Globalstar CEO David Kagan joins Yahoo Finance Live to discuss Apple’s investment in Globalstar for its Emergency SOS.
Video transcript
[WHOOSHING]
– OK. Well, Apple is announcing a $450 million investment to bolster emergency SOS software in the iPhone 14 and iPhone 14 Pro, the majority of which goes to Globalstar. Well, Globalstar CEO David Kagan is joining us now. David, glad to have you on the show. So when Apple really increases its investment in this space, what does that mean for a company like Globalstar?
DAVID KAGAN: Well, that’s fantastic. This is just an absolutely incredible development for the company, for our employees, our shareholders and all Globalstar stakeholders. This has been a great development for us and really catapults us into a whole new stratosphere in terms of where the business is heading. Certainly, a company that has 30 years of experience in the satellite sector, and now we have a great trajectory for the future of the company.
– And clearly, you already have a good momentum. You called the third quarter of 2022 transformational for Globalstar. Tell us why.
DAVID KAGAN: Well, we’re really starting to recognize some of the revenue associated with the relationship with Apple. It will start to ramp up when they go live, which should be sometime this quarter. During the month of November, that’s what we were told. And also, our core business is also developing at the same time. We’re starting to see an acceleration in what we call our “Commercial IoT segment,” where we’re seeing an insatiable demand for our products. And we are very excited about what the future holds for this line of business as well.
– And a lot of people were hearing about satellites, especially in light of the war in Ukraine, seeing what Starlink was doing there. How do you see yourself positioning yourself in the satellite industry?
DAVID KAGAN: So we focus very specifically on what we call “low data rate services”. We are therefore not a broadband company, but we focus on the Internet of Things; small bit data; information, whether tracking, assets, to help our customers view sensor reports and drive their operations, to increase the efficiency of their operations whether in the oil and gas industry , the agricultural sector or transport. And so we remain focused on the path we know our satellites are capable of operating and on providing excellent services and information that will also help our customers drive their business forward.
– And looking at what future customers are looking for, as a provider of next-generation telecom infrastructure, what kind of innovations are you going to focus on and what kind of investments are you planning to make there?
DAVID KAGAN: So very importantly, we believe that currently the desire of our customers and future customers is to have two-way connectivity. Until now, in our commercial IoT market, this has been a one-way service. So, in other words, we can report, for example, a hose that has too much pressure, and then someone at our client’s head office or remote offices should take action based on that information. Contrary to, in the future we will be able to say that the pipe pressure is too high and automatically remotely, through our system, close this pipe or control this pressure, just as an example. That’s one of the major investments we’re making is in two-way technology.
Additionally, we use our terrestrial spectrum, known in the 3GPP community as “Band 53”, to provide fantastic services as well. And in this case, it will be broadband services on terrestrial networks that will be developed with our solutions in markets that we do not serve today.
– And what are some of the future markets you hope to explore? And on top of that, of course, it’s been a tough year for technology, but Globalstar bucked that trend. You’re actually up about, I believe, 6% year-to-date. What do you attribute this to?
DAVID KAGAN: Again, I attribute this to people who really recognize the value of the company now. We discussed capabilities and assets, the main assets that we have in the business. And I think with the validation of the Apple deal now coming to fruition and people are starting to recognize that we’re going to do what we say we’re going to do and we’re going to deliver the Band 53 asset, as I mentioned, as well as the growth we have with our commercial IoT line of business. So I think investors are starting to realize, in fact, that this company has legs and that we’re going to keep delivering and doing what we say we’re going to do.
– Exciting to see where the company goes from here. David Kagan, CEO of Globalstar, thank you very much.
