Globalstar's Satellite Ambition: Can It Stay Aloft in a Crowded Sky?

The satellite communications sector is bracing for a new era of competition as Globalstar prepares to launch its next-generation Low Earth Orbit (LEO) constellation in 2026. Backed by a $1.7 billion investment from Apple and a $768 million contract with MDA Space, Globalstar aims to solidify its position in the $20 billion satellite IoT and emergency services market. Yet as rivals like SpaceX's Starlink and Iridium ramp up their own LEO networks, the question remains: Can Globalstar avoid overvaluation and market saturation in a sector racing toward oversupply?

The Bets and the Numbers

Globalstar's plan hinges on two pillars: its existing L-band constellation refresh in 2025 and the Aurora-based C-3 system, which will support Apple's emergency SOS services for iPhones. The C-3 satellites—48 operational units plus six spares—will operate at 1,414 km altitude, leveraging dynamic beamforming and higher EIRP to improve coverage for voice, broadband, and IoT applications. Apple's 85% capacity stake secures a critical revenue stream, but the remaining 15% must also attract commercial IoT partners to justify the $1.1 billion in Apple-funded development.

Globalstar's IoT division is already showing promise. Its two-way RM200M module, launched in 2025, has driven a 47% year-over-year jump in service revenue to $48.6 million in Q2 2023, with IoT subscribers up 7.6% to 466,600. Yet these gains pale against Starlink's 1.6 million beta users or Iridium's 1.2 million commercial subscribers.

The Risks of a Crowded Sky

The sector's rapid scaling raises two critical concerns: valuation bubbles and market saturation.

1. Valuation Overreach:
   Globalstar's valuation—currently $2.3 billion—assumes its C-3 constellation will deliver on Apple's SOS promise and IoT expansion. But the company's reliance on Apple's ecosystem creates dependency. If Apple pivots to alternatives like Starlink's beta service (already testing with iPhones), Globalstar's revenue could crater. Meanwhile, its debt-to-equity ratio (0.6x) is manageable, but the Quebec facility's $768 million investment could strain margins if demand lags.

2. Market Saturation:
   The LEO market is already crowded. SpaceX's Starlink, with over 5,000 satellites, has a 200 Gbps capacity, far exceeding Globalstar's 1.7 Gbps L-band throughput. Even Iridium's next-gen satellites, launched in 2019, offer comparable IoT services at competitive prices. Globalstar's niche—low-latency SOS and one-way messaging—may not be enough to justify its valuation in a market where over 10,000 LEO satellites are planned by 2030.

Investment Takeaways

Globalstar's story is a classic “high-reward, high-risk” bet. Its partnership with Apple and IoT traction are positives, but the sector's competitive dynamics are daunting. Here's how investors should proceed:

• Hold for now: Wait for clearer signs of C-3 system performance post-2026. A delayed launch or underwhelming Apple SOS adoption could trigger a valuation reset.
• Monitor debt and competition: If Starlink's beta test gains traction or Iridium's IoT services undercut pricing, Globalstar's margins will suffer.
• Look for dips to buy: If the stock slips below $5 (its 52-week low), it could offer a better entry point, provided the Quebec facility stays on schedule.

In a sector racing toward oversupply, Globalstar's survival hinges not just on technical prowess but on its ability to carve a sustainable niche. For now, the skies are getting too crowded for complacency.

Final Note: Consider diversifying satellite plays with companies like SES or Telesat, which have broader revenue streams and less reliance on single partners.