In a regulatory filing on Friday, the firms revealed that Apple had committed roughly $1.5 billion to Globalstar, a satellite communications company, to finance the growth of iPhone services.
The internet giant’s agreement with Globalstar includes a 20% stock investment and $1.1 billion in cash, of which $232 million will be used to pay down the satellite company’s existing debt. Tuesday is when the deal is anticipated to close.
In order to facilitate the 2022 launch of iPhone emergency satellite texting, Apple has already spent hundreds of millions on Globalstar services.
It is one of numerous initiatives in the market for direct-to-device, or D2D, satellite connectivity, which offers service to unaltered devices like cell phones straight from space. SpaceX, AST SpaceMobile, Iridium, Lynk, and EchoStar are also working on projects in this arena.
In Friday’s trade, Globalstar’s shares surged 31.4%, closing at $1.38 per share.
Globalstar stated in the filing that it will keep giving Apple around 85% of its network capacity.
Globalstar will be able to expand its ground infrastructure and buy new satellites with the increased funding. To expand and improve its constellation in low Earth orbit, Globalstar has already ordered up to 26 satellites, in addition to the 31 satellites it presently operates.