China Telecom (Hong Kong) Group
Ltd. has agreed to invest $37.5 million to become a full partner in
Globalstar L.P. China Telecom, a dominant provider of fixed and
wireless services in China, along with CHINASAT (China Telecommunications Broadcast Satellite Corporation), will retain the sole rights to provide Globalstar services in China. Both companies, formerly wholly owned by China's Ministry of Posts and Telecommunications (MPT), are expected to be wholly owned and supervised by China's newly formed Ministry of Information Industry (MII).
"The addition of China Telecom as a full partner solidifies
Globalstar's commitment to bringing the promise of mobile satellite
communications to China's 1.2 billion people," said Bernard L.
Schwartz, chairman and chief executive officer of Globalstar L.P. and
of Loral Space & Communications, Globalstar's largest equity owner.
"China is installing 15 million lines of switching capacity and
100,000 kilometers of fiber optic cables each year. But built-up
demand cannot be satisfied. China's national telephone installation
waiting list is over 5 million, and it is increasing every day.
Globalstar is an efficient, affordable and timely solution to meeting
this incredible demand."
China Telecom and CHINASAT will manage all Globalstar operations
in China. China's first Globalstar gateway is nearing completion in
Beijing, with subsequent gateways to be built in Guangzhou and
Lanzhou, where siting and survey work is underway. Including China,
Globalstar now has service provider agreements in more than 100
countries, covering 85% of Globalstar's business plan.
China Telecom (Hong Kong) Group Ltd. is a dominant
telecommunications services provider in China and serves nearly 10
million cellular subscribers. CHINASAT, based in Beijing, is
responsible for managing and operating China's domestic civil
telecommunications and broadcast satellite systems. CHINASAT owns
several telecommunications satellites, controlling them from its
first-class telemetry tracking and control earth station in Beijing.
It also operates China's largest VSAT (very small aperture terminal)
networks.
China possesses the world's largest population and is the
fastest-growing major economy, with real growth of 12 percent a year.
China's telephony penetration rate is currently less than 5%, and some
500,000 rural Chinese communities are in need of improved
telecommunications services.
Some subscribers in China will use mobile terminals, similar to
today's cellular phones, with dual-mode capability so users can switch
from satellite telephony to conventional cellular telephony as
required. Users in China's rural and remote areas may make or receive
calls through fixed-site telephones, similar either to phone booths or
ordinary wireline telephones. Subscriber terminals will communicate
through a Globalstar satellite to one of China's planned gateways or
ground stations that in turn will connect calls into China's existing
telecommunications network.
The Globalstar system, comprising 48 low-earth-orbiting (LEO)
satellites and a global network of ground stations, will allow people
in areas of the world with inadequate or non-existing
telecommunications infrastructure to make or receive calls using
hand-held, vehicle-mounted and fixed-site terminals. The Globalstar
system will also provide data transmission, paging, and facsimile
services. The first four Globalstar satellites were successfully
launched on February 14, 1998, and Globalstar expects to launch a
total of 44 satellites by the end of the year.
