In a significant move to bolster its satellite communication services, Apple has deepened its collaboration with satellite services provider Globalstar, committing $1.1 billion to expand the company’s satellite infrastructure. This partnership, an extension of a longstanding relationship between the two companies, aims to enhance Globalstar’s mobile satellite services (MSS) network and introduce a new constellation of satellites, positioning Apple to offer improved emergency communication capabilities to iPhone users worldwide.
The agreement, finalized in October 2024, builds upon Apple’s initial launch of its Emergency SOS via satellite feature, introduced with the iPhone 14 series in 2022. Leveraging Globalstar’s satellite network, the feature provided a lifeline to users in remote areas without cellular coverage, allowing them to communicate with emergency services when standard communication methods were unavailable. Now, with this expanded deal, Apple and Globalstar are set to elevate the service to support more advanced satellite messaging functions and expand its reach.
As part of the new agreement, Globalstar will construct an “Extended MSS Network,” featuring an enhanced satellite constellation and upgraded ground infrastructure. This network will enable Globalstar to allocate increased capacity for Apple’s services, enhancing the Emergency SOS feature with additional messaging capabilities. Globalstar will retain 100% of terrestrial and MSS revenue while designating 85% of the new network’s capacity for Apple’s use. Apple, in return, will hold a 20% equity stake in the new Globalstar special-purpose entity, Globalstar SPE, a financial arrangement reflecting the tech giant’s vested interest in the satellite infrastructure it relies upon to deliver these vital services.
Apple’s $1.1 billion investment in Globalstar includes a substantial prepayment covering both satellite infrastructure development and debt repayment. Specifically, the investment comprises a $1.1 billion Infrastructure Prepayment, made in quarterly installments over the construction period, which Globalstar will use to finance the Extended MSS Network’s development and operation. In addition, Apple has committed $400 million in equity, giving it a 20% passive ownership stake in Globalstar SPE. This financial framework provides Globalstar with the necessary capital to expand its satellite infrastructure, while Apple benefits from guaranteed access to the network’s increased capacity.
A critical component of the new network is two-way satellite messaging, which will be available to iPhone 14 and newer models with supported carriers in the U.S. and Canada through iOS 18. This feature allows users to send and receive messages beyond emergency situations, representing a broader application of satellite connectivity. Apple’s introduction of two-way messaging significantly enhances the versatility of its satellite services, addressing increasing user expectations for reliable communication in challenging environments. However, Apple has yet to confirm if fees will apply for this expanded service after the free trial period concludes for early iPhone 14 adopters in November 2025.
The updated services agreements further address financial and operational elements. In exchange for its expanded network capabilities, Globalstar will receive incremental service fees from Apple, linked to the cost of the Extended MSS Network and tied to the achievement of specific service milestones. These fees, including a $30 million annual acceleration payment, contribute to Globalstar’s revenue stream, which is expected to double in the first year following the launch of the enhanced satellite services. Globalstar anticipates an increase in EBITDA margin, projecting future growth in line with the operationalization of the new network.
Globalstar and Apple have established a range of contingency measures within the contract to safeguard their mutual interests. The agreement includes a provision for Globalstar to redeem Apple’s equity stake over time, allowing for an orderly exit upon Apple’s recovery of prepayment amounts. In the event of contract termination or certain breaches, Apple would be entitled to financial reimbursement or the option to convert its equity stake into shares of Globalstar common stock, based on market pricing.
This partnership underscores Apple’s strategic investment in satellite technology to support emergency and off-grid communications, aligning with the company’s growing interest in positioning itself as a leader in mobile satellite services. Apple’s approach is to leverage Globalstar’s satellite infrastructure to ensure connectivity for iPhone users across a wider range of scenarios, including locations that typically lack reliable cellular coverage. By expanding the Emergency SOS feature to enable two-way messaging, Apple is poised to provide greater functionality and value to its users, further embedding satellite services into its product ecosystem.
For Globalstar, the partnership with Apple secures a robust source of funding for its infrastructure expansion, as well as a predictable revenue stream through service fees and performance-based payments. Globalstar’s enhanced satellite capacity could also support other clients in the MSS space, with Apple’s service requirements consuming the majority of the network capacity. Globalstar retains exclusive control over the management and operation of the network, ensuring continuity of service to other clients while meeting Apple’s high-demand specifications.
The financial commitments and infrastructure upgrades embedded in this agreement indicate the scale and longevity both parties envision for their collaboration. Apple’s strategic investment not only strengthens its capabilities in providing safety-focused services but also positions the tech giant as a significant player in the satellite communication sector. Meanwhile, Globalstar benefits from Apple’s substantial financial backing, allowing it to drive innovation in satellite connectivity while enhancing its competitive standing within the MSS industry.
Apple is set to provide further insights into its satellite strategy and related technological advancements at an in-person investor day scheduled for December 2024. The company will outline its roadmap for leveraging the enhanced Globalstar network, offering investors a glimpse into Apple’s broader vision for satellite connectivity. As both companies execute on their respective objectives under this expanded partnership, the industry will be watching closely to assess the potential for satellite technology to redefine communication standards for mobile users worldwide.
