News Satellite

Globalstar signs $327m contract with MDA for new satellites

Shortly after the announcement, MDA has signed an agreement with Rocket Lab to build the bus systems for the new Globalstar satellites.

Globalstar has entered into a satellite procurement agreement with Macdonald, Dettwiler and Associates Corporation (MDA), under which Globalstar will acquire 17 new satellites that will extend the life of Globalstar’s existing constellation.

Rocket Lab USA is the principal satellite bus subcontractor under the procurement agreement.

The total contract price for the initial 17 satellites is $327m. Globalstar maintains the option to acquire up to nine additional satellites with flexibility in timing to place such orders in addition to other optional services under the contract. If Globalstar elects to acquire new satellites, each satellite will be priced at $11.4m, subject to certain price adjustments. The agreement requires the contractor to deliver the satellites by 2025, with an expectation that all satellites will be launched by the end of 2025. Globalstar plans to contract separately for launch services and launch insurance for the new satellites.

In its statement, Globalstar referred to a “potential customer” as a key reason to procure the new satellites. “Globalstar is acquiring the satellites to provide continuous satellite services to the potential customer under the Terms Agreement described in the company’s Annual Reports, as well as services to Globalstar’s current and future customers,” the company said.

That unnamed customer will reimburse 95% of the capital expenditures associated with the new satellites as well as interest costs for Globalstar’s financing of the system. Globalstar said it expects to have financing in place for the satellites by August and has deferred initial payments to MDA at 0% interest until Aug. 16.

David Kagan, CEO of Globalstar, said:  “After running a competitive process with multiple bidders, we are very pleased to announce the selection of MDA in partnership with Rocket Lab for the construction of our new satellites. The combination of these vendors offered us the best overall balance of innovation, technical capability, schedule reliability and cost. These new satellites will ensure Globalstar’s ability to provide the highest quality mobile satellite services to its customer over the long-term. We look forward to beginning the process of bending metal and readying the new satellites for launch beginning in approximately three years.”