Globalstar Rises as FCC Agrees to Airwaves Service
Globalstar Inc. (GSAT) rose as much as 29 percent after U.S. regulators agreed to review whether it may offer mobile service over airwaves reserved for satellite use, potentially boosting the value of the company’s spectrum.
The Federal Communications Commission issued a notice on Nov. 1 saying it will consider rules Globalstar requested last year, according to a posting on the agency’s website. A final decision on the request by the Covington, Louisiana-based satellite company depends on votes under new FCC Chairman Tom Wheeler, who was confirmed by the Senate on Oct. 29.
Globalstar, which has a market capitalization of about $1 billion, rose 18 percent to $1.65 today. The shares have traded as low as 26 cents this year.
The FCC’s action “represents a seminal development and yet another step forward in Globalstar’s renaissance,” Jay Monroe, Globalstar’s chief executive officer, said in a statement yesterday. “We look forward to receiving the public’s comments and working towards a final order over the next several months.”
FCC permission would increase the value of Globalstar’s spectrum and may spur cable operators or phone carriers to try to acquire the company, according to Falcon Point Capital LLC.
Amazon.com Inc. (AMZN) used airwaves controlled by Globalstar to test a wireless network that connects Amazon’s devices to the Internet, according to people with knowledge of the matter.
The change in airwaves use will increase Wi-Fi capacity in the U.S. by one third and improve service for millions of devices, Globalstar said in a Web presentation. The company told the FCC in June it had almost 561,000 customers.
The commission last year gave Dish Network Corp. (DISH) permission for a mobile-phone network on airwaves previously used for satellite services.
The agency blocked financier Philip Falcone from using satellite airwaves for LightSquared Inc. after officials concluded the proposed terrestrial service would interfere with global-positioning system equipment.
Globalstar’s use won’t interfere with GPS, the company said in a June presentation to the FCC.
The agency has set expanded use of airwaves among its priorities as it meets growing demand from smartphones, tablets and other wireless devices. In a filing last year, Globalstar said that with FCC approval it could offer high-speed wireless Internet service, or broadband, “very quickly in numerous areas of the United States.”
The service will help alleviate congestion that’s impeding Wi-Fi use in cities, the company said.
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