Globalstar Inc (GSAT) 2010 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the annual 2010 Globalstar, Inc. earnings conference call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions). As a reminder, today's conference is being recorded for replay purposes.

I would now like to turn the conference over to your host for today, Mr. Dean Hirasawa, Director of Public and Investor Relations for Globalstar, Inc. Mr. Hirasawa, please proceed.

Thank you, operator. Good afternoon, everyone. Thank you for joining us for today's conference call to discuss results for Globalstar, Inc. for the 12-month period ended December 31, 2010.

Before we begin, please note the following. This call may contain forward-looking statements within the meaning of federal securities law. Factors that could cause results to differ materially are described in the Safe Harbor section of today's press release and in Globalstar's SEC filings, including the annual report on Form 10-K for the 12 months ended December 31, 2010, which is being filed today. The press release, this conference call, and the associated slide presentation, which is available on the Investor Relations page of our Company website, include discussions of certain non-GAAP financial measures as defined under SEC rules. We have provided a reconciliation of each of those non-GAAP measures to the most comparable GAAP measure in the press release. Please note that the information in this call is accurate only as of today, which is Thursday, March 31, 2011. Today's press release containing certain financial information is available on the Company's website at www.globalstar.com. Later this afternoon, an audio recording of this conference call will also be available via telephone dial-in and a webcast recording, along with a copy of the slide presentation, which will also be made available on the Company website.

Today's call is being hosted by Mr. Peter Dalton, CEO of Globalstar, Inc. Joining Mr. Dalton are Mr. Dirk Wild, Senior Vice President and CFO, and Mr. Tony Navarra, President of Global Operations. Each will be available following their prepared remarks to take your questions.

At this time, I would like to turn the call over to Mr. Dalton.

Good afternoon, and thank you for joining us.

2010 was a memorable year for Globalstar as we began launching our second-generation satellite constellation, and we continued to enhance our position as a leading developer of innovative mobile satellite consumer products and services. Over the next few minutes, we will summarize our accomplishments as well as our operational highlights. Before I begin, I would like to inform you that Globalstar Asia Pacific, our service provider based in Korea, has dispatched a number of persons with Globalstar equipment to assist in the disaster recovery efforts following the devastating earthquake and tsunami that recently hit northern Japan. Globalstar has also realigned the coverage boundary of its Korean gateway ground station in order to help maximize its satellite coverage in the impacted area, and the Company is doing its best to assist in additional ways with respect to equipment and service.

Now, onto our earnings call. First of all, I would like to briefly outline our strategic initiatives and the progress we made throughout the year. Innovation, new market development, increasing revenues, and decreasing costs were our strategic goals as we moved forward towards the all-important goal of launching our second-generation satellite constellation. I am pleased to say that we made meaningful progress on each of these initiatives.

Innovation is the key ingredient that drives the creation of Globalstar's new products and services. These product creations led to new market development and ultimately increased revenues. We believe that expanding the marketplace for mobile satellite services is essential if we are to succeed in growing our revenues, subscriber base, and income. Innovation also helped reduce our operating costs throughout the year. Our acquisition of innovative product designer and SPOT Satellite GPS Messenger manufacturer Axonn paved the way for our move to Louisiana and the implementation of various initiatives that have reduced operating costs for Globalstar.

Deployment of our second-generation constellation is itself securing our space segment with satellites designed to last for the next 15 years. With each successful launch of our new satellites, we move the Company a step closer to revitalizing our MSS two-way or duplex satellite communication business, which in the past generated significant EBITDA. Innovation drives the development of our new award-winning products, and they in turn drive our unique MSS SPOT consumer retail business, where we have now received orders for more than 280,000 units worldwide. Given the substantial growth in wireless broadband services in the US, we believe our global spectrum assets are more valuable than ever, and we continue to strategize on how to best to utilize and monetize our spectrum authority.

Now let's go over our highlights for the year, and you will see how we have successfully made important progress on each of our strategic goals in 2010. October 19, 2010, was a momentous day in the history of Globalstar, as we launched our first six second-generation satellites. Tony will be here shortly to provide us with an update on how these satellites are doing and the latest news regarding our satellite constellation. Throughout the year, I am proud to say that our role as developer of new and innovative mobile satellite products and services was further underscored as the new and enhanced SPOT Satellite GPS Messenger began to ship in large quantities.

SPOT's innovative technology was also recognized by TIME magazine when it was named to the list of the 100 all-time greatest and most influential gadgets. Throughout the year, we continued to demonstrate our engineering and consumer product design prowess by introducing SPOT HUG and the new DeLorme SPOT Communicator. The SPOT HUG received an enthusiastic welcome by dealers and customers at our demonstration display at the 2010 International Boat Show. We expect to introduce the same product concept into other potential channels such as motorcycle, automotive, and RV camper markets in the near future.

And perhaps the most significant demonstration yet of our commitment to growing the retail consumer marketplace for MSS, we introduced SPOT Connect at this year's Consumer Electronics Show in Las Vegas. SPOT Connect is a small satellite communicator that wirelessly syncs to iPhone and Android smartphones and other devices via Bluetooth. It provides one-way messaging connectivity using the Globalstar satellite network for sending GPS location-based text messages to friends, family, and co-workers. SPOT Connect also provides the user with SPOT Satellite GPS Messenger features, which are initiated through the SPOT Connect app on smartphone devices. Like the DeLorme SPOT Communicator, SPOT Connect received numerous accolades at this year's CES show, and we are excited about the prospects for this innovation and what we believe to be revolutionary new MSS consumer products.

Thanks to the market success of Globalstar's enhanced new SPOT product, as well as the launch of our other innovative Simplex data and consumer market products, the Company increased total revenue during the year and completed the 12-month period ended December 31 with over 439,000 total subscribers, or nearly 49,000 more than it had at the end of 2009. In the summer of 2010, Globalstar announced a relocation of its headquarters and other activities to Covington, Louisiana. This move maximizes the benefits of our 2009 acquisition of Covington-based satellite asset tracking and innovative consumer messaging product manufacturer Axonn. Globalstar is incurring lower operating costs, including an expected 20% to 25% decrease in payroll expenses in 2011 for those functions that have been relocated. The Company took advantage of Louisiana's economic incentives and expects to take advantage of further future tax cuts associated with a host of state programs. By introducing four new MSS consumer products to the marketplace in 2010 and 2011, Globalstar demonstrated it has become the first mobile satellite company that benefits from decreased pre-production costs and shorter time to market for its integrated wireless and satellite-based consumer and commercial products.

For those of you new to these calls, Globalstar is authorized to utilize approximately 25 megahertz of global L- and S-band mobile satellite spectrum, which we use to provide service to our more than 439,000 subscribers around the world. Throughout the year, Globalstar continued to focus on maximizing the value of its global wireless spectrum assets by renewing its efforts with regulatory bodies, both domestically here in the United States and abroad. In July of 2010, the Federal Communications Commission initiated proceedings to make additional mobile satellite services or MSS spectrum available for mobile broadband networks. The FCC announced it had taken steps to make additional spectrum available for new investment in mobile broadband networks by promoting flexible use and removing barriers while ensuring robust mobile satellite capabilities. Globalstar continues to participate in the ongoing proceedings regarding its ancillary terrestrial component, ATC, authority, and ATC gating requirements. Globalstar also applauds the recent decision which permits MSS provider LightSquared to offer terrestrial-based wireless broadband services using its mobile satellite spectrum. The FCC procedure was granting LightSquared the necessary waiver for its integrated services gating requirement after the company launched its satellite into orbit.

As Tony will discuss in a few moments, all six of the new satellites launched in October are now operational and have started to provide service in international markets outside of North America. On March 18, 2011, the International Bureau of the Federal Communications Commission granted Globalstar authority to operate its second-generation satellites within the United States. This authority will become effective once Globalstar completes registering the constellation with France, which we expect to occur in the near future. Once authorization is completed, the operational satellites will immediately begin to provide services for North American customers. I am also pleased to say that Globalstar has received an amendment from the COFACE bank syndicate, providing the Company the ability to complete registration of the new satellites with the French regulatory authorities.

In a few minutes I will have more to say about our key strategy initiatives, but at this time, I will pass the call over to Tony so he can provide us with the latest information concerning Globalstar's current and second-generation satellites.

Thank you, Peter, and good afternoon, everyone.

As many of you know, on October 19, 2010, Globalstar successfully launched the first batch of six second-generation satellites into low earth orbit onboard a Soyuz rocket using a Fregat upper stage. Since 2006, Globalstar and Thales Alenia Space have focused their design, production, and operations experience to build and launch an improved satellite using the latest proven technologies and in a low earth orbit constellation configuration, so that Globalstar can once again offer the highest quality voice and data service to our more than 439,000 voice, Simplex data, and SPOT customers. In December, we announced that we added the first of our new second-generation satellites into our constellation and went into operations providing service exactly as we had planned, and we are very pleased with its performance. Today, I'm happy to announce that all six satellites are now providing services outside of North America, bringing an increase of over 15% to our coverage worldwide. These six satellites joining our constellation demonstrate the extensive effort and accomplishments provided by the Thales Alenia Space, Arianespace, and Globalstar employees during the last six months to initiate our return to reliable duplex voice and data service. We congratulate and express our appreciation to our team as we turn our focus and efforts towards the upcoming second launch of Globalstar's new satellites.

We are also very pleased to confirm the upgraded operations of our Satellite Operations Control Centers in Milpitas, California, and Eldorado Hills, California, that are now operating and commanding the first- and second-generation satellites simultaneously using the Thales-provided control network facility software and hardware. These control centers remain critical in the assumption of control and operations of all Globalstar satellites, as Thales Alenia Space trains Globalstar personnel to maintain our constellation orbiting at 1,414 kilometers or 870 miles above the Earth. Our new second-generation satellites are fully compatible with Globalstar's current mobile satellite voice and data products, including our lineup of SPOT consumer products. They have a design life of 15 years. We, therefore, expect our new constellation will secure our space segment to beyond 2025. Our initial in-orbit test and service operations indicate to date that the design specifications and service features have been demonstrated successfully.

So with our new satellites beginning to provide service, our Call Times Tool, or CTT, now includes these satellites as part of our network for our subscribers' usage projections. This includes availability of our two-way voice and duplex data. Coverage is vital for our customers who regularly make use of the CTT to forecast when they can reliably make and receive calls several days into the future. As all of the new satellites become operational, service availability and reliability improvements will benefit our satellite telephone voice and duplex data customers. With each subsequent launch, these customers can expect a progressive return to the high quality system access and data session performance metrics customers enjoyed before 2007.

The second batch of six satellites have been shipped from Thales' facilities in Rome, Italy, to Baikonur. We have already initiated pre-launch processing of these satellites, where they will be retested, fueled, and (inaudible), assembled with the Soyuz rocket, and ready for launch, presently scheduled for the middle of May. Now, with the proven launch preparation and launch campaign, we anticipate that our remaining launches will take place between 60 to 90 days following each successful launch. As a parallel effort, our satellite control centers have begun to reposition selected first-generation spacecraft to make room for the additional second-generation satellites. During this pre-launch preparation process, certain first-generation satellites have been positioned for future de-orbiting once the second-generation satellites reach their orbital position and begin offering service.

So in summary, we expect a total of 24 satellites will be launched and integrated with the eight first-generation satellites that were launched in 2007. Globalstar will then have a constellation of 32 satellites capable of providing duplex, voice, and data service, machine-to-machine messaging and SPOT services worldwide.

I'll now pass the call over to Dirk Wild, who will discuss the financial performance and operating highlights for 2010.

Thanks, Tony.

We believe 2010 represents an inflection point for Globalstar financially, as we generated the first annual revenue growth since 2006 by driving growth in our consumer business and commercial Simplex business, while continuing to minimize the reductions in our duplex business. As shown on slide 15, revenue grew to $67.9 million in 2010 from $64.3 million for the prior year, representing growth of approximately 6%. We experienced growth in both our SPOT and Simplex businesses, as total revenue from these markets increased 47% and 129% over 2009, respectively. This growth was driven primarily by increased SPOT service and equipment sales revenue due largely to customer demand for our SPOT 2 device, which offers an improved form factor and functionality over the original SPOT Satellite GPS Messenger.

The growth in Simplex revenue was primarily the result of the benefits of our December 2009 acquisition of Axonn and the revenue synergies realized from this transaction. The combined revenue growth of SPOT and Simplex were greater than the reduction in our duplex revenue, as total duplex revenue fell from $32.6 million in 2009 to $25.5 million in 2010. We believe that, concurrent with the remaining launches of our second-generation constellation to improve service quality, our duplex business is poised for significant growth.

Slide 16 highlights the Company's annual cost of services and marketing, general, and administrative expenses. These expenses have decreased from $85.4 million in 2009 to $73 million in 2010, a decrease of approximately $12.4 million, or approximately 15%, due to top cost savings initiatives, including reductions in stock-based compensation expenses and cost savings due to the relocation of certain functions to Louisiana and other efforts to reorganize and streamline the Company's operations. Cost of services decreased from $36.2 million to $31.2 million, a decrease of approximately 14%, and MG&A decreased from $49.2 million to $41.8 million, a decrease of approximately 15%.

The management team remains focused on improving our cost structure, right sizing the Company's operations throughout the world, and allocating the proper resources to drive revenue and cash flow growth. With the increase in revenue and decrease in cost of services in marketing and general and administrative expenses, the Company's adjusted EBITDA loss improved from $8.5 million for the year 2010 versus $12.6 million for 2009. Net loss increased from $74.9 million in 2009 to $97.5 million, primarily due to non-cash charges in 2010, including $10.9 million for reduction in the value of equipment, $3.3 million for the reduction in the value of assets, and $30 million of derivative losses.

Globalstar ended 2010 with approximately $120 million of liquidity, including our year-end cash balance, remaining availability under co-pay senior debt facility, and our $60 million contingent equity account. In order to complete the first four launches of our second-generation constellation, including payments due to Thales, Arianespace, and amounts due for launch insurance, as of December 31, 2010, we had approximately $86 million of remaining capital expenditures associated with the first 24 satellites. Note that this excludes any capital expenditures associated with our ground upgrades, and any potential additional satellite construction on the launch payments. Our ability to fund these initial initiatives will be a function of the Company's future cash flow generation and potential additional financings which have not yet been arranged.

In closing, 2010 represents a watershed year for Globalstar, highlighted by a number of strategic operational and financial milestones. During the year, we successfully completed the first launch of our second-generation satellites, we continued the development and market introductions of our consumer products suite, we successfully transitioned the Company's headquarters from Silicon Valley to Louisiana and restructured a number of core operating departments, and continued the investment and development of our second-generation ground technology.

In addition, in 2011 we produced SPOT Connect, which is now available in the marketplace. We feel that this product has a significant market opportunity in both new and existing distribution channels. SPOT Connect represents another example of the Company's unique ability in the MSS space to introduce innovative, award-winning products to the consumer marketplace. We will continue to focus on new product development, including future two-way product offerings when our duplex service improves. We feel that the consumer market -- the consumer satellite market is largely untapped and represents a significant opportunity for the Company, and we will continue to look for ways to penetrate this market, including using our established consumer points of distribution. We are working hard to reintroduce quality duplex service throughout 2011, and when combined with our growth of our Simplex and SPOT businesses, we believe that the Company is positioned for significant growth.

I'll now pass the call back to Peter for some closing remarks.

Thank you, Dirk.

As I mentioned earlier, innovation, new market development, increasing revenues, and decreasing costs were strategic goals for the Company during 2010. I am pleased to report that we made progress on each of these during the year while initiating the deployment of our second-generation satellite constellation. With our new constellation, Globalstar is on the verge of once again offering high value and reliable satellite voice and duplex data services around the world. We have also evolved into a design house for innovative, award-winning, affordable MSS consumer retail products. Because of this, Globalstar's positioning itself to be the industry leader, offering the world's most extensive lineup of high-quality mobile satellite services to the broadest range of commercial and retail consumer customers around the globe.

Thank you, and I look forward to speaking with you again in May when we report our first quarter results.

Thank you Peter. That concludes the prepared portion of the presentation. We will now take the opportunity to answer questions. Operator, please proceed with the first question.

(Operator Instructions). It will just be a few moments while we compile a list of questions.

Our first question comes from the line of Marco Rodriguez with [Howengate] Security. Please proceed.

That's Stonegate Securities. Thanks for taking my questions.

I was wondering if you could provide a little bit of an update in regard to the increase in your global coverage and call availability with each successive launch of your new satellites.

Yes. Tony, would you like to take that?

Certainly, Peter.

Marco, yes. We can give you a round figure as to how it will increase. Remembering that we already have eight of our first generation satellites in space, we will expect an increase of between 15% and about 20% each time we have a successful launch of six satellites being placed into service.

Okay. That's helpful.

And then I was wondering if you could discuss Globalstar's expectations for the retail ARPU, once you start to finalize here these new satellite launches, from a marketing perspective. How should we be thinking about that? And then also, how should we be thinking about growth rates for new sub additions in retail and also in your SPOT business?

Yes, Marco this is Dirk.

You know, I think ARPU is certainly going to be a function of the marketplace at the time. But you'll remember that our ARPU back in 2006 when we had a healthy constellation was around $60 at the retail for our duplex products, and we would expect that we would be able to get near that number again, depending on market conditions.

What was the second half of your question?

Growth rates for new subs for retail and SPOT?

Again, you know, that's difficult to predict exactly, you know, when that's going to occur and how fast that's going to occur. But as we said, we think there is not only a significant portion of the market that's been untapped on the consumer side, but also we believe that we'll be able to recapture market that we lost from 2006. So I'm not sure if we can give you a specific number, but we're optimistic that it will be good.

Okay.

Maybe you can address that fact that obviously right now, your ARPU, your retail ARPU, is lower than most of your competitors out there. Do you foresee yourself from a marketing standpoint or a strategy standpoint as far as trying to match their ARPUs, or do you try to envision yourself coming in slightly underneath to grab that market share?

Certainly, it's -- our ARPU right now is much lower than the rest of the marketplace, and we will raise our ARPU to not necessarily match. I think our strategy has always been to be the low-cost provider on the lower end of the scale, but certainly, we'll get much closer to that level.

Okay. That's helpful.

I was wondering if you guys could address the competitive landscape as it relates to your future plans with ATC. Specifically, one of your competitors has signed Open Range, even Best Buy and obviously making a lot of noise about other licensing deals. How are you guys thinking about that?

Tony, do you want to address that?

Certainly.

The real focus that we have in looking at new partners has been to pick the best one that matches Globalstar's capability from the standpoint of the way our system operates. And we feel very, very strongly that in the future, we'll be able to establish an operations with the provider that matches Globalstar's operations very well, and then increase the use of our MSS spectrum accordingly.

Any color in terms of the type of entity that you're thinking about?

From a specific organization, I don't think we really want to provide any names, but I can tell you that we're very open to the major carrier -- carriers as well as a number of other providers of broadband services that are in the industry today.

Okay. Fair enough.

And in terms of the newly-launched SPOT HUG, can you talk a little bit about any marketing campaigns that are going on?

I don't know whether you saw the recent press release, but we have a large number of West Marine stores who are now carrying SPOT HUG, and we expect to see increases in the number of West Marine stores carrying it. We are covering every retailer and big box operator who is in or near the marine business, and I think -- you might recall, I also commented that this product will most likely serve needs in the RV market and the motorcycle market as well.

Right. I'm sorry. Let me rephrase. Are any marketing campaigns being conducted to ramp these sales like the SPOT HUG that just got released -- I did see that press release -- that are Globalstar-initiated, or is that marketing up to the big box retailer, if you will?

I'm not sure I'm tracking with your question.

So, the SPOT HUG release that you just had, is West Marine going to be responsible for the marketing, or is Globalstar going to have a marketing push?

No. Globalstar is. And we have an extensive web-based marketing program, as well as in-store put ups and merchandisers that will promote SPOT HUG.

Okay. And lastly, and I'll jump back in the queue. Can you provide any sort of an update on the integrated mobile handset chip?

I don't think we're prepared to talk about that at this time. As we make progress, we will certainly let our investors know.

Great. Thanks a lot, guys.

Our next question comes from the line of Ryan Esposto with Sterne Agee. Please proceed.

Hi. Good afternoon.

Just a couple housekeeping questions. I know it will be released with the K, but what's your closing cash balance? What's your cash balance at the end of the quarter, and what was the availability on the co-pass facility?

Ryan, I had that in my slide. I think we have about $33 million in cash and about $27 million of availability left in the facility.

Okay. And during the quarter, just between when you last report -- you know, when we last spoke. You guys had a waiver as it relates to the co-pass facility, where they essentially -- it seems like to me they pushed out to where you had to start servicing interest [in] before the debt starts amortizing. Can you walk me through that and when you expect those payments to start to come due? And, you know, just, quantify on both interest and amortization servicing costs?

Yes. So that amendment was in December, and what we did was, you know, this was largely a result of the timing of the satellite launch, which, you know, as you know was impacted by the earthquake by Thales' facilities and the earthquake that they experienced. So the banks recognized that and pushed back our repayment schedule, and adjusted some of the financial covenants.

The first repayment is six months after the last launch, which we're expecting, well, which we haven't, we don't know exactly what the schedule is, but you know, we've announced that our next one will be in May, and then the following two, 60 to 90 days thereafter. So it's eight months. I'm sorry. Eight months following the last of the four launches.

So if you do the math in the last launch could, you know, could be the end of this year and so then you'd have some kind of interest expense servicing beginning eight months after that, right?

We have interest expense current, semi-annually.

Okay.

So we pay, we have an interest payment in, we've already paid in Q1 of 2011, and we'll pay in Q3 and then again Q1 of 2012.

Oh, sorry. The amortization schedule then. I'm sorry. I just --

Right. Our first principal payment is what I was referring to with the eight months after the launch date.

Got it. Sorry.

And that first payment of principal will be -- what's the figure, more or less?

It's about $17 million.

$17 million, okay. Okay.

And then just looking at your guys's adjusted EBITDA, and loss of minus $4 million more or less, you know, going forward what's your guys's plan on, you know, trying to get that closer to break even or generating positive EBITDA? Do you have any timelines or can you quantify any of it?

Yes. I mean, it's, you know, it's twofold. It's increasing revenues and controlling and/or decreasing cost. Which, you know, we, we've demonstrated, we've been able to do, we just, we're just not quite there, but we've made significant progress.

You know, we're going to increase revenue with, with both the -- our existing SPOT and Simplex products, as well as the new products we've just introduced. And then obviously once we can have a full duplex rollout later this year, we expect significant revenue growth at that point. And you know, we've already put in place many cost savings initiative and have already realized those, and we'll expect to continue to keep, to keep our costs under control as we move forward. So the combination of those two should get us there in due order.

But, you know, as I model you guys out, should I just take, just assume that, you know, this run rate that you had in December or something you carry forward for the whole year or, I think you're probably getting into where, I'm trying to work through your model and your liquidity and trying it understand all the moving parts and of course, you guys amended what you did with the Hughes facility or the Hughes agreement, supplier agreement as well. So I'm trying to go through your model and understand, you know, how you get to servicing some of these things coming up and understand how you guys take care of that?

You know, I'm a big advocate of your service. I love what you guys are doing on the SPOT side. I'm trying to understand your liquidity, and certain events are occurring, and I've seen that adjusted EBITDA line go the direction -- I'd rather see it going positive versus, you know, staying here. So I'm just -- can you give me any more color around that, or not prepared to at this time, or I'm just trying --

You know directionally, let me give you a little color. I think we've said, we certainly expect revenues to increase here in 2011. We don't provide any specific guidance, but, you know, 2010, you know, didn't have as many new products as we are rolling out, including HUG, which we rolled out at the end of 2010. SPOT Connect now in 2011. And in addition to, you know, duplex roll out, certainly in the latter half of 2011. So I'm not sure if I can give you much more specifics than that, but I would be disappointed if revenue remained the same.

Yes. And I guess I would be disappointed if we're not generating positive EBITDA toward the back half of this year, but of course, we didn't mention the $60 million in contingent equity you have as well, which is part of the pie for your liquidity, so that's just to be completely fair. Okay.

As it relates to the ATC spectrum and the question prior to myself, is there a gating factor right now as it relates to your satellite not being 100% at this point that you can't have these conversations or enter into agreements? And can you try to give me some color around that?

Tony, why don't you talk about the gating requirements and where we stand.

Yes, I'd be pleased to.

Ryan, first of all, the gating criteria are the ones that we've mentioned in previous calls. You know, essentially having your constellation in place, and a few others that require coverage over the United States. But to specifically answer your question, no, these gating criteria do not prevent us at all from having very in-depth discussions with various different organizations. And I can assure you, we're proceeding to do so, so that as we meet the gating criteria later this year, we'll be able to bring forward one, if not, you know, two or three different possible business propositions.

Great. So you're having discussions, but you can't enter into a -- you can't actually use your spectrum until the end of this year when all the satellites are in place?

That's a correct interpretation.

Okay. Perfect. Okay.

Well, I'll get back in queue. Thank you guys for the answers.

Our next question comes from the line of Lily Wu with it TGRA Capital. Please proceed.

Oh, thanks. I actually wanted the update on ATC, and I just heard it. Thank you very much.

Thanks, Lily.

Our next question is from the line of James Koch with SSHS. Please proceed.

Good afternoon. I'm interested in what comments you might make on the role of LTE, Lima Tango Echo, and Globalstar's L-band and how that might relate to the preceding questioner's integrated handset chip or MyFi devices. Thank you.

Okay. Tony, go ahead.

Well, let's see. It's obviously, James, a complicated question in a sense as to how we would implement LTE and specifically, you know, which form of it supplied by the various manufacturers. Let me generally say that we, of course, look at LTE being one of the modulations that can be used with our spectrum, and we continue to study which organization would best benefit by our partnership with them, and specifically would it meet or provide the highest amount of capacity using the L-band or the L-band spectrum and the S-band spectrum that Globalstar currently has.

Well, thank you. I was particularly interested in the announcement by LightSquared as to that EGAL Qualcomm LTE multi-modal solution that's built into the MDM 9600 chip set. And I was just going hoping that you were going to be looking at that and allowing our revenue to really soar.

James, we certainly are. We're keeping our eyes open on all the technology, and as soon as it becomes proven, much like we've done with our satellites and our space segment, we'll be embracing those different wave forms and capacity generators for our network.

Best wishes for great success. Thank you.

Thanks, James.

Operator, are there any other questions?

We have no other questions at this time.

Okay. Well, with that, we'll bring the conference call to an end.

Thank you again, everyone, for joining us, and please be reminded that later this afternoon, an audio recording of this conference will become available by telephone dial-in and a webcast recording, and a copy of the presentation will also be available on our Globalstar website. Thank you, and good afternoon.

Ladies and gentlemen, that concludes today's conference. Thank you so much for your participation. You may now disconnect, and have a great day.