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Apple's $1.5 billion deal with Globalstar, through which the firm acquired a 20% stake in the company and provided it with the funds to build out a mobile satellite service (MSS) network, will use SpaceX's rockets to launch the satellites. Apple first announced its MSS investment in November 2022 and made headlines last month after a Globalstar SEC filing revealed a $1.5 billion investment that gave Apple 20% control over a subsidiary.
Subsequent Globalstar filings with the Federal Communications Commission (FCC) and the SEC shed more light on the deal, revealing that Globalstar will use part of the proceeds from the deal to retire debt and to build its next-generation MSS satellite constellation.
SpaceX Will Launch Apple Partner Globalstar's MSS Satellites In 2025
Apple's satellite-based features rely on Globalstar's network, which in turn uses the MSS spectrum. This spectrum is in the L and S bands, and Apple's deal with Globalstar in October expands their partnership. Now, Apple will prepay Globalstar for its MSS network and allow the firm to retire some of its debt. Globalstar will achieve these objectives through a $1.1 billion payment which will also cover launch and construction costs for what Globalstar describes as its 'Extended MSS Network.'
The remaining $400 million is an equity purchase that allows Apple a 20% control of a Globalstar entity. As per Globalstar's FCC filing, this entity is Globalstar Licensee LLC, which controls the firm's MSS satellite constellation. After the deal, Globalstar's executive chairman Jay Monroe's equity interest in Globalstar Licensee LLC, has dropped to 44.52% from an earlier 55.65%, but he still holds a majority voting interest of 57.77%.
Monroe's ownership of the satellite division comes through a complex chain of companies, which eventually give him a majority interest in Globalstar, Inc.
Apple's new deal with Globalstar is dubbed as an Updated Services Agreement, and the latter's latest Form 10-Q SEC filing shares details about the launch services provider for the Extended MSS Network. In it, Globalstar reveals that through "the Updated Services Agreement, the Company entered into a launch services agreement with SpaceX for the new satellites that will be procured for the Extended MSS Network."
It adds that the payment from Apple includes "fees tied to the cost of the Extended MSS Network, fees for providing additional related services, fees tied to expenses incurred for the provision of such services, and performance bonuses," with a portion of the payments "subject to the satisfaction of certain licensing, service levels and milestone achievements."
Globalstar entered into a deal with SpaceX in 2023 to launch its upgraded satellites in 2025. The firm has incurred $22.6 million in costs as part of its SpaceX agreement. The launch window for the new satellites opens in April 2025 and extends to September, outlines Globalstar.
These satellites will work with Apple's satellite features for the iPhone, and they will become part of a growing low Earth orbit (LEO) network of satellite-based smartphone connectivity. SpaceX has established a strong foothold in this industry, and it regularly launches Starlink direct-to-cell satellites with its Starlink launches.
