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Globalstar launch schedule to proceed despite losses

  • Friday, 17 August 2007 | News

Globalstar has announced its Q2 financial results, showing a decrease in service revenues from $21.5 million to $20 million compared to Q2 2006, and a net loss of $12.7 million compared to $0.8 million.

For the first six months of 2007, service revenue was $37.5 million compared to $42.2 million during the same period the previous year, with a net loss of $12.2 million compared to net income of $21.7 million.

The company is still forging ahead with its plans for an upgrade of its entire satellite network however, having launched 4 new satellites in May of this year, just months after a compulsory announcement was made to the stock exchange admitting that Globalstar's existing network had encountered some unforeseen problems, and that service quality may be compromised in the near future.

"Globalstar had a challenging second quarter however we continued to show an increased number of subscribers," commented Jay Monroe, Globalstar CEO.

"Globalstar ended the quarter with approximately 278,000 subscribers, a net increase of about 41,000 from the number of subscribers we had at the end of the second quarter last year. We believe the issues related to our two-way communications services and the continued concerns about the service life of our satellites resulted in quarterly decreases in net income, adjusted EBITDA and service revenue."

Globalstar has also recently agreed approximately $12 million in contracts with Thales Alenia Space, formerly known as Alcatel Alenia Space, for the upgrade of the company's satellite Operations Control Centre, its backup ground control facility and its satellite control gateways, in anticipation of its new satellite network.

"Currently we are preparing to launch four additional satellites later this year, and our second-generation constellation development continues to be on schedule," said Mr Monroe.

"Our satellite contractor Thales Alenia Space has also just submitted a plan, which we are evaluating, that could result in the acceleration of the deliveries of our second-generation satellites by up to four months."

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