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US Rural Wireless Expansion
Open Range Receives Financing to Provide Mobile Satellite and
Wireless Broadband Service Using Globalstar ATC Spectrum
Authority
Open Range Plans to Offer Wireless Broadband Services to Over
500 Rural Communities
MILPITAS, Calif - Globalstar, Inc. (Nasdaq:GSAT), a leading provider of mobile satellite voice and data services to businesses, governments, and individuals, announced that Open Range Communications, Inc. has secured approval for a $267 million broadband loan from the US 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.
According to the USDA press release which announced the Open Range
transaction, the USDA Rural Development's mission is to increase
economic opportunity and improve the quality of life for rural
residents. Rural Development has invested nearly $91 billion since 2001
for equity and technical assistance to finance and foster growth in
homeownership, business development, and critical community and
technology infrastructure. More than 1.7 million jobs have been created
or saved through these investments.
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