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September 20, 2012

Globalstar and Arianespace Sign Agreement over Launch Delay Costs

By Sujata Garud, TMCnet Contributor

Globalstar and Arianespace (News - Alert) have entered into an agreement regarding the additional amounts that Globalstar (News - Alert) will pay to cover costs associated with the delays experienced during three prior launch campaigns. This resolution allows Globalstar and Arianespace to complete the fourth launch campaign under their current Launch Services Agreement.

The mobile satellite voice and data services provider expects that satellite manufacturer Thales (News - Alert) Alenia Space will complete the pre-shipment reviews of the final six spacecraft purchased under the terms of the 2009 contract in the upcoming weeks in Rome. Once completed, the fourth launch campaign can begin. Due to available launch windows and the upcoming end-of-year holiday season, the fourth launch is now anticipated in early 2013. Globalstar will provide additional information regarding the specific launch date in the near future once its plans are confirmed with the launch participants.

Jay Monroe, chairman and chief executive officer of Globalstar, said, "We are only months away from completing the fourth launch of our second-generation satellites to re-establish Globalstar's preeminent position within the Mobile Satellite Industry. With our landline quality voice service, industry leading handset data speeds, high quality innovative M2M data solutions and low cost pricing plans, we are ready to mix it up in the MSS marketplace."

Recently, Globalstar signed yet another contract with satellite manufacturer Thales Alenia Space (TAS) for the manufacturing and delivery of six additional satellites for the Globalstar second-generation constellation. Globalstar and TAS are associated with each other from 2009. During early 2012, Globalstar and TAS signed a commercial proposal containing the basic terms for the purchase for these additional Spacecraft. The satellites have a design life of 15 years and will be technically identical to the twenty-four second generation spacecraft Globalstar ordered from TAS under their 2009 contract.

The six new satellites signed under this current contract will utilize approximately $15.6 million in Long Lead Items purchased by Globalstar under the previous agreement. The new contract also provides Globalstar an option to order as many as 24 more satellites in the future should consumer demand require additional capacity be added to the Globalstar System. The aggregate purchase price of these six spacecraft is noted to be approximately $195.8 million and TAS has committed to begin deliveries 29 months after the close of the financing. Globalstar expects to close the financing for this purchase by year end.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2012, taking place Oct. 2-5, in Austin, TX.  Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.

Edited by Rachel Ramsey

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