MILPITAS, Calif., Jan. 12, 2009 (GLOBE NEWSWIRE) -- Globalstar, Inc. (Nasdaq:GSAT), a leading provider of mobile satellite voice and data services to businesses, governments, and individuals, today announced that Open Range Communications Inc. has closed on its equity financing of $100 million from One Equity Partners (OEP), the private equity arm of JPMorgan Chase & Co. In March 2008, the United States Department of Agriculture's Rural Development Utilities Program (RDUP) approved a $267 million Broadband Access Loan for Open Range, with the prerequisite that private financing also be secured. The OEP investment satisfies the RDUP's loan terms, making the funds available to Open Range. Open Range can now commence deploying wireless broadband service in rural America under a spectrum lease agreement with Globalstar. The Federal Communications Commission (FCC) granted the necessary authority for the Ancillary Terrestrial Component (ATC) service in October 2008.
"Globalstar is the first mobile satellite services company to utilize its ATC spectrum authority to realize additional revenues by providing terrestrial wireless providers with a way to deliver their enhanced services both terrestrially as well as by satellite," said Jay Monroe, Chairman and CEO of Globalstar, Inc. Mr. Monroe added, "We are extremely excited about using our ATC spectrum to help Open Range meet the wireless broadband needs of un-served and underserved rural Americans and to give those Americans access to satellite connectivity when outside of Open Range's wireless footprint. We believe this agreement establishes a template for how our global spectrum may be used more efficiently to the benefit of Globalstar, our partners and our customers."
The spectrum lease agreement with Open Range provides Globalstar with an additional source of revenue. The initial lease down payment is approximately $2.2 million. With full utilization of Globalstar spectrum by Open Range, which covers only five percent of the US population, payments are expected to increase to $10.1 million in year six of the agreement. The total amount of the payments made to Globalstar will depend on a number of factors, including the eventual geographic coverage of, and the number of customers on the Open Range system.
"The timing of our initiative couldn't be better," said Bill Beans, Jr., Chairman, CEO and Founder of Open Range. "The success of this financing is a testament to the powerful opportunity offered by the promise of WiMAX technology, the strength of my team and our resolve to execute on the plan for wireless broadband in rural America. We consider this a brilliant achievement by Open Range and our partners in what is clearly one of the most challenging financing markets in recent history."
Open Range has announced plans to offer affordable dual mode mobile satellite based and high-speed broadband Internet and voice services to more than six million citizens in 546 underserved and rural communities, using WiMAX technology, within five years. The WiMAX terminals will be satellite-capable, and customers outside of the WiMAX coverage area will be able to use Globalstar service over the satellites. Open Range expects to deploy its infrastructure in the first group of markets later this year.
About Globalstar, Inc.
With over 325,000 subscribers, Globalstar is the world's largest provider of mobile satellite voice and data services. Globalstar offers these services to commercial and recreational users in more than 120 countries around the world. The Company's products include mobile and fixed satellite telephones, simplex and duplex satellite data modems and flexible service packages. Many land based and maritime industries benefit from Globalstar with increased productivity from remote areas beyond cellular and landline service. Global customer segments include: oil and gas, government, mining, forestry, commercial fishing, utilities, military, transportation, heavy construction, emergency preparedness, and business continuity as well as individual recreational users. Globalstar data solutions are ideal for various asset and personal tracking, data monitoring and SCADA applications.
For more information regarding Globalstar, please visit Globalstar's web site at www.globalstar.com.
About Open Range
Open Range is a broadband wireless provider using WiMAX technology to deliver wireless broadband to un-served and underserved rural American communities. Open Range plans to deliver portable and eventually mobile voice and Internet services to customers within its robust WiMAX footprint. Within the next five years, Open Range intends to serve 546 communities, making its services initially available to approximately six million people. Open Range's wireless broadband network solution will connect customers through licensed spectrum, enabling communities to improve safety, economic growth, education, and quality of life and to remain competitive in the age of constant communications. For more information, visit www.openrangecomm.com.
Safe Harbor Language for Globalstar Releases
This press release contains certain statements such as, "With full utilization of Globalstar spectrum by Open Range, which covers only five percent of the US population, payments are expected to increase to $10.1 million in year six of the agreement," that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond Globalstar's control, including demand for the Company's products and services; problems relating to the construction, launch or in-orbit performance of its existing and future satellites, problems relating to the ground-based facilities operated by it or by independent gateway operators; its ability to attract sufficient additional funding if needed to meet its future capital requirements; competition and its competitiveness vis-a-vis other providers of satellite and ground-based communications products and services; the pace and effects of industry consolidation; the continued availability of launch insurance on commercially reasonable terms, and the effects of any insurance exclusions; changes in technology; its ability to continue to attract and retain qualified personnel; worldwide economic, geopolitical and business conditions and risks associated with doing business on a global basis; and legal, regulatory, and tax developments, including changes in domestic and international government regulation.
Any forward-looking statements made in this press release speak as of the date made and are not guarantees of future performance. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements, and the Company undertakes no obligation to update any such statements. Additional information on factors that could influence Globalstar's financial results is included in its filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.