Globalstar has awarded $353 million in satellite phone manufacturing contracts to Ericsson, Qualcomm and Telital of Trieste, Italy. The contracts are for the initial manufacture and delivery of more than 300,000 early production handheld and fixed Globalstar satellite telephones to seed the marketplace. Following this first production run, unit prices will decline as Globalstar’s service providers initiate larger production orders to meet their market demand.
The contracts were formalized during a signing ceremony attended
by top representatives of the manufacturers and Globalstar service
providers at Globalstar’s headquarters in San Jose, California.
These agreements establish relationships between the phone
manufacturers and the Globalstar service providers, enabling them to
order products to meet their market demand.
“These groundbreaking contracts will ensure that Globalstar’s
service providers will have a variety of phone products for their
subscribers when we enter into commercial service in early 1999,”
said Mr. Bernard L. Schwartz, chairman and chief executive officer
of Loral Space & Communications, Globalstar’s largest equity partner.
Globalstar awarded Qualcomm some $117 million in contracts for the
manufacture of both handheld and fixed Globalstar satellite
telephones. Qualcomm will manufacture Globalstar tri-mode handsets
that will operate as a cellular phone within terrestrial CDMA and
AMPS cellular networks, and as Globalstar satellite phones when out
of terrestrial cellular coverage. This contract includes the
delivery of car and vehicle kits that will allow hands-free operation
from within a vehicle. Qualcomm will also manufacture a variety of
fixed Globalstar satellite phone products. These phone units will
provide service in areas previously deemed too costly for traditional
land-based telephone or cellular services. Fixed satellite
telephones will be located in phone booths or calling centers located
in rural communities, and at remote business operations, such as oil
rigs, utility sites or mining facilities.
Ericsson OMC, Ltd., a subsidiary of Ericsson Telecommunications,
received contracts totaling $204 million for the manufacture of
hand-held Globalstar dual-mode satellite phones that will support
both GSM cellular services and the Globalstar mode of operations.
The handset contract includes the delivery of car and vehicle kits
that will allow hands-free operation from within a vehicle. Ericsson
will also manufacture a variety of fixed Globalstar phone products.
Globalstar awarded Telital, contracts totaling $32 million for the
manufacture of hand-held Globalstar dual-mode satellite phones that
will support both GSM cellular services and the Globalstar mode of
operations. The handset contract also includes the delivery of car
and vehicle kits that will allow hands-free operation from within
vehicles. Telital plans to unveil a series of hand-held satellite
phones to meet the needs of a variety of potential users.
The $2.7 billion Globalstar system, comprised of 48
low-earth-orbit (LEO) satellites and a global network of ground
stations, will allow people around the world to make or receive calls
using hand-held, vehicle-mounted and fixed-site terminals.
Globalstar will also provide data transmission, messaging, facsimile
and position location services. The first four Globalstar satellites
were successfully launched on February 14, 1998. The next launch of
four satellites, also from Cape Canaveral, is scheduled for April 23,
1998, and Globalstar expects to launch a total of 44 satellites into
orbit by the end of the year.
Globalstar now has service provider agreements in over 100
countries, covering 81% of Globalstar’s business plan. Four
Globalstar gateways have been fully completed and are being used to
control and test the satellite system. Facility construction has
been completed at six other sites, and site work and construction is
under way at 20 more gateway sites around the world.
Some subscribers will use portable phones, similar to today’s
cellular phones, with dual- mode capability so subscribers can switch
from conventional cellular telephony to satellite telephony as
required. Subscribers in rural and remote areas may make or receive
calls through fixed-site telephones, similar either to phone booths
or ordinary residential and business telephones. Globalstar phones
will communicate through a Globalstar satellite to a gateway–or
ground station — that in turn will connect calls into the existing
terrestrial telecommunications network.
