Globalstar’s announcement of satellite problems may have serious
consequences for users of mobile satellite services
MENLO PARK, Calif., Feb. 6 -- Telecom, Media and Finance Associates,
Inc. (TMF Associates), the specialist Mobile Satellite Services consulting
firm, today forecast that Globalstar’s announcement in an SEC filing that its
low earth orbit (LEO) satellites may be unable to support two-way voice
services by "some time in 2008", will cause major upheaval in the mobile
satellite services (MSS) market.
TMF Associates forecast in a research note published in January 2007 that
the next 18 months would represent a critical window of opportunity for
Globalstar to take advantage of its very attractive new GSP-1700 handset
and grow its handheld user base substantially. At present, no handheld MSS
services are available in North America with a comparable handset size and
service cost to Globalstar. However, other operators, including Inmarsat
and ICO, will launch directly competitive voice services in the North
American market during 2008.
Tim Farrar, author of the note, commented "Globalstar derives the vast
majority of its revenues from providing two-way voice services in North
America. The company has expanded rapidly by offering low cost services
and terminals, and by our estimate has a roughly 80% market share of the
150,000 MSS voice handsets in use within North America. Faced with the
prospect that Globalstar’s current satellites may no longer be able to
support voice services by sometime in 2008, and that these services will
remain largely unavailable until a new constellation is launched in 2009-
2010, users may need to look elsewhere for a reliable MSS voice service.
Fortunately, Inmarsat is currently in the process of deploying a handheld
voice service on its new generation of satellites, which provide global
coverage, and we expect it to offer service in the US by the middle of
2008. Two dedicated North American systems, ICO and Terrestar, also
plan to launch handheld MSS services across the region during 2008, and
are expected to offer relatively low service costs and support small, low
cost handsets. As a result, while any suspension of Globalstar’s voice
service will certainly prove problematic for its existing customer base, other
competing services will clearly benefit from this upheaval. Hopefully these
operators will be able to move forward with their plans on a timely basis,
and will thereby limit the amount of disruption experienced by MSS users."
TMF Associates’ analysis of Globalstar and the implications of this
announcement are available to subscribers to the company’s information
service on the Mobile Satellite Services (MSS) sector. More details are
available at http://www.tmfassociates.com/reports.
TMF Associates, headquartered in Menlo Park, California, is a leading
consulting and research firm providing business and technical analysis in
satellite, wireless and broadband telecommunications. The firm specializes
in Mobile Satellite Services, including Ancillary Terrestrial Component
(ATC) technology, and works with operators, investors and equipment
manufacturers to analyze complex market issues. For additional information,
please visit http://www.tmfassociates.com.
CONTACT: Tim Farrar, President, Telecom, Media and Finance
Associates, Inc., 650-839-0376 or firstname.lastname@example.org