Open Range Receives Financing To Provide Mobile Satellite And Wireless Broadband Service Using Globalstar Atc Spectrum Authority

 

March 27 2008

Globalstar, Inc. announced that Open Range Communications, Inc. has secured approval for a $267 million broadband loan from the Department of Agriculture’s Rural Utilities Program.

In late 2007 Globalstar signed an agreement with Open Range permitting Open Range to deploy wireless broadband service in rural America using Globalstar’s Ancillary Terrestrial Component (ATC) authority. The agreement contemplates using the Globalstar spectrum to offer dual mode mobile satellite based and terrestrial wireless WiMAX services to over 500 rural American communities that currently do not have adequate access to terrestrial-based broadband voice and data services. Customers outside of the WiMAX coverage area will be able to use Globalstar service over the satellites. The agreement is contingent on various conditions, including Globalstar’s receipt of authority from the FCC to use an expanded portion of its licensed spectrum for ATC services.

“Globalstar is extremely excited because this financing approval moves Open Range a step closer to meeting the wireless broadband needs of un-served and underserved rural Americans using our ATC authorized spectrum,” said Jay Monroe, Chairman and CEO of Globalstar, Inc. Mr. Monroe added, “We expect the ATC agreement with Open Range to open the door for rural consumers to make new, dependable, and low-cost choices that will help provide ultimate flexibility in their daily lives. We believe this agreement establishes a framework for how global spectrum may be used more efficiently to the benefit of Globalstar, our partners and our customers.”

Open Range expects initially to deploy its infrastructure in more than 500 rural communities which cover over 6 million people. The business plan calls for coverage to be deployed in rural communities with average populations of approximately 10,000 people and for availability to begin in selected markets in 2008.

The term of the agreement is 30 years, is co-extensive with Globalstar’s ATC authority and is subject to renewal options exercisable by Open Range. Using the build out schedule provided in its application for the federally authorized loan program, the fixed and variable payments to be made to Globalstar over the 30 year term indicate a present value of between 30 and 40 cents per MHz/Pop. The total amount of the payments made to Globalstar will depend on a number of factors, including the eventual geographic coverage of, and the number of customers on the Open Range system.