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Bringing Globalstar’s High-Flying
Spectrum Story Back to Earth

GSAT’s Spectrum is Worthless



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Not the Same as Cellular Spectrum:
Wifi and Cell Tower iconsThe FCC has ignored Globalstar’s request to make its spectrum available for cellular use, entertaining only its Wi-Fi proposal, which means users will be restricted to transmitting signals that are 10x lower than typical cellular signals.
Frequency Matters:
Spectrum value as a function of frequency
Low-frequency spectrum is exponentially more valuable than high-frequency spectrum like GSAT’s, rendering most comp analyses far too optimistic. Clearwire’s spectrum, right next door to GSAT’s in frequency terms, sold in July 2013 for $0.30 per MHz-pop – implying 85% downside for GSAT.

 

 

 

GSAT’s Wi-Fi Proposal Will Never Be Commercially Viable


Quote section 2

Bulls dream big about GSAT’s proposed Wi-Fi-like service, TLPS. But TLPS will be, in Cisco’s words, “nothing more than a paid Wi-Fi offering.” Yet GSAT’s market value exceeds that of the largest paid-Wi-Fi firm, Boingo (WIFI), by 28x.

Wi-Fi “Congestion” is Massively Overstated


There is already plenty of Wi-Fi spectrum to go around, and more is on the way.

GSAT spectrum vs unlicensed wi-fi spectrum

Average Wi-Fi speeds already exceed most requirements.How much speed do you need

 

Academic researchers agree:

Emperor has no problem

Wifi networks are underutilized

Successful Large-Scale Wi-Fi Deployments Abound


 

With engineering best practices and up-to-date technology, Wi-Fi performs great on current unlicensed spectrum, even in highly dense, bandwidth-hungry environments.

Super Bowl XLVIII

  • Free Wi-Fi for 82,529 fans
  • 3.2 terabytes of traffic

Sochi 2014 Winter Olympics

  • 2,500 Wi-Fi access points supporting 120,000 simultaneous mobile devices

Mobile World Congress 2014 (Barcelona)

  • Free Wi-Fi for >80,000 attendees
  • 19.1 terabytes of traffic

Stanford University Computer Science Department Building

  • 2,700 unique clients per month
  • 1.32 terabytes of monthly traffic

Apple Worldwide Developers Conference 2014

  • 1,000 Apple engineers and 5,000 third-party developers

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When bad Wi-Fi can already be fixed using today’s best practices on public bands, who will have any interest in one licensed, private Wi-Fi channel? And the technology for high-density Wi-Fi environments is only getting better every day.

Just Ask Yourself


 

In a world where:

  • Unlicensed Wi-Fi, when available, is already superior to cellular service
  • Free Wi-Fi is offered by more and more businesses and venues
  • 5GHz Wi-Fi is supported by all new devices and will enable far faster peak speeds than 2.4GHz
  • <0.1% of the US population has demonstrated any willingness to pay a dime for Wi-Fi access, let alone faster Wi-Fi access
  • The notion of unmanageable spectrum congestion is belied by the widespread success of Wi-Fi deployments in stadiums, universities, businesses, etc.

Does TLPS have any remotely viable future? Or is TLPS merely Globalstar management’s latest scheme to “totally not go bankrupt this time”:

Quote section 5

Prepare for Dilution


GSAT minimum EBITDA covenants

GSAT has almost $600 million in net debt but hasn’t been profitable in years. It’s unlikely to be able to meet its financial covenants in the coming years.

A dilutive capital raise is a real possibility. Recently, Iridium, a major player in GSAT’s industry with a very similar debt facility, was also on track to violate its covenants. In May, its creditors forced it to raise over $200 million in new equity.

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