Satellite phone company Globalstar exits bankruptcy

[WirelessBeachBum]

Satellite phone company Globalstar LP, which burned through billions of dollars before declaring insolvency, exited bankruptcy Thursday when a private equity firm bought it for $43 million.
Globalstar filed for bankruptcy in April 2002 after the consortium, led by Loral and Qualcomm, spent $4 billion to build a global satellite system.

Last April, a company led by wireless billionaire Craig O. McCaw signed a deal to buy Globalstar for $55 million. But McCaw's company pulled out in October and Thermo Capital Partners LLC, a private equity firm which had bid against McCaw, put in a new offer.

The deal, announced last November and finalized Thursday, gives New Orleans-based Thermo 81.25 percent ownership of the company.

Globalstar, based in San Jose, has continued to operate during its bankruptcy, with 40 satellites in operation and more than 110,000 customers.

Its largest customers are the militaries of the United States, Russia, Australia, Canada, the United Kingdom and South Korea and maritime cargo and tanker companies.

Rival Iridium Satellite LLC also spent billions before filing for bankruptcy protection in 1999. It restructured and the Pentagon is now a mainstay customer.

Satellite phone providers have faced the same revenue erosion that has hurt traditional and wireless phone companies. While satellite phones were originally designed for remote businesses like freight ships, the service is cheap enough for consumer usage.

Globalstar's prices for a one minute of satellite phone time start at 17 cents a minute.

Globalstar said Thursday it would launch eight spare satellites in late 2005 or early 2006 and build new ground stations in Alaska and Florida.

It also said it would introduce fax service and expand its data offerings.

[agentHibby]

hopefully one day satellite phones will become popular one day. [img]i/expressions/face-icon-small-smile.gif[/img]

[SNSE]

I have heard rumblings that the Iridium system, which was supposed to stay up until 2014, may die in as little as 3 to 5 years....

[Gamer03]

Satellite phones are cool, but the monthly plan is so EXPENSIVE!!! [img]i/expressions/face-icon-small-wink.gif[/img]

[WirelessBeachBum]

It's nice to keep one in the glovebox...I only use mine a couple of times a month.