Both Globalstar + Hughes Will Be Well Grounded

Globalstar, Inc. (MASDAQ:GSAT) has signed an agreement with Hughes Network Systems, LLC (HUGHES). According to the contract, Hughes will work with Globalstar to develop a proprietary satellite air interface and will deliver the nexgen ground network equipment and software upgrades for installation at Globalstar’s satellite gateway ground stations. Globalstar expects that the ground network, combined with its 2G satellite constellation scheduled to be launched during Q2 of 2009, will provide Globalstar with the ability to offer advanced wireless voice and high-speed IP Multimedia Subsystem (IMS) services, as well as seamless handoffs to terrestrial networks using multi-mode user terminals. In addition to $75.1 million of ground network upgrades, Hughes will also design and supply Globalstar with approximately $25.7 million of satellite interface chips. These chips will be used to provide satellite capability to various nexgen Globalstar handsets, fixed units, and modem-equipped transceivers and transmitters. Globalstar also expects to provide these chips to various manufacturers of terrestrial wireless devices to provide Globalstar with the ability to offer device manufacturers the chips needed for Globalstar satellite compatibility for as little as $10 per chip.

Globalstar’s unique network architecture uses low-earth-orbit (LEO) satellites and multiple gateways to provide customers with localized access and superior voice quality with virtually no latency or delay when transmitting voice or data. Because Globalstar’s ability to provide new services is based primarily on its ground network, adapting to emerging technologies and accommodating future wireless standards is fundamentally dependant on the Company’s ground segment. The new ground network is designed to support speeds of 1Mbps to the subscriber equipment and 256 Kbps to the satellites with a flexible all Internet protocol (IP) implementation. As Globalstar will also retain the operating 1G ground network at its gateways, it plans to continue providing backwards compatibility to the more than 293,000 current Globalstar subscribers.