Globalstar experienced a significant increase in its stock price after Apple announced a $1.7 billion investment in the satellite operator.
Globalstar has been using its existing network of 31 L-band satellites to provide emergency services for iPhone users. However, the current capabilities only include basic texting and do not support voice calls and broadband internet.
Apple's investment in Globalstar aims to develop a new satellite constellation to improve space-based communication capabilities for iPhones. If the deal proceeds as planned, Apple will acquire a 20% equity stake in the constellation for $400 million and provide staggered cash prepayments totaling $1.1 billion to support the network's funding. Additionally, Apple will provide approximately $232 million to refinance Globalstar's debt.
Apple has been covering the costs of replenishing Globalstar's satellite constellation since 2022. Globalstar has awarded a contract to Canada's MDA to construct new satellites, with SpaceX handling the deployment. The details of how iPhones will utilize the refreshed satellite constellation have not been disclosed.
Globalstar has committed to allocating 85% of its network capacity to Apple, while the remaining capacity will be used for its legacy business. This investment strengthens Globalstar's financial standing and technological capabilities, positioning it favorably against competitors. Other companies are also developing satellite constellations for cellular services, indicating a shift in how technology companies approach connectivity solutions.
The collaboration between Globalstar and Apple may lead to innovative applications and services that leverage satellite technology. As the demand for reliable and expansive coverage increases, this investment signals a new direction in connectivity solutions.