Globalstar franchisees reduce pricing

Globalstar USA and Globalstar Caribbean, regional franchisees for satellite-based mobile communications provider Globalstar LP, are cutting prices for all bundled single-line service plans they offer.

The new Personal Reach plans replace previously offered Beyond Service plans and provide savings on access fees ranging from $20 to $100 per month--and on additional per-minute charges--depending on the category selected.

The entry-level plan still costs $24.95 per month, but now includes five voice or data minutes; the previous entry-level plan offered zero minutes. The 50-minute monthly plan has been reduced $20 to $69.95, with an additional airtime rate of $1.39 per minute, down 10 cents from the previous plan.

The Personal Reach 100 plan offers 100 minutes per month for $119.95, a reduction of $30, with additional minutes priced at $1.19, a reduction of 20 cents. The 250-minute monthly plan now goes for $249.95, a reduction of $50, with additional minutes reduced 20 cents to $0.99. Finally, the 500-minute monthly plan is available for $399.95, a savings of $100 over the previous plan, with additional minutes reduced 10 cents to $0.89.

In addition, all plans now offer free call-forwarding service.

“This price change is a follow-up to our Business Reach price plan that came out earlier in the month, and is simply a stimulus for taking us to the next stage of growth in our business," said Andrew Radlow, director of marketing for U.S. "This is not a knee-jerk reaction or some giant slashing of prices, but is what you would expect for a mature company that has a long-range vision of growing a panoply of satellite-based services."

However, according to Greg Caressi, research manager for Frost & Sullivan’s satellite communications group, Globalstar needed to do something significant.

“They are doing this because they need more subscribers,” he said. “They have a good service; they just have a problem getting subscribers. They currently are in the process of refinancing in order to get through the end of this year. It’s reorganize or else file bankruptcy.”

Caressi added that the price reductions might not be enough to jump-start Globalstar’s business, which the parent company has acknowledged hasn’t grown at the pace originally expected of it.

“It’s bothersome that their target markets are limited in scope and are the same markets Inmarsat has gone after for about 10 years,” he explained, noting that Inmarsat has amassed only about 200,000 subscribers to date. “It is hard to build a business that way. The real success [may] lie in the rural telephony fixed satellite side.”

Radlow bristled at Caressi's perspective, and was particularly dismayed with the analyst's comparison of Globalstar to Inmarsat, which he says is akin to comparing apples to oranges.

“[First], the prices aren’t going to get to the point where the rural market is going to become a viable target market for us in the immediate future,” Radlow explained. “[Second], Inmarsat is a fixed antenna array and very expensive. Ours is very inexpensive, and the kind of thing people are going to develop to … the kind of thing that is going to really boost the product and service offerings that are going to speak to a much larger audience.”

Kelly Carroll, associate editor-wireless, contributed to this story.