GLOBALSTAR'S THIRD SUCCESSFUL LAUNCH CATAPULTS INVESTOR SPIRITS
[via QCOM thread. No new info. First paragraph is kinda bizarre...]
News article received, Thursday, February 18, 1999 10:23:44 PM EST
Feb. 18, 1999 (MOBILE SATELLITE NEWS, Vol. 11, No. 4 via COMTEX) -- Globalstar L.P.'s [GSTRF]
launch of four satellites to its low- Earth-orbit (LEO) constellation last Tuesday (2/9) and a strong business
plan are dazzling investors, causing satellite analysts to maintain "buy" ratings and project strong growth for
the company in 1999.
Following the launch of a Soyuz-Ikar rocket from Baikonur Cosmodrome in Kazakhstan that brought to 12
the number of Globalstar birds now in orbit, satellite analyst Armand Mussey with Unterberg, Towbin
reiterated his "buy" rating, and said he expects investor enthusiasm to increase with the resumption of
launches. That, in turn, should mean a rise in Globalstar's share price.
Launch success was a welcome relief for the fledgling Big LEO operator, which has been on the ropes since
last September's failure of a Ukrainian Zenit rocket carrying 12 of its satellites and the subsequent
disintegration of the company's share price. Globalstar now intends to pursue an aggressive launch
schedule to expedite the build-out of its planned 48-bird network. The Feb. 9 launch marks the first of a
dozen Globalstar missions using the Soyuz booster.
However, since the fiery demise of Globalstar's birds, the company's recovery has offered a compelling
buying opportunity to investors. Though stocks have dropped slightly since the launch, from $18 Feb. 9 to
$17.18 at our deadline, analysts say the size of the market opportunity for satellite telecommunications and
the quality of Globalstar's system will lead investors to seize hold of a stock that could hit the heavens.
Technology magazine Red Herring included Globalstar in its list of the "Top 10 Stocks For 1999," stating
that the company's restructured business plan and focus when compared to arch rival Iridium LLC's [IRIDF]
makes Globalstar the cheaper solution for the masses.
"With Iridium phones costing $3,000 each, and the company targeting the narrower demographic of
high-flying business people, Globalstar's focus of selling cheaper wholesale minutes to carriers implies that
it can become the global wireless phones system for the masses," according to Red Herring's report.
But if there is one thing Bernard Schwartz knows for sure about the market for global mobile satellite
services, it's that there is room for everybody. Schwartz, the CEO of Loral Space and Communications
[LOR], said at a SATELLITE '99 news conference earlier this month that he's confident the high demand for
mobile satellite service will be driven by the market once that service is up and running.
"If you add the total capacity of Iridium, ICO [ICOGF], Globalstar and others, and you add in the total
capacity available [for mobile satellite services], it will only add up to be a fraction of the demand that's out
there," he said.
Schwartz said in order for Globalstar to meet the demands of its projected 7.5 million subscribers in the first
generation of service, scheduled to start Oct. 1, the company is focusing on getting handsets to customers
and providing a low-cost service.
Schwartz also responded to a question regarding whether he had placed a call on Iridium's system. With
tongue in cheek, Schwartz said he had not but would love to if someone gave him a phone. That response
prompted Loral President and COO Greg Clark to chime in: "We can't afford the handset."
Schwartz said that handset manufacturers Qualcomm [QCOM], Ericsson [ERICY] and Telital are ahead of
schedule and will produce between 10, 000 and 15,000 phones per week, then ramp up to an output of
40,000 by December. Schwartz said Globalstar will continue financing the project at $200 million per
quarter.
However, fear of another launch failure has led the company to factor in the use of the Delta and Ariane
rockets.
"Launching is a risky business, and we've factored in enough redundancies that if we don't use the [Soyuz],
we can still meet schedule using only the Ariane and Delta and not be dependent on any one rocket,"
Schwartz said.
Space Systems/Loral (SS/L) also is moving ahead with its approximately $100 million development of the
20.20 commercial communications satellite platform - a satellite that will be twice the size of existing birds
and 25 percent more expensive. The company is currently in discussion with three potential customers,
including subsidiary Loral Skynet, said Robert Berry, president of SS/L.
With a target delivery date in first quarter 2002 and a shelf life of 15 years, Berry said the 20.20 will offer the
lowest cost on a per-transponder basis due to its ability to deliver up to 25 kilowatts of total satellite power
and carry more than 150 transponders. The 20.20 will be completely financed internally by SS/L, Berry said.
...SS/L Eyes Lockheed Martin's Atlas V For 20.20 Launches
In order to boost a satellite such as SS/L's 20.20, a larger, more powerful rocket is needed. News of a
planned Atlas V family of launch vehicles from Lockheed Martin Corp. [LMT] seemed to be just what SS/L
has in mind.
The Atlas V will include a booster with a 5-meter fairing capable of carrying satellites as large as the 20.20.
It is designed to be a low-cost competitor to Arianespace's Ariane V.
The new launch vehicles are expected to be ready by 2001 and will offer 3-, 4-and 5-meter fairings to match
whatever payload the booster would carry, said Wilbur Trafton, the acting president of International Launch
Services (ILS), a joint venture led by Lockheed Martin that markets the Atlas and the Russian-built Proton
launchers.
The Atlas V will be funded by Lockheed Martin and the U.S. Air Force. The family of launch vehicles will be
used to support the commercial and U.S. government market for space service launches.
Lockheed Martin was awarded contracts under the Air Force Evolved Expendable Launch Vehicle (EELV)
program last October to complete development of a family of launchers that would eventually replace the Air
Force's use of Delta, Atlas and Titan rockets. The Atlas V family is Lockheed Martin's response. The Atlas
V rockets will be launched from Cape Canaveral Air Station, Fla., and Vandenberg Air Force Base, Calif.
The industry's launchers are taking turns unveiling plans to provide heavier boosters to meet the needs of
customers to lift larger and more powerful satellites into space, executives of several top launch service
providers said during a panel discussion at SATELLITE 99.
Jean-Marie Luton, president and CEO of Arianespace, and Via Satellite's satellite executive of the year, said
his company remains the industry leader with the rollout of its Ariane V and its success in winning 13 of the
21 geostationary satellite launch contracts issued last year.
Lockheed Martin also is ramping up the Atlas III to meet rising capacity demands, he added. Indeed, the
Atlas V will share common features with the Atlas III but will offer significant improvements such as
increased launch capability and a 5.4-meter fairing. The baseline Atlas V will boost payloads weighing more
than 5,000 kg. (11, 020 lbs.) into geosynchronous transfer orbit (GTO). The Atlas V Heavy vehicle will be
capable of delivering more than 13,000 kg. (28,660 lbs.) into GTO. The rocket will be powered by a new
RD-180 engine that will be flight proven on Atlas III two years prior to its first use on an Atlas V.
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