Below is the quote from G* website. I thought, in partnership with Airtouch for Canada and Mexico and DASA for Brasil, Loral retained service provider rights for these markets. I could be wrong. I also attached the press release from G*'s website regarding service provider rights.
Curious though, if they retained the service provider rights, what are projections for there portion. This would be additional Loral income as well as the management fee that G* would not recognize, but Loral would (i.e. Loral pulling more G* earnings than its proportionate share of Globalstar L.P. and GSTRF.)
Quote from G* Website:
Loral has been granted the right to be the exclusive Globalstar service provider, along with DASA, in Brazil; and in Mexico and Canada,together with AirTouch Communications.
G* Press Release from a while ago:
General Partner, Globalstar L.P.
1755 Jefferson Davis Hwy., Suite 1007
Arlington, VA 22202 USA
Tel: +1 703 414-1045
Fax: +1 703 414-1075/74/72
Email: david.benton@globalstar.loral.com
News
For Immediate Release
Contact: Tom Ross, Loral Space & Comm
+1-212-338-5656
Susan Rosenberg, AirTouch
+1-510-210-3910
Fernando Franco, Telefonica Autrey
+525-227-4565
AirTouch, Loral, and Telefonica Autrey Form Joint Venture
to Provide Mobile Satellite Services in Mexico
MEXICO CITY, June 25, 1996 -- AirTouch Communications (NYSE: ATI), Loral Space & Communications Ltd. (NYSE: LOR), and Telefonica Autrey S.A. de C.V., today signed a joint venture agreement to offer national wireless services in Mexico using the Globalstar satellite-based communications system.
The joint venture, which will operate under the name Globalstar de Mexico S. de R.L., will pursue all necessary government approvals and establish operations to sell Globalstar service in Mexico. The venture expects to invest approximately $60 million for infrastructure and working capital. Telefonica Autrey, with a 51 percent ownership interest, will appoint the chief executive officer and have primary
operating responsibility. AirTouch and Loral have a combined 49 percent interest. AirTouch will be responsible for technical, marketing, and operational functions.
With today's joint venture agreement, Mexico joins a group of over 90 countries planning to offer voice,data, and fax services via Globalstar's low earth orbit satellite system beginning in late 1998. Globalstar L.P. (NASDAQ: GSTRF) is a partnership of leading international satellite manufacturers and wireless operators that is constructing a $2.2 billion system of 48 satellites to provide global communications services.
Loral and AirTouch, both founding partners of Globalstar, have exclusive rights to provide service in Mexico and have selected Telefonica Autrey as their local operating partner.
"Globalstar services will have a tremendous economic and social impact for Mexico. The availability of telephone service throughout the country will change the way Mexicans live, especially in areas where
basic telecommunication services are scarce. A telephone within minutes for every Mexican," said Sergio Autrey, chairman of Telefonica Autrey. "We are very excited to be part of the new generation of
telecommunications technology and proud to be making it available to Mexicans by the end of 1998," said Lauro Gonzalez, chief executive officer of Telefonica Autrey.
"This is AirTouch's first joint venture in Latin America, and we're delighted to be expanding our North American service area. We think Mexico is an excellent market for Globalstar's services," said Arun
Sarin, vice chairman of AirTouch Communications. "The landline and cellular penetration rates are relatively low, especially in rural areas, indicating pent-up demand for telecommunications. Globalstar is
an economical way to make communications services available to Mexico's 90 million people."
"The Mexican market is huge and under-served for telephony services, and we expect Globalstar to be a major player there," commented Bernard L. Schwartz, chairman and chief executive officer of Loral
Space & Communications, Ltd. "That's why we've chosen to make this investment in partnership with Telefonica Autrey and AirTouch, two outstanding companies. This, together with our recently
established ventures in Russia and Brazil, demonstrates that Globalstar's momentum is building as we move closer to next year's initial launch and the beginning of service in 1998."
The Globalstar system will provide telephony services for global travelers and in areas that lack cellular or landline coverage. The system is designed to utilize the existing terrestrial telecommunications infrastructure and to complement existing cellular carriers by providing service in areas without cellular
coverage.
Telefonica Autrey is the holding company of Optel Telecomunicaciones, S.A. de C.V., the market's leading data communications company since 1994 and Global One's national data carrier in the country.
Telefonica Autrey is part of the Autrey family group of companies which include: Grupo Casa Autrey (NYSE:ATY), the leading pharmaceutical and consumer goods distributor in Mexico; Grupo Acerero
del Norte, an important mining and agrochemical producer in the country and Altos Hornos de Mexico(Mexican Bolsa: AHMSA), the largest flat steel manufacturer in Mexico.
AirTouch Communications is a global wireless communications company, with interests in cellular,paging, and personal communications services in the United States and 10 other nations: Belgium,
Germany, India, Italy, Japan, Poland, Portugal, South Korea, Spain and Sweden. The company, based in San Francisco, serves nearly six million proportionate customers worldwide. AirTouch, with a 6.4 percent stake in Globalstar, has exclusive service provider rights for Globalstar in the United States,Mexico, and eight other countries.
Loral Space & Communications, headquartered in New York, is a major international provider of satellites and satellite-based services. Loral is the managing general partner of Globalstar and of Space
Systems/Loral, the world leader in large commercial satellites. In addition to Mexico, Loral has exclusive service provider rights for Globalstar in Brazil and Canada. |
