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Globalstar Said to Work With Advisers to Explore Potential Sale
Company won FCC approval for wireless spectrum use last year
Sale would follow Verizon?s $3.1 billion Straight Path deal
By Alex Sherman
(Bloomberg) -- Globalstar Inc., which won U.S. approval to use its satellite airwaves for mobile broadband service, is working with financial advisers on a potential sale, people familiar with the matter said.
The company, which has a market value of about $2.1 billion, could attract interest from major wireless and cable companies, one of the people said, asking not to be identified as the details aren?t public. Deliberations are at an early stage and there is no certainty a deal will be reached, the people said. Chief Executive Jay Monroe III said in an interview in January that he would probably lease his spectrum, adding that the company ?is considering all strategic options.?
Globalstar owns LTE wireless spectrum that can work with existing chips inside smartphones and wireless carriers, Monroe III said at the time. The airwaves aren?t the same as the swath that Verizon Communications Inc. agreed to buy Thursday from Straight Path Communications Inc. for $3.1 billion.
Representatives for Covington, Louisiana-based Globalstar didn?t respond to requests for comment.
Shares of Monroe?s Globalstar Inc. are up 11 percent since the U.S. Federal Communications Commission in December gave the company permission to use its satellite airwaves for mobile broadband services, which can attract more than a niche base of customers with satellite phones.
The bidding war for Straight Path also pumped Globalstar shares, as investors predicted the value of the company?s spectrum licenses will keep climbing. But the two companies? airwaves aren?t created equal.
Straight Path owns high-frequency spectrum in the 28 gigahertz and 39 gigahertz bands, within the range above 24 gigahertz approved for 5G use by the FCC. Globalstar?s airwaves are much lower, at 2.4 gigahertz, and it only owns about 11.5 megahertz.
Wireless carriers, Globalstar?s potential buyers, have estimated they will need channels at least 60 megahertz wide to meet the requirements for the next generation of high-speed mobile phone networks.
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