The device maker will also pay for more services from Globalstar as it ventures into satellite-to-device communications
Globalstar has said in a disclosure to the US’ Securities and Exchange Commission (SEC) that Apple is investing a further $1.1 billion in the satellite firm. In return, Apple will gain a 20% stake in Globalstar and buy more services from the satellite company as it ventures further into satellite-to-device communications.
Apple invested $450 million in the satellite company in 2022 when it launched iPhone 14. It chose Globalstar’s services to support its new Emergency SOS service for that model and subsequent devices, including iWatches, in some countries. Apple has said the Emergency SOS service will remain free to use until 2025.
Under the new contract, Globalstar will deliver more services to Apple devices via a new mobile satellite services (MSS) network. This includes a new satellite constellation, extended ground infrastructure and expanded global MSS licensing.
All this infrastructure will be owned and operated by Globalstar and its subsidiaries, Globalstar SPE.
The $1.1 billion will be contributed during the construction period on a quarterly basis, plus an additional amount to settle debt repayments.
Apple will also prepay some service fees to reflect the cost of the extended MSS network and performance bonuses. The payment of service fees of $30 million annually will “be accelerated”.
Apple will be a passive equity holder: Globalstar will keep control of the board of Globalstar SPE and retain 100% of all terrestrial, MSS and other revenue.
However, it will continue to allocate 85% of its network capacity to provide satellite services to Apple across current and future satellites. The remaining capacity will provide services to other MSS customers.