Perhaps not so fast in breaking out the GSAT Champaign?
It appears that Apple has OET Authorized the Iphone 14 for the 1610-1626.5Mhz entire Big Leo band. So it encompasses both the Globalstar AND Iridium bands.
apps.fcc.gov
At this point, Apple actually has very little invested in GSAT. There were a couple of "advanced payments" totalling $75MM made in 2021. But,these are "advanced payments", not revenue, and they are recorded as "Deferred Revenue". These "Advanced payments/deferred revenue" will either be accredited from future service payments due from the customer, or must be returned to Apple if they chose not to move forward at any point. Nearly half of these "advanced payments" were used to launch the single spare Gen. 2 satellite via SpaceX rideshare in mid. 2022. (Obviously required by Apple).
From the early Sept. 8-K
Certain Obligations of Globalstar
Allow Partner to recoup advance payments made to Globalstar from future service fees or, to the extent recoupment is not possible, to repay such amounts in cash.
Additionally from the 8-K
Partner has agreed to make certain payments to the Company for (i) 95% of the approved capital expenditures Globalstar makes in connection with the new satellites described therein (to be paid on a straight-line basis over the useful life of the satellites); (ii) certain costs of the Company’s borrowings related to the new satellites; (iii) other approved costs; and (iv) termination costs
So Apple will make certain payments to Globalstar for 95% of approved expenditures regarding the new satellites and launch costs. *******(to be paid on a straight-line basis over the useful lives). So payments would not begin until the Satellites are on-orbit (2025) and paid over a 15 year period. These expenses for manufacture, launch, and insurance will likely total $560 - $600MM. An amount that GSAT must now attempt to raise from the Capital Markets in the current environment. LIBOR is currently 4.70%, so any debt deal would likely be at least LIBOR +500 - 600 basis points, and LIBOR continues to rise.
Termination rights are as follows.
"The Terms Agreement has no expiration date but provides that each party may terminate it subject to certain notice requirements and, in some cases, other conditions.
In the event Partner terminates the agreements and subject to certain conditions, Partner would be required to reimburse Globalstar for certain capital expenditures, and other costs of materials purchased or manufactured."
So my read is that the reimbursement would be for certain capital expenditures and costs accrued at the time of termination, and any advanced payment not deducted from service fees would be immediately due in cash.
Now an interesting application I noted was that SpaceX has filed a SATMOD application with the FCC to add 1610-1617Mhz and 2483.5 - 2500Mhz to the license of the Gen.1 Starlink satellites. So SpaceX is now applying to share GSAT Big LEO spectrum.
SAT-MOD-20220906-00100 Description: SpaceX application to provide mobile satellite service in the 1610-1617.775 MHz uplink Earth-to-space, the 2020-2025 MHz uplink Earth-to-space, and the 2483.5-2500 MHz downlink space-to-Earth band.
Now here is where the "Spy vs. Spy" conspiracy theory could potentially evolve. So in order to go to the Capital Markets, Globalstar needs to arrange to get the capital for Launch and Insurance Expenses. There is a Satellite Manufacturing Contract which Globalstar has made $0 in payments, and have requested an extension of amounts due to the end of the year (Oh Boy.. Here we go again... Already at this early point)
But, Globalstar has not announced a Launch Contract to date?? I mean, Iridium just announced a new launch contract with SpaceX to launch 5 spares in the middle of 2023. But still no launch contract for Globalstar. Obviously, SpaceX is by far the low-cost leader for launch services. (Also BTW applying to use Globalstar spectrum) But, what would happen if SpaceX decided for some reason that they didn't want to launch the Satellites for Globalstar in 2025. Returned a ZERO BID? Now that would put Globalstar in a bit of a pickle. Who else could launch the 17 satellites? Well, the Russians could.. well, no they couldn't due to sanctions. Maybe ULA, but that would require a Vulcan. Still no BE4 Engines delivered, and it is rumored to be about $50M a launch more expenisve than a Falcon 9. But, there are no engines, and the rocket has never flown. Or perhaps Blue Origin New Glen. Again no BE4 engines, and it has never flown. Insurance rates may be considerably higher on those platform. Maybe the Europeans? But Ariane 6 also has not flown to date, and would be considerably more expensive than even ULA. The GSAT Satellites at `700kg is to large for the small payload launch providers like RocketLab, etc.
So Globalstar needs a Lunch Contract (from a relaible provider) to attempt to raise capital from the Debt Markets which are not favorable at this juncture. Yet, it appears that SpaceX isn't playing ball.
Now to add to this "Spy vs Spy" conspiracy theory. Iridium made the following announcement in July of this year.
sec.gov
"On July 26, 2022, Iridium Communications Inc. announced that it had entered into a development agreement to enable Iridium’s technology in smartphones. The agreement is contingent upon the successful development of the technology, as well as negotiation and execution of a service provider agreement, which the Company expects to finalize by the end of the year. The development agreement also provides for development fees, royalties and network usage fees to be paid to Iridium. To protect each company’s investment in this newly developed technology, the overall arrangement will include substantial recoupment payments from each company for commercializing a similar capability with another party. The agreement also contains termination provisions and other rights, including in the case of a change of control of Iridium."
In addition, if you look at the posturing of Iridium recently regarding spare satellites on orbit..
Iridium originally announced a firm contract in mid-2020 that they would launch 6 spare satellites with Relativity Space
reuters.com
Iridium stated. "There’s not a need, our constellation is very healthy,” Suzi McBride, Iridium’s chief operations officer, said in an interview. “But we knew at some point we’re going to want to launch them, especially if we get an issue on orbit.”
Now, suddenly Iridium will launch the 5 spares in mid 2023 aboard SpaceX.
https://spacenews.com/spacex-to-launch-five-spare-iridium-satellites/
So the Iphone 14 is already OET Authorized to use Iridium's spectrum. Would a company like Apple leave themselves "sole sourced" with a lower quality, smaller coverage network that is limited to Simplex GSAT vs. Duplex messaging with IRDM. Not to mention with very shakey financials of GSAT?
If Apple walked away from Globalstar, it would be devastating as Apple could demand the refund of their $75MM and aleviate the need to reimburse nearly half a billion dollars in the future.
Perhaps Apple would pay Iridium to build it's own Iridium Global Gateway for the exclusive use of Apple? This would bypass terrestrial fiber networks and land these duplex SBD messages at Apple's footsteps via the ISL links.
Speaking of Simplex vs. Duplex. BTW. Iphone does not include the 2483.5-2500Mhz for Globalstar (space to earth (Duplex).
On Apples web site for Satellite SOS. It mentions the following regarding using the service.
"You might be asked to respond to additional messages."
This sounds like a Duplex feature, not available in the IPhone OET Authorized Big LEO Spectrum 1610-1617Mhz.
And so it goes,
PCSTEL
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