The race to space is getting pretty wild

The most interesting battle in the cellular industry is playing out across the sky. Apple, Dish Network, Viasat, AST SpaceMobile and Globalstar are among the many companies beginning to compete against one another in the race to connect mobile phones directly to satellites.

If you don’t think that’s interesting enough, one of the latest skirmishes in this rapidly evolving battlefield involves some of the richest men in the world – Charlie Ergen, Tim Cook, Jay Monroe and, potentially, Elon Musk.

At issue in this latest dustup is a loan to Globalstar (Apple’s satellite vendor) backed by EchoStar (majority owned by Ergen). And though the details are very much in the weeds, the issues involved are significant.

The development also helps to reflect the significant opportunities and challenges involved in the nascent, burgeoning market for phone-to-satellite connections.

Exploring financing

Jay Monroe’s Globalstar “cannot currently predict whether, and on what terms, any such financing will be available, but maximizing shareholder value is the driving consideration,” the company warned in a recent SEC filing.

That obscure financial language hides a potential conflict between Ergen’s EchoStar and Cook’s Apple. Thankfully analyst Tim Farrar with TMF Associates offered an insider’s guide to the situation on his website, explaining that Globalstar can’t access the $450 million Apple plans to plow into the company until it refinances the terms of the $150 million it owes to Ergen’s EchoStar.

“So what happens next? The statement in the 8-K [SEC filing] … suggests that Ergen will soon (or perhaps already has) submitted a ‘non-frivolous proposal’ to acquire Globalstar, presumably at a very low price, given that Globalstar will soon be in breach of its obligations to Apple,” Farrar wrote.

Apple has an agreement with Globalstar to use the company’s satellites for its new iPhone emergency messaging service.

Farrar continued: “The most interesting question is what Ergen would seek to gain from Apple, if he was to either enable Apple to buy Globalstar at a low price or buy Globalstar himself (presumably through EchoStar) and continue the partnership.”

Farrar speculated that Ergen might pursue a transaction with Globalstar in part to encourage Apple to support Dish Network’s 5G networking prospects (Ergen is also the chairman and majority owner of Dish Network).

Finally, Farrar argued that any movements between EchoStar and Globalstar could push Starlink (owned by SpaceX’s Elon Musk) to pursue its own satellite spectrum via a purchase of Omnispace or even Ligado Networks. “Wouldn’t that be fun!” Farrar writes.

Partnerships and acquisitions

Globalstar has a few more days to figure out its financing situation before dealing with Ergen.

But the gyrations among Apple, EchoStar and Globalstar are just a taste of what’s likely to come. For example, Viasat CEO Mark Dankberg said he’s open to pursuing the phone-to-satellite market through his company’s satellites – either those in low orbit or those in high, geosynchronous orbit – or through some kind of partnership, including with a company like SpaceX. SpaceX has already pledged its interest in the phone-to-satellite market via T-Mobile’s spectrum in the US.

Dankberg’s Viasat is in the process of merging with rival satellite company Inmarsat, which owns valuable L-band spectrum that a wide range of companies are hoping to use for phone-to-satellite communications.

To read the complete article, visit Light Reading.