services. This agreement led Canada’s MDA to secure a $327 million contract to build 17 satellites. SpaceX plans to launch the satellites next year.
