Q4 2022 Globalstar Inc Earnings Call
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Speaker 1: You.
Speaker 1: You.
Speaker 2: The conference will begin shortly. To raise and lower your hand during Q&A you can dial star 11.
Speaker 3: Good day and thank you for standing by. Welcome to the Global Star Fourth Quarter 2022 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you'll need to press star one one on your telephone.
Speaker 4: Thanks for joining Global Stars' fourth quarter in full year 2022 investor call.
Speaker 4: Please note that today's call contains forward-looking statements intended to fall within the safe harbor provided under the security laws.
Speaker 4: Factors that could cause the results to differ materially are described in the forward looking statements and risk factors section of the Global Stars SEC filings, including its annual report on form 10K for the financial year ended 2022 and in last week's earnings
Speaker 4: It's been some time since our last earnings call and we're pleased to be back at it.
Speaker 4: We have been busy developing, executing, announcing a long list of critical developments in the interim involving our spectrum, wholesale services, powerful long-term partnerships, and so much more.
Speaker 4: We also provided a full-up date in presentation during our investor day in November and plan to host similar events with the time as right.
Speaker 4: On this call and on future earnings calls, we plan to keep our prepared remarks comparatively brief, hitting the highlights for the prior periods and moving directly to Q&A. What's today? Dave Kagan, Rebecca Clary.
Speaker 4: Kyle Pickens and Tim Taylor will be available to answer your questions.
Speaker 4: As has been our policy even before September 17th, 7th announcement.
Speaker 4: We will not be able to answer questions about our wholesale business partner or any of their future services. Instead, we will focus on the other aspects of our business.
Speaker 4: But what we can say is that the September announcement is the foundation of the company's wholesale satellite plan.
Speaker 4: We will continue to execute our own satellite opportunities utilizing our retained capacity, including finalizing the work at 3GPP for our new NTN band class, which we expect to finish this September .
Speaker 4: Standardization with NPN allows for the proliferation of chipsets and devices able to operate on both satellite and terrestrial networks, greatly increasing the total addressable market for satellite connectivity.
Speaker 4: We will do this while maintaining the unique satellite assets which we operate today through fully licensed and protected spectrum in the L, S, and C bands.
Speaker 4: This wholesale business strategy allows Global Spark to generate contracted, consistent cash flow for the future, which will grow materially as new satellite assets are deployed in the coming years. We are close to announcing a new and exciting partnership to help utilize our available satellite capacity.
Speaker 4: On top of our wholesale effort, our core MSS business generates annual revenue in excess of $100 million, and is anchored by the legacy spot and duplex businesses. As we had expected, and as we have experienced, the major growth driver for our MSS core business
Speaker 4: is Commercial IoT, which will soon benefit from the introduction of our very first two-way IoT product, launching later this year.
Speaker 4: We continue to believe in this significant growth opportunity and have appropriately added to the CAME to help close sales.
Speaker 4: Our terrestrial spectrum assets have continued to develop well with two major announcements in just the last week.
Speaker 4: First, the successful completion of terrestrial authority for Pan-53 in Spain, our first in Europe , which had foreshadowed many more licenses there.
Speaker 4: Spain represents the 11th National Authorization across four continents.
Speaker 4: Secondly, yesterday we announced our new collaboration with Qualcomm.
Speaker 4: As additional national authorization, authorizations are secured. We view this as an increasingly borderless spectrum resource.
Speaker 4: The strategic agreement with Qualcomm introduces Band 53 into the full Qualcomm RF ecosystem and sales network, including both the chipset and the front end.
Speaker 4: This is important for rapid adoption of the small cell infrastructure for private wireless 5G networks.
Speaker 4: Qualcomm calls it the FSM platform and its availability will substantially increase the number of radio vectors rolling out band 53.
Speaker 4: The FSM is expected to be introduced this summer.
Speaker 4: Qualcomm will also encourage the use of Band 53 via their global mobile chipset business.
Speaker 4: the world's largest so that the widest range of new smartphones, laptops, and other 5G devices will be enabled with Band 53 and offered globally.
Speaker 4: The agreement with Qualcomm further positions global start to monetize our spectrum across multiple commercial channels. Partners will be able to access these products through a rapidly expanding ecosystem with global start and Qualcomm jointly working through Qualcomm's global network of system integrators or SIs.
Speaker 4: to offer Qualcomm's suite of solutions for Band 53.
Speaker 4: Together with these SIs, GlobalStar can deploy Spectrum in support of new 5G network solutions in the U.S. and in any other country where we have or obtain terrestrial authority.
Speaker 4: This announcement represents a continuation of the company's effort to expand BAM-53 ecosystem, following the initial agreement with Qualcomm to support us in their prior Snapdragon modems.
Speaker 4: We are in negotiations with terrestrial users representing hundreds of millions of dollars of annual spectrum leases for band 53.
Speaker 4: On the financing front, we're pleased to sign the agreements we did last week, which were announced in the 8K. And this was accomplished without delusion. And we are currently working to complete the conditions precedent, including the recent financing of the remaining first-line facility in the very near future.
Speaker 4: with an improved capital structure and accelerating cash flow. Global Stars share holders are well positioned to realize the value of the opportunities at hand.
Speaker 4: concluding my remarks today.
Speaker 4: 2022 represented a significant improvement in the company's financial results, including Revenue Increasing 19% and Adjusted Ebedaw Increasing 48%.
Speaker 4: Commercial IoT growth is accelerating, and we believe this growth will accelerate again with the introduction of our two-way module later this year.
Speaker 4: Entering the two-way market will close the gap versus competitive alternatives and allows us to attack a large existing market within established OEM distribution channels. This is a massive opportunity for global start and we will continue evolving our IoT products and service offerings as IoT connectivity becomes more and more critical across.
Speaker 4: to our activities in the direct to hands of Mark. And we thank you in advance for focusing your questions on the other part of our business and our financial results.
Speaker 3: Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.
Speaker 3: Our first question comes from Simon Flannery with Morgan Stanley . You may proceed.
Speaker 5: Great, thank you very much. Good morning and thanks for doing the call.
Speaker 5: I was wondering if you could just talk to your prior 2023 guidance and any more updates or color you could provide to that. And particularly any comments around CAPEX and comments around free cash flow to what extent the revenues will be coming out of your deferred revenue balance versus new additional cash inflows.
Speaker 6: Sure Simon, it's Rebecca, good morning.
Speaker 6: So our 2020 guidance that we issued in September and we affirmed that believe is our third quarter earnings release in November , we still feel confident about that revenue range of 185 to 230. There's nothing that has changed or that would have impacted those.
Speaker 6: projections from the prepaid agreement that we signed last week. So, CapEx though has changed obviously, so now we're committed to funding about 250 million of the CapEx for the new satellite.
Speaker 6: through primarily operating casulas. And so that will be funded over the next couple of years. And then on the favorable side, we are saving quite a bit of interest by not having to raise 500 million of standard debt at astronomical rates, as you guys know.
Speaker 6: depending on the assumptions, we're saving upwards of $150 million over the construction period. But again, offsetting that from just a cash flow perspective, we're spending $250 million in CapEx. That is a timing issue, just in terms of the repayment of that CapEx investment.
Speaker 6: will come to us over the Phase II service period after those satellites are launched. So again, it's an upfront investment and just a timing and cash flow issue.
Speaker 5: And anything on what your revenue is, how do you use the deferred revenue balance this year? Is that going to grow this year or decline?
Speaker 6: So we still have to do a little bit of study and then the gap to figure out how the new prepayment will work as far as if that will be deferred revenue or debt classification on our balance sheet, but regardless it will turn into revenue when we earn it over the things to service areas. Now the $94 million that we received in prior years.
Speaker 5: that is sitting in deferred revenue, that will be recognized over the service period that started in November . Right. And it's been about a year since you signed the deal with MDA to build the new constellation. Could you update us on the progress on the manufacturing of the satellites? I think you said before delivery and launch by the end of 25. Is that still looking good?
Speaker 4: He and he.
Speaker 7: So, you know, we use...
Speaker 7: been working on the contract. One year anniversary was a few weeks ago, so we're a little over 12 months into it. And you know, a major milestone in the first year of the construction contract is the completion of PDR, which is the preliminary design review.
Speaker 7: That happened a few months ago and that's the initial design leading up then for a period of about 8 months or 9 months until you get to the critical design review. So we're on schedule, on budget and lined up well for
Speaker 7: launches in 2025.
Speaker 5: Great. Good to hear. And then just one last one, the FCC seems to be taking an active interest in the satellite terrestrial intersection. Could you just talk about how you see what's been proposed as a position in global stars position, well, to competitors?
Speaker 4: Yeah, I can take that. Generally speaking, Simon, you know, there are a number of changes that are going on in the industry right now and everybody is watching those. And so the FCC will have to address a series of regulatory.
Speaker 4: issues related to that. Obviously, a global star is a heavy user of all of its satellite spectrum, especially under our new arrangements. And so it's unlikely that we will have.
Speaker 4: any direct action that I think will be, that will survive the FCC process if someone wants to mount something to utilize ours. But generically, there are changes that will happen in the industry over the next year or so that the FCC will have to wrestle with, for instance.
Speaker 4: How will SpaceX and chemo deal with their with their spectrum questions in front of the FCC and there are a number of those. So we anticipate ongoing discussions that will take place and ongoing regulatory proceedings.
Speaker 4: which of course, were extremely cognizant of every single day. And given that we have globally harmonized spectrum, our issues will be, I think, issues that are not settled only within the FCC context, but more power.
Speaker 4: 25 years of history of operating on a global basis and therefore in front of the ITU for in a lot of cases.
Speaker 5: Great, thanks a lot.
Speaker 8: Thank you.
Speaker 3: Our next question goes from Jordan Sutton with Craig Hallum Capital. You may proceed.
Speaker 9: Thank you. Jay, at the analyst day, and by the way, thanks for doing this call, I think it's great. So at the analyst day, you had suggested the potential for a significant agreement with a new partner you were hoping by your end. You reiterated that this morning, I believe. Can you just give us any sort of update on the progress you're making towards this partnership and what we should be expecting?
Speaker 4: George, no doubt you read one of those, yes, or actually two of them in the last week.
Speaker 4: We're constantly looking to expand our terrestrial footprint. Spain was a very important part of that. And of course, now we'll proceed across the continent with many more of those types of authorization. That's the foundation by which you roll out terrestrial.
Speaker 4: Then there are other categories of relationships that we are penacing right now and trying to bring to a conclusion.
Speaker 4: Those include leases for the terrestrial spectrum, as well as new business models for our retained satellite capacity.
Speaker 4: All of those were alluded to in the investor day that we had, some of which those two that I mentioned have come to fruition now, but I think we can look forward to more in the near term, which are both terrestrial.
Speaker 4: of those were alluded to in the investor day that we had, some of which those two that I mentioned have come to fruition now, but I think we can look forward to more in the near-charps, which are both terrestrial and satellite.
Speaker 9: Gotcha. And perhaps the next question is best for Rebecca, but the refinancing of the first lean facility, can you just give us a sense of how that's being marketed or what the structure we should be expecting from that to be? Museum of Cardiology
Speaker 6: We've been working with Goldman for quite a few months. This is challenging environment, as you guys know. And so I know it's taken a little bit longer than some of you would like, but as we demonstrated last week, where obviously have the shareholder value at.
Speaker 6: as our most fundamental priority. And if it takes more time to get it done, we're gonna take more time to get it done. And there were a few days away from this upcoming deadline, but hopefully have some faith in us. So while we are not prepared to make an announcement right now as far as the exact...
Speaker 6: form or size or timing. Just know that we're working every day on it and we've got options at the table that we think are favorable to the company and we hope to have something soon. Fabulous. And last, Jay, the concept of borderless spectrum...
Speaker 9: is quite unique. What are the best types of use cases that you would suggest?
Speaker 9: unique. What are the best types of use cases that you would suggest? Hmmm. Wirzies. So, go to the warehouse.
Speaker 10: Yeah, hey George. So you know look I think there are a lot, a number of large multinational companies that have operation.
Speaker 10: you know, in various geographies where we have trust real rights. And so, you know, the ability, you know, through a partnership like we have now with, or a strategic collaboration with, that we have with Qualcomm, you know, we'll be able to go to those types of parties and say, here is a solution that works seamlessly across all of your operations. That's, you know, I think that'll be very attractive to a variety of different industries, you know, including OEM.
Speaker 10: that the terrestrial opportunity is several hundred million dollars, many hundreds of millions of dollars a year in potential lease revenue. We think that the Qualcomm agreement that we've announced yesterday really moves us dramatically forward in that effort.
Speaker 10: I don't even know the last, the release that we did this, but a while ago we talked about how this, you know, the process to get terrestrial spectrum where it's, you know, deployable. This, this agreement and the work that Qualcomm is going to do is really kind of the last step in the development of the ecosystem.
Speaker 11: and we're very excited to see how, you know, now that we'll soon have completely, you know, a solution that we can offer to the world, how fast that starts to grow. I mean, I'm starting to think of, you know, how do we manage, you know, kind of the inflow of opportunities, where, you know, until today that's really been, how do we, how do we get to?
Speaker 12: get the ecosystem to the point where we can start to do that.
Speaker 13: Perfect. Thank you very much. Thank you.
Speaker 14: Our next question comes from Mike Crawford. It would be Riley Securities. He may proceed.
Speaker 15: Thank you. Just could have continued on that last topic in the earlier statement that you're in negotiations on hundreds of millions of terrestrial spectrum releases. Can you break that out that opportunity out by geography?
Speaker 16: J.D., you want to take that or you want me to? No, quiet, pal.
Speaker 17: J.D., you want to take that or let me take that? That's way out. Yeah, so it's...
Speaker 18: There are a lot of different opportunities that were in various stages of negotiation in in terms of you know I don't want to get too specific on any of them But you know to get to the hundreds of millions of dollars That would definitely implicate the United States
Speaker 19: But, you know, it also could be global. So there's a variety of different opportunities at various stages and cumulatively they add up to quite a large number.
Speaker 20: but I can't. It's just the lyrics right now.
Speaker 21: And given your ongoing satellite operations.
Speaker 22: So what's your band 53? Is this something that really needs to be least or is would there be a...
Speaker 23: or any of these discussions.
Speaker 24: turning towards possible sale of the spectrum or could you even do that and still operate your satellite business?
Speaker 25: But, you know, it's hard for us to sell the spectrum in kind of the traditional sense. There's lots of different ways that leases can be structured, but, you know, all of the conversations are around, you know, leasing the spectrum.
Speaker 26: So, anterics likes to qualify its pipeline in terms of three stages.
Speaker 27: Antirox likes to qualify its pipeline in terms of three stages.
Speaker 28: What kind of early, middle, and final stage that is the zoning classification of that sort you could do? Yeah, it's hard for us to do that at this point. I mean, I feel like
Speaker 29: Often we feel like we're towards the very end of things and then they drag out and then people get disappointed. So there's...
Speaker 30: We have a lot, you know, we're in 11 different countries. We've got, you know, a fully-cooked system. I think there are a tremendous amount of opportunities ahead of us, but it's, I don't want to.
Speaker 31: in 11 different countries, we've got a fully-cooked system. I think there are a tremendous amount of opportunities ahead of us, but I don't want to.
Speaker 32: Start to get to refined on on where we are in the pipeline. Yeah, okay, and then just just switch topic so
Now that you've finished a preliminary design review of the constellation, can you share any of the characteristics of what kind of power, output, output capacity, the abilities will be...
You'll be expecting from the replacement constellation. Yeah, and fortunately, Mike, we won't get into.
too many of the statistics there. You know, we have said that the main point of launching these satellites is for the continuation of the service and that we were not ever planning on taking any major technical risk. So beyond that though, the specs.
And in all details of the satellites, you know, payload and dust, that's not something that we're going to be discussing at this time.
Okay, thank you very much. Thank you. As a reminder to ask a question, you will need to press star 1-1 on your telephone.
Our next question comes from Jason Bernstein with Cantor. You may proceed.
Hi guys, thanks for doing the call and congrats on a really transformational year. Just had one, a couple questions actually around the new Qualcomm news.
doing the call and congrats on a really transformational year. Just had one, a couple questions actually around the new Qualcomm news.
Could you sort of simply, is there a revenue opportunity through Qualcomm? Are they going to go out and sell the ecosystem and potential revenues come through there? Or people sort of buy the small cell ecosystem and then come to Global Star to lease the spectrum? I guess.
Are there a revenue opportunity to do Qualcomm? Are they gonna go out and sell the ecosystem and potential revenues come through there? Or people sort of buy the small cell ecosystem and then come to Global Star to lease the spectrum? Maybe that's for Kyle.
Yeah, so the way that it works, so Qualcomm has been working on a, you know, a complete solution for private networking for a while now. And they look at this as, you know, the ability to have a spectrum resource that goes across borders is very attractive to them, I believe.
So the way that it'll work, you know, they're doing all of the engineering to make sure that the chipsets work, they'll do all of the interoperability work to make sure devices and the radios work together. And then they're going to go, you know, with us, but, you know, they have a global...
They're obviously a huge company with global reach and they'll go to their system integrator partners and say, you know, here is a full solution with spectrum and all the equipment that you would need for whatever private network you're wanting to deploy. And so then those system integrators would work with us.
on a case by case basis to work, you know, to do the licensing agreement and the lease. So the revenue is, we'll be coming from, you know, other parties, not from Qualcomm. Qualcomm will get revenue from selling equipment and we'll get lease revenue from the people that they introduce us to. So, you know, we'll be coming from, you know, to do the licensing agreement and the lease.
And one more if I could. And the 10K is aligned on the Germany and larger constellation applications being accepted by the ITU. Is that a separate – when you say larger satellite constellation than we have today, is that the 17 satellites MDA is working on or is that a –
concludes the Q&A session. I'd now like to turn the call back over to Jay Munro for any closing remarks.
Thank you all for joining today. We appreciate the attendance from investors, analysts, and others, and look forward to doing this again. As always, we are available for follow-up questions for those who ask questions today and want to go deeper.
and always, of course, talking to our investors.
anytime you want to reach out to us. Thank you very much for joining. Look forward to doing it again soon with more important news. Thank you. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
The conference will begin shortly. To raise and lower your hand during Q&A, you can dial star 11. chart 1
So you.
The conference will begin shortly. To raise and lower your hand during Q&A, you can dial star 1-1-1.
The conference will begin shortly. To raise and lower your hand during Q&A you can dial star 1-1.
You.
I have you.
Good day and thank you for standing by. Welcome to the Global Star Fourth Quarter 2022 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you'll need to press star one one on your telephone.
You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jay Munro, Executive Chairman. Thanks for joining Globalstar's fourth quarter and full year 2020.
C-Filing, including its annual report on Form 10K for the financial year ended 2022 and in last week's earnings release.
It's been some time since our last earnings call and we're pleased to be back at it.
We have been busy developing, executing, announcing a long list of critical developments in the interim involving our Spectrum, wholesale services, powerful long-term partnerships, and so much more. We also provided a full update in presentation during our investor day in November and planned to have similar events with the time is right.
On this call and on future earnings calls, we plan to keep our prepared remarks comparatively brief, hitting the highlights for the prior periods and moving directly to Q&A when today Dave Kagan, Rebecca Clary, Kyle Pickens, and Tim Taylor will be available to answer your questions. As has been our policy even before September 17th announced
to execute our own satellite opportunities, utilizing our retained capacity, including finalizing the work at 3GPP for our new NTN band class, which we expect to finish this September .
Standardization with NPN allows for the proliferation of chipsets and devices able to operate on both satellite and terrestrial networks, greatly increasing the total addressable market for satellite connectivity.
We will do this while maintaining the unique satellite assets which we operate today through fully licensed and protected spectrum to meet NL, S, and C-Mans. This wholesale business strategy allows global start to generate contracted, consistent cash flow for the future.
which will grow materially as new satellite assets are deployed in the coming years.
We are close to announcing a new and exciting partnership to help utilize our available satellite capacity. On top of our wholesale effort, our core MSS business generates annual revenue in excess of $100 million, and is anchored by the legacy spot and duplex businesses. As we had expected, and as we have experienced.
The major growth driver for our MSS core business is commercial IoT, which will soon benefit from the introduction of our very first two-way IoT product, launching later this year.
We continue to believe in this significant growth opportunity and have appropriately added to the came-to-help closed sales. Our terrestrial spectrum assets have continued to develop well with two major announcements in just the last week.
First, the successful completion of terrestrial authority for Pantythi Triens fame, our first in Europe , which should foreshadow many more licenses there. Spain represents the 11th National Authorization across four continents. Secondly,
Yesterday, we announced our new collaboration with Qualcomm. As additional national authorizations are secured, we view this as an increasingly borderless spectrum resource.
The strategic agreement with Qualcomm introduces Band 53 into the full Qualcomm RF ecosystem and sales network, including both the chipset and the front end.
This is important for rapid adoption of the small cell infrastructure for private wireless 5G networks.
Qualcomm calls it the FSM platform and its availability will substantially increase the number of radio vectors rolling out band 53.
The FSM is expected to be introduced this summer. Qualcomm will also encourage the use of Band 53 via their global mobile chipset business, the world's largest, so that the widest range of new smartphones, laptops, and other 5G devices will be enabled with Band 53.
offered globally. The agreement with Qualcomm further positions GlobalStar to monetize our spectrum across multiple commercial channels. Partners will be able to access these products through a rapidly expanding ecosystem with GlobalStar and Qualcomm jointly working through Qualcomm's global network.
of system integrators or SIs to offer Qualcomm's suite of solutions for band 53.
Together with these SIs, Global Stark and Deploy Spectrum in support of new 5G network solutions in the U.S. and in any other country where we have or obtained terrestrial authority. This announcement represents a continuation of the company's effort to expand BAM53 ecosystem following the initial agreement with WALCOM to support us in their prior Snapdragon modems
We are in negotiations with terrestrial users representing hundreds of millions of dollars of annual spectrum leases for band 53.
On the financing front, we're pleased to sign the agreements we did last week, which were announced in the 8K, and this was accomplished without dilution. And we are currently working to complete the conditions precedent, including the refinancing of the remaining first lien facility in the very near future. With an improved capital structure and accelerating cash flow, Globalstar shareholders are well positioned to realize the value.
this growth will accelerate again with the introduction of our two-way module later this year.
Entering the two-way market will close the gap versus competitive alternatives and allows us to attack a large existing market within established OEM distribution channels. This is a massive opportunity for global start and we will continue evolving power, IoT products and service offerings as IoT connectivity becomes more and more critical across industrial use cases.
We will now open up the call to Q&A, including the availability of Dave, Rebecca, Kyle, and Tim. Please direct questions to whomever you prefer. We remind you that we are not able to answer questions related to our activities in the direct-to-hands landmark.
And we thank you in advance for focusing your questions on the other part of our business and our financial results.
Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.
All right, first question goes from Simon Flannery with Morgan Stanley . You may proceed. Great. Thank you very much. Good morning. Thanks for doing the call. I was wondering if you could just talk to your prior 2023 guidance and any more updates or color you could provide to that.
And particularly any comments around CAPEX and comments around free cash flow to what extent the revenues will be coming out of your deferred revenue balance versus new additional cash inflows.
Sure, Simon. Tribeca, good morning.
So our 2020 guidance that we issued in September and we have found that believe is our third quarter earnings release in November , we still feel confident about that revenue range of 185 to 230. There's nothing that has changed or that would have impacted those projections from the pre-pay agreement that we signed last week.
And then on the favorable side, we are saving quite a bit of interest by not having to raise 500 million of senior debt at astronomical rates as you guys know. So, you know, in Japan, the assumptions were saving upwards of 150 million over the construction period. But again, not spending that from the Cacheflow perspective, we're spending 250 more in cat-cats.
That is a timing issue, just in terms of the repayment of that cat-backed investment will come to us over the Phase II service period after the satellite is launched. So again, it's an up front up front investment and just a timing-to-hash low issue. And anything on what your revenue is, how do you use the deferred revenue?
$34 million that we received in prior years that is sitting in deferred revenue that will be recognized over the service period that started in November .
Right. And it's been about a year since you signed the deal with MDA to build a new constellation. Could you update us on the progress on the manufacturing of the satellites? And I think you said before delivery and launch by the end of 25. Is that still looking good?
Yeah, yes, I'm happy to have you back. Simon, go ahead. So, you know, we've been working on the contract. One year anniversary was a few weeks ago. So we're a little over 12 months into it. And, you know, a major milestone.
In the first year of the construction contract is the completion of PDR, which is the preliminary design review, that happened a few months ago. And that's just the initial design leading up then for a period of about eight months or nine months.
until you get to the critical design review. So we're on schedule, on budget, and lined up well for launches in 2025. Great. Good to hear. And then just one last one. The FCC seems to be taking an active interest in the...
the satellite's terrestrial intersection. Could you just talk about how you see what's been proposed as a position of the global stars position relative to competitors?
Yeah, I can take that. Generally speaking, Simon, you know, there are a number of changes that are going on in the industry right now and everybody is watching those. And so the FCC will have to address a series of regulatory issues related to that. And so the FCC will have to address a series of regulatory issues related to that.
Obviously, a global star is a heavy user of all of its satellite spectrum, especially under our new arrangements. And so it's unlikely that we will have any direct action that I think will be that will survive.
How will SpaceX and chemo deal with their with their spectrum questions in front of the FCC? And there are a number of those. So we anticipate ongoing discussions that will take place and ongoing regulatory proceedings, which of course works extremely.
cognizant of every single day. And given that we have globally harmonized spectrum, our issues will be, I think, issues that are not settled only within the FCC context, but more our...
25-year history of operating on a global basis and therefore in front of the ITU for a lot of cases. Thanks a lot.
Thank you. Our next question goes from George Sudden with Craig Hallum Capital. You may proceed. Thank you. Jay, at the analyst day, and by the way, thanks for doing this call. So, at the analyst day, you had suggested a potential for a significant agreement with a new partner. You were hoping by your end. Thank you.
You reiterated that this morning, I believe. Can you just give us any sort of update on the progress you're making towards this partnership and what we should be expecting? George, no doubt you read. One of those, yes, are actually two of them in the last week. We're constantly looking to expand our terrestrial footprint.
are finessing right now and trying to bring to a conclusion. Those include leases for the terrestrial spectrum as well as new business models for our retained satellite capacity.
All of those were alluded to in the investor day that we had, some of which those two that I mentioned have come to fruition now, but I think we can look forward to more in the near-charps which are both terrestrial and satellite. Gotcha. And perhaps next question is best for...
Rebecca, but the refinancing of the first Lean facility, can you just give us a sense of...
how that's being marketed or what the structure we should be expecting from that to be? Sure, so you know, and it's been, we've been working with Goldman for quite a few months. It's a challenging environment as you guys know. And so I know it's taken a little bit longer than some of you would like, but as we demonstrated last week,
where obviously have the shareholder value as our most fundamental priority. And if it takes more time to get it done, we're going to take more time to get it done. So, you know, I know we're a few days away from this upcoming deadline, but hopefully have some faith in us.
So while we are not prepared to make an announcement right now as far as the exact form or size or timing, just know that we're working every day on it and we've got options at the table that we think are favorable to the company and we hope to announce something soon.
Fabulous. And last, Jay, the concept of borderless spectrum is quite unique. What are the best types of use cases?
that he would suggest. So, oh, go ahead, Kyle. Yeah, hey, George. So, you know, look, I think there are a lot, a number of large multinational companies that have operations, you know, in various geographies where we have trust-real rights.
And so, you know, the ability through a partnership like we have now with or strategic collaboration with that we have with Qualcomm, you know, we'll be able to go to those types of parties and say here is a solution that works seamlessly across all of your operations. That's, you know, I think that'll be very attractive to a variety of different industries, you know, including OEMs, large equipment manufacturers, mining companies, transportation, you know, several different industries like that that we'll be going after.
One of the things that we've talked about in the past, I guess, may be cut off some questions at some point, but we've said that we think that the terrestrial opportunity is several hundred million dollars, many hundreds of millions of dollars a year in and potentially revenue.
We think that the Qualcomm agreement that we've announced yesterday really moves us dramatically forward in that effort. I don't even know the last – the release that we did this, but a while ago we talked about how this – the process to get terrestrial spectrum where it's deployable. This agreement and the work that Qualcomm is going to do is really kind of the last step in the development of the ecosystem, and we're very excited to see how now that we'll soon have completely.
You know, a solution that we can offer to the world, how fast that starts to grow. I mean, I'm starting to think of, you know, how do we manage, you know, kind of the inflow of opportunities, whereas, you know, until today, that's really been, how do we get to get the ecosystem to the point where we can start to do that? Perfect. Thank you very much. Thank you.
Our next question comes from Mike Crawford with B. Reilly Securities. You may proceed.
Thank you. Just going to continue on that last topic and the earlier statement that you're in negotiations on hundreds of millions of terrestrial spectrum leases. Can you break that opportunity out by a geography?
Jay, do you want to take that or let me take it? No, go ahead, Kyle. Yeah, so it's
There are a lot of different opportunities that were in various stages of negotiation in terms of you know I don't want to get too specific on any of them but you know to get to the hundreds of millions of dollars You know that would definitely implicate the United States
But it also could be global. So there's a variety of different opportunities at various stages and, key notably, they add up to quite a large number.
And given your ongoing
satellite operations. With your band 53 is this something that really needs to be leased or is would there be a
satellite operations. So what's your band 53? Is this something that really needs to be least or is would there be any of these discussions?
Turning towards possible sale of the spectrum, where could you even do that, what still operate your satellite business? You know, it's hard for us to sell the spectrum in kind of the traditional sense. There's lots of different ways that leases can be structured, but all of the conversations are around leasing the spectrum. So, you know, it's hard for us to sell the spectrum in the traditional sense.
So, Antirix likes to qualify its pipeline in terms of three stages.
So, Antirix likes to qualify its pipeline in terms of three stages.
What kind of early, middle, and final stage? Is there any clarification of that sort you could do? Yeah, it's hard for us to do that at this point. I mean, I feel like often we feel like we're towards the very end of things and then they drag out and then people get disappointed. So, you know, there's...
We have a lot, you know, this, we're in 11 different countries. We've got a full ecosystem. I think there are a tremendous amount of opportunities ahead of us, but it's I don't want to. You know, kind of start to get too refined on.
on where we are in the pipeline. Okay, and then just a switch topic. So now that you've finished preliminary design review of the constellation, can you share any of the...
characteristics of what kind of power, output, reflect capacity, say the bill is will be expecting from the replacement constellation.
Yeah, and unfortunately, Mike, we won't get into too many specific there. You know, we have set at the main point of launching the satellites is for the continuation of service. And that, you know, we were not ever planning on taking any major technical risk.
So, beyond that, though, the specs and all details of the satellites. Payload and dust, that's not something that we're going to be discussing at this time. Okay, thank you very much. Thank you and as a reminder to ask a question, you will need to press star 11 on your telephone. **** dip time for checkout Cause Slide DOT com.
Our next question comes from Jason Bernstein with Cantor. You may proceed. Hi guys. Thanks for doing the call and congrats on a really transformational year. Just had a couple questions around the new Qualcomm news.
Jason Bernstein with Cantor, he may proceed. Hi guys, thanks for doing the call and congrats on a really transformational year. Just had a couple questions actually around the new Qualcomm news.
Could you sort of simply, is there a revenue opportunity through Qualcomm? Are they going to go out and sell the ecosystem and potential revenues come through there? Or people sort of buy the small cell ecosystem and then come to Globalstar to lease the spectrum? I guess maybe that's for Kyle. Yeah. So the way that it works. So Qualcomm has been working on a.
you know, a complete solution for private networking for a while now. And they look at this as, you know, the ability to have a spectrum resource that goes across borders is very attractive to them, I believe. So the way that it'll work, you know, they're doing all of the engineering to make sure that the chipsets work, they'll do all of the interoperability work to make sure.
devices and the radios work together. And then they're going to go with us, but they have a global.
They're obviously a huge company with global reach and they'll go to their system integrator partners and say, you know, here is a
full solution with spectrum and all the equipment that you would need for whatever private network you're wanting to deploy. And so then those system integrators would work with us on a case by case basis to do the licensing agreement and the lease.
So the revenue will be coming from other parties, not from Qualcomm. Qualcomm will get revenue from selling equipment and will get lease revenue from the people that they introduce us to. So the revenue will be coming from other parties, not from Qualcomm.
The revenue will be coming from other parties, not from Qualcomm. Qualcomm will get revenue from selling equipment, and we'll get lease revenue from the people that they introduce us to. Got it.
got it. And one more if I could. And the 10k line on, you know, the Germany and larger constellation applications being accepted by the ITU, is that a separate, when you say larger satellite constellation than we have today, is that the 17 satellites MDA is working on, or is that a, you know, future constellation that we really haven't dealt into yet.
We have no comment on that one that is done. Got it. Okay, I look forward to the next call then. Thank you. Thank you. That concludes the Q&A session. I'd now like to turn the call back over to Jem and Rowe for any closing remarks.
Thank you all for joining today. We appreciate the attendance from investors, analysts, and others, and look forward to doing this again. As always, we are available for follow-up questions for those who ask questions today and want to go deeper.
and always of course talking to our investors.
anytime you want to reach out to us. Thank you very much for joining. We look forward to doing it again soon with more important news. Thank you.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.