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Consortium to Put $1.8 Billion in Phone System : Telecommunications: Partnership, to be known as Globalstar, will invest in satellite-based network.

March 25, 1994|From Times Staff and Wire Reports

A worldwide consortium of 10 telecommunications companies, including PacTel Corp., announced plans Thursday to invest in a $1.8-billion satellite-based telephone network aimed at undercutting competitors' costs by simplifying the connections between Earth and space.

Led by Loral Corp. and Qualcomm Inc., the partnership, called Globalstar, will offer cheap rates by taking advantage of existing networks operated by local phone companies, such as the regional Bell operating companies and their foreign counterparts. It is expected to begin operating in 1998.

Among the new partners is PacTel, the Walnut Creek, Calif., wireless communication company that on April 1 will be spun free of Pacific Telesis Group, also the parent company of Pacific Bell. PacTel will invest $37.5 million for an 8.3% stake.

Forging worldwide telecommunications links, either by satellite or by fiber-optic technology, has grown into an intense focus of competition, as governments and private companies seek to develop information networks.

By using existing local ground networks to beam calls to an international satellite network, the Globalstar system will be able to use fewer and less complex satellites than other mobile communications systems, its developers say.

Loral and Qualcomm's partners are the United Kingdom's Vodafone, France's Alcatel Espace, Italy's Alenia Spazio, PacTel and Space Systems/Loral of the United States, the South Korean companies Hyundai and Dacom, and Deutsche Aerospace in Germany.

For PacTel, soon to be AirTouch Communications, this agreement marks the first major foray into long-distance service.

Once it is independent of the local California phone company, it will be freed of restrictions on offering long-distance service. PacTel will have exclusive rights to provide mobile service in the United States, Japan, six other countries and the Caribbean region.

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