Apple has committed approximately $1.5 billion to satellite communications company Globalstar to expand iPhone services.
According to a regulatory filing on Friday, Globalstar reported that Apple is also planning to buy $400 million in class B shares in the business that runs the newest satellite network, with the transaction expected to finish on November 5.
Globalstar noted in the SEC filing that Apple’s primary investment will fund a new satellite constellation, additional ground infrastructure, and an expanded global license agreement.
Apple launched its Emergency SOS via satellite function with the iPhone 14 series in 2022, leveraging the infrastructure of the US-based satellite services operator GlobalStar.
The US phone maker introduced two-way satellite messaging in iOS 18 while outside of cellular coverage.
This function is accessible on iPhone 14 and newer handsets from compatible carriers in the United States and Canada.
It remains to be seen whether Apple will begin charging users of the iPhone 14 series for access to satellite messaging once the free term expires next year.
The transaction with Globalstar comprises $1.1 billion in cash, $232 million of which will be used to pay down the satellite company’s current debt, as well as a 20% stock position. The transaction is anticipated to close on Tuesday.
The arrangement is a significant revenue increase for Globalstar, as the terms allow for the acceleration of certain yearly service payments worth $30 million.
Globalstar added that a portion of the cash earnings will be used to settle current debt as well as to fund the expansion of its satellite network.
Globalstar stock rose as much as 36% in Friday trading from its previous closing of $1.05 per share.
We earlier reported that with the impending iOS 18.2 update, iPhone owners worldwide will be able to customise their default messaging and calling apps.
