Clearly if the arbitration found that the contract had been terminated then one would (at least) expect the price to be subject to renegotiation. The press release certainly doesn’t say that “Thales has simply provided Globalstar Qty. 6 satellites at the Qty. 24 price” or that Thales even agrees that the contract for any of the remaining satellites is still valid.

We believe that Thales has simply provided Globalstar Qty. 6 satellites at the Qty. 24 price. The contract for the second 24 was about €220MM. OR €9.166MM per satellite which is €55MM for six. Globalstar claims the contract for the second 24 is still valid, while Thales claims it was terminated by Globalstar for convenience. Now going to arbitration.

Notwithstanding, this deal is a very good deal for Globalstar where they will receive the 6 additional satellites at the Qty. 24 pricing of the current “disputed” contract, irregardless of the ruling of the arbitration hearing on the remaining 18. Globalstar already has a fifth launch option with Arianespace, which we assume will take place from French Guiana in late 2013.

The timeline for the “expedited delivery” is interesting as the 6 satellites will not be available even on “fast track production” until the middle of 2013. That figure includes the “long-lead time” assemblies already in house. Which might raise questions about how long Iridium can wait for “hosted payloads” without it effecting their 2015 launch prediction. We would assume that satellites would have to be delivered to Thales subcontractors in the US by mid-2014 in order to achieve an early 2015 launch.

As far as any further failures goes. We attempt to ascertain the number of satellites in service through a process of averaging call availability versus non-availability via the Call Times Tool. We use the default phone location in the application and add the “call available” and “call unavailable” times over a four day period. Thus we are able to obtain a “average call availability” for the four day period. When satellites are removed from service, the average decreases, when satellites are added, the average increases. Not a 100% fool proof test, but close enough for estimates on satellite removal/addition given the 4 day period to average over.

We have also been conducting satellite performance tests between the older 2007 launched satellites and the new second generation satellites. Generally, we have found a service link connection for voice now remains established to ~2,300 miles from a Gateway, vs about 1,600 miles for the first generation satellites. The Globalstar handset can be programmed to tell you which satellite it is connected to, and we use this feature to verify new vs. old satellites during connection. . We then compare this to the TLE sets in SaVi. You will also notice that there are periods in the CTT that it frequently shows satellite availability for ~23 minutes. We have derived, in our opinion, that this is connect time for a single second generation satellite, vs. the ~15 minutes of a 2007 satellite. Thus we expect voice and data connectivity coverage areas to closely mimic those currently provided for SPOT, which greatly expands potential coverage over open oceans.

ORBITRAX