Summary
Globalstar, Inc. (GSAT) announced an amendment to its agreement with Open Range Communications, Inc. (Open Range) concerning the use of Globalstar's spectrum for Ancillary Terrestrial Component (ATC) services. This amendment, effective December 2, 2008, reduces Globalstar's preferred equity commitment to Open Range from $5 million to $3 million. The investment has already been made via bridge loans and will convert to preferred equity upon the closing of Open Range's financing. Open Range plans to utilize Globalstar's spectrum to offer dual-mode mobile satellite and terrestrial WiMAX services, primarily targeting over 500 rural American communities. The agreement allows Open Range to use a portion or all of Globalstar's authorized ATC spectrum, with options to expand usage over the next six years. Commercial availability is anticipated in select markets in 2009. The agreement has an initial term of up to 30 years and is contingent on Open Range securing its equity and debt financing, which was expected to close in December 2008.
Key Highlights
- 1Globalstar amends spectrum use agreement with Open Range Communications.
- 2Globalstar's preferred equity commitment reduced to $3 million from $5 million.
- 3Open Range will use Globalstar spectrum for terrestrial WiMAX services in rural US communities.
- 4Agreement allows for use of a portion or all of Globalstar's ATC spectrum.
- 5Open Range has options to expand spectrum usage over the next six years.
- 6Commercial service launch expected in selected markets in 2009.
- 7Agreement is contingent on Open Range completing its equity and debt financing.