Iridium Authorized to Distribute Products and Services in Russia

Iridium Communications Inc. announces that OOO Iridium Communications (“Iridium Russia”) has received authorization from Russian authorities for commercial operations in the country. Iridium Russia expects to launch service in the second quarter of 2012, once all technical licensing requirements are complete.

Iridium anticipates expanded demand for its products and services in Russia as a result of this authorization for commercial operations. In 2009, Iridium formed Iridium Russia to conduct business in the country due to strong regional interest in its innovative voice and data communications capabilities. Iridium is making a significant, multi-year investment as part of its commitment to the Russian market. The company is actively engaging new and existing distribution relationships in the country to support customer demand.

“Our partners are expressing great enthusiasm for our entry into the Russian market,” said Matt Desch, CEO, Iridium. “We expect Iridium Russia and partners to capture at least 40 percent of the mobile satellite services market in Russia by 2015 — which we think could be a $70-100 million market by then. Our network is uniquely suited to serve the Russian market with its ability to provide 100 percent global coverage for organizations, businesses and individuals for voice, data, tracking or other critical connectivity. Through cost-effective satellite communications services, Iridium extends the connectivity available beyond that of local telecom and technology companies serving diverse Russian markets. Iridium enables voice and data connections where traditional commercial networks cannot reach, including many remote parts of Russia and within the Arctic Region. Around the world, our service has become essential to important sectors such as maritime, aviation, emergency response, civil government, oil and gas, mining and transportation. And, Iridium Russia will be able to serve these markets within the country both this year and well into the future thanks to our planned launch of our second generation network, Iridium NEXT.”

“Blue Sky Network is proud to be an Iridium partner,” said Jon Gilbert, president and CEO, Blue Sky Network. “We believe that Iridium’s expansion into Russia will be a tremendous opportunity for both Iridium and our organization, as we seek development and growth into this high-potential and untapped market. With vast and remote regions, the Russian markets present ideal application environments for our combined technologies in aviation and land-based mobile tracking.”

Victor Chernov, acting chief of the State Emergency and Rescue Marine Service of the Russian Federation and head of the State Marine Rescue Coordination Center, said, “Iridium services will allow our operations to remain connected during critical search and rescue missions throughout the whole territory of Russia, and its exclusive economic zone, including such important regions as the Arctic. We are excited to know that Russia is now authorized to offer these services throughout the Russian Federation — this is good news for our country.”

According to Victor Glushko, general director, Iridium Russia, the country will be a strategic growth area for in-region and international service providers able to deliver Iridium products and services to Russian businesses and, specifically, transportation organizations across land, sea and air. In particular, he said, maritime and energy-related services are showing strong demand throughout the region.

Globalstar Announces Results for First Quarter 2012 — Reports Continued Growth in Adjusted EBITDA

Globalstar, Inc., yesterday announced its financial results for the three-month period ended March 31, 2012. Key highlights include:

  • Globalstar reports positive Adjusted EBITDA for the second consecutive quarter and a substantial increase over the same period in 2011.
  • SPOT service revenue increases approximately 27 percent from the first quarter of 2011 to the first quarter of 2012.
  • Globalstar continues deployment of new satellites and expects call connection rates for key markets to reach more than 80 percent this summer as four additional second-generation satellites are scheduled to be placed into service from May through July.

Revenue

Globalstar reported revenue of $16.7 million in the first quarter of 2012 compared to $18.3 million in the first quarter of 2011. Excluding one-time nonrecurring revenue of $2.0 million from the termination of the Company’s Open Range partnership recognized in the first quarter of 2011, revenue increased by $0.5 million, or 3 percent, in the first quarter of 2012.

The primary driver of the revenue increase in 2012 was SPOT service revenue, which grew by $1.1 million, or 27 percent, in the first quarter of 2012 compared to 2011. As expected, Duplex service revenue was lower in the first quarter of 2012 compared to the same period in 2011, but was in line with revenue in the last quarter of 2011. The Company anticipates Duplex revenue growth later this year as additional second-generation satellites are scheduled to be placed into service.

The Company expects call connection rates in key markets to increase substantially in the near-term as four new second-generation satellites are scheduled to be placed into service over the next three months. With these additional satellites in operation, call connection rates are anticipated to increase to over 80 percent by August. The Company projects further increases as additional satellites are placed into service throughout the remainder of the year. The Company expects increasing service levels to drive both usage and new subscriber additions.

Revenue from subscriber equipment sales in the first quarter of 2012 was $4.1 million, substantially unchanged from the same period in 2011.

Adjusted EBITDA

Globalstar reported positive Adjusted EBITDA of $1.4 million for the first quarter of 2012 compared to negative Adjusted EBITDA of $2.5 million in the same period in 2011. This represented an increase of $3.9 million over the first quarter of 2011. The improvement in Adjusted EBITDA resulted from an increase in revenue of $0.5 million (excluding the one-time nonrecurring revenue from the termination of the Company’s Open Range partnership) and a decrease in operating expenses of $3.4 million (excluding EBITDA adjustments). The decrease of approximately 21 percent in operating expenses was due largely to the implementation of a more focused business strategy, as well as the continuation of operational improvements and streamlining initiatives introduced in late 2011. The Company reported expense reductions in the quarter throughout its major operating areas.

Net Loss

The Company reported a net loss of $24.5 million for the current quarter, compared to a net loss of $6.5 million in the first quarter of 2011, primarily due to an increase of $4.1 million in depreciation expense and a noncash derivative loss of $6.5 million compared to a derivative gain of $6.4 million in the same period in 2011. The higher depreciation charges resulted from the Company placing additional second-generation satellites into service over the last 12 months. The derivative loss resulted primarily from an increase in the Company’s stock price in the first quarter of 2012. Interest expense was also higher in the first quarter of 2012 compared to the same period in 2011 due to a reduction in capitalized interest.

“Overall we are pleased with the results for the quarter. Revenue for the quarter was in line with our expectations, while Adjusted EBITDA exceeded our internal forecasted results” said Jay Monroe, Chairman and CEO of Globalstar, Inc. “We are working hard to translate our significantly improved service quality into Duplex sales growth and improved margins, while maintaining the cost discipline we put in place in late 2011. We continue to believe that we will experience positive revenue growth in the second half of the year.”

Operations and Other Matters

Other items of interest in the quarter include the following:

  • SPOT service revenue during the first quarter was approximately $5.3 million, an increase of approximately 27 percent compared to the same period in 2011. Due to the continued success of Globalstar’s SPOT Satellite GPS Messenger™and related consumer products since their introduction in November 2007, Globalstar has received orders to ship over 370,000 SPOT retail devices to over 10,000 points of distribution in North America, Europe, Latin America, Australia and Southeast Asia. The award-winning devices have also been responsible for the initiation of more than 1,800 rescues around the world.
  • During the quarter Globalstar solidified its long-term supply chain for its SPOT and Simplex data-based asset tracking devices by completing the transition to new contract manufacturers. Previously announced shipment delays of SPOT devices, which negatively impacted hardware revenue early in the quarter, were largely resolved by the end of March.
  • During the first quarter, Globalstar continued to deploy its second-generation satellites and witnessed increased voice and data traffic on the network. Subscribers can expect further significant improvements in network coverage and service reliability throughout the remainder of 2012 as additional satellites are placed into service. The Company anticipates the fourth launch of the last six satellites for the second half of 2012, as Globalstar remains on track to become the first MSS provider to launch, deploy and utilize a second-generation constellation of LEO satellites to service new and existing customers around the world.
  • As announced in March 2012, Globalstar obtained an amendment to its COFACE Facility Agreement which, among other things, deferred the beginning of the repayment period by approximately one year to the second quarter of 2013. This amendment significantly improves the Company’s liquidity position in 2012 and beyond.
  • During the quarter, ADS-B Technologies, LLC (ADS-B Tech) continued development of its ALAS Next Generation Air Traffic Surveillance product (ALAS). ALAS utilizes the Globalstar satellite network to provide real-time aircraft surveillance data from remote areas where a conventional line of sight connection to a terrestrial ADS-B ground station is not possible or impractical. In April, ADS-B Tech successfully demonstrated the capability of the system verifying the feasibility of space-based air traffic surveillance using Globalstar’s constellation of LEO satellites. Globalstar is pleased with the recent test results and the global revenue opportunity such an air traffic management system represents. Globalstar’s unique “bent-pipe” architecture and global network of ground stations provides the only satellite network that can handle the air traffic surveillance data both reliably and with no latency concerns.
  • Globalstar enthusiastically supported recommended actions by the U.S. Federal Communications Commission (FCC) regarding the proposed development of terrestrial broadband services utilizing the MSS 2 GHz band. The FCC further stated that it intends to address issues pertaining to the ATC rules for Globalstar’s Big LEO band in a separate proceeding at a later date. Mr. Monroe added, “As Globalstar completes the launch and deployment of its second-generation constellation, we look forward to participating in that future proceeding and anticipate receiving similar flexibility to offer terrestrial services within the Big LEO spectrum band.”

Iridium Unveils World’s Smallest Two-Way Satellite Data Transceiver

Smaller, Lighter, Global M2M Device Extends Even Further the Ways People and Assets Can Connect Everywhere

The Iridium 9603 is 70 percent smaller by volume, and half the board footprint of the Iridium 9602.

Iridium Communications Inc., today unveiled the world’s smallest, commercial, two-way satellite data transceiver – the Iridium 9603. Announced at International CTIA Wireless 2012, the Iridium 9603 is a data module designed for embedding into machine-to-machine (M2M) solutions for remote asset tracking, monitoring and alarming in defense, government, enterprise and consumer markets where existing larger transceivers could not fit.  

“With the 9603, Iridium is disrupting the global M2M market by becoming relevant to new customer segments such as personnel tracking for consumers and governments as well as fleet, vehicle and heavy equipment tracking and monitoring,” said Joel Thompson, vice president, product management, Iridium. “Through this product evolution, Iridium continues to drive forward its Iridium Force strategy of facilitating personal portable communications through our innovative approaches to reduce the size of our data and voice/data modules. The 9603 opens up a whole new set of ways for people and assets to make vital, two-way connections reliably, in near real-time. This device, which is smaller than a matchbook, further enables Iridium’s vital communications service with the same rich feature set in a terrific value proposition. And of course, Iridium is the only telecommunications carrier in the world that can offer 100 percent pole-to-pole coverage through its meshed network of 66 Low Earth Orbiting (LEO) satellites.”

The Iridium 9603 is 70 percent smaller by volume, and half the board footprint of the Iridium 9602. The Iridium 9603 breaks down design barriers and enables Iridium’s 275 partners to embed global connectivity in hand-held personal tracking devices and even smaller vehicles, containers, devices for field monitoring, command and control applications, and unattended sensors.

“With the terrestrial M2M market now growing faster than ever, Iridium and its partners are dramatically increasing the prospects for satellite M2M along a similar path with this new development,” said Robin Duke-Woolley, chief executive officer of Beecham Research. “The major reduction in size of the 9603 transceiver will encourage smaller end user devices with embedded satellite connectivity. This type of technology innovation moves satellite M2M into application areas traditionally considered to be the preserve of terrestrial wireless and will further accelerate Iridium’s fast growth in the Mobile Satellite Services market.”

In its recent first-quarter earnings release for 2012, Iridium announced its sixth consecutive quarter of approximately 50 percent M2M subscriber growth. The company now draws nearly one-fifth of commercial service revenue from this fast-growing market segment and reported a 29 percent year-over-year increase in M2M unit sales volumes.

The Iridium 9603 is a single board transceiver that offers low latency and duplex data connectivity, permitting reliable two-way communications to and from remote devices. This not only allows users to reliably transfer location and status information, but also to remotely adjust device parameters such as reporting intervals. For example, two-way data communications enables first responders to stay in constant touch during emergency situations with personal location and tracking devices that support two way messages as well as tracking and location updates.

The Iridium 9603 complements the Iridium 9602 in a portfolio of available Short Burst Data (SBD) devices, offering development partners multiple hardware options for enabling customer solutions via the Iridium global network. This board-mounted “black box” provides the device interface through a single multi-pin interface connector and an antenna connector.

Five long-standing Iridium partners served as beta partners in the early testing and integration of the Iridium 9603. These companies are actively incorporating the device into their products, some of which are scheduled to launch as early as June 2012.