Welcome to the Globalstar Incorporated fourth quarter 2015 earnings conference call. My name is Adrianne and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Please note, this conference is being recorded. I will now turn the call over to Jay Monroe, Chairman and CEO. Jay Monroe, you may begin.

Good afternoon everyone and thank you for joining the fourth quarter 2015 earnings call. Today, I will provide an operational and regulatory update followed by a review of the financial results by Rebecca Clary. Tim Taylor will then join us for Q&A. Please note, this call contains forward-looking statements intended to fall within the Safe Harbor provided under the securities laws. Factors that could cause results to differ materially are described in the forward-looking statement section of today's press release and in Globalstar's SEC filings. After welcoming Kenny Young, the President and CEO of wireless infrastructure and consulting firm, LCC International, to our Board of Directors during the third quarter, I would like to start the call today by welcoming Dave Kagan, President and Chief Operating Officer as the newest addition to Globalstar's management team. Dave is a satellite industry veteran previously serving as the President of ITC Global and before that as President and CEO of both, Globe Wireless and MTN. Time and time again during his career, Dave has driven substantial revenue and profit growth, making him one of the most respected operators in our industry. And though he has only been here for five weeks, he is already making important improvements to our operations. Dave has years of experience managing all of the revenue and profitability levers for satellite companies including responsibility for worldwide sales and marketing, ground and product engineering, IT, software, customer care and the constellation, all of which now report to him here at Globalstar. While our business has meaningfully improved over the past few years, Dave is charged with accelerating this growth as we enhance our product and service capabilities with the completion of the second-generation ground upgrades and introduced a host of new products. After a diligent multi-month search reviewing hundreds of…

Thank you Jay. Good afternoon everyone. Today, I will cover the primary factors contributing to our financial performance and will provide an update on our liquidity position. As Jay mentioned, we have experienced meaningful growth in our subscriber base as we see the return on our continuing investments in both new and legacy markets and successful sales and marketing initiative. These investments drove an almost 50% increase in the number of phones sold in 2015 and a 7% increase in the number of SPOT devices sold in the same period. Year-over-year, we experienced a modest increase in total revenue, despite significant pressure from the strengthening of the U.S. dollar. Without the impact from foreign exchange rate fluctuation, total revenue would have increased $5 million or 6% during 2015. Growth in our subscriber base offset the negative impacts from these currency changes. On a year-over-year basis, total subscribers increased 8% to approximately 688,000 subscribers. New SPOT customers represented over half of this increase. Service revenue increased $4.3 million, which was offset partially by a decline in revenue generated from equipment sales reflecting a decrease in the average price of our handsets. Beginning in early 2015, we lowered the selling price to drive sales and reduce inventory in advance of second generation equipment which we expect to launch later this year. Now focusing on our quarter-over-quarter financial performance. As shown on slide eight, total revenue increased 3% from $22.1 million in the fourth quarter of 2014 to $22.8 million in the fourth quarter of 2015. This increase was again driven by growth in service revenue, offset partially by a decrease in equipment revenue. Similar to year-over-year operating results, we saw expansion in our subscriber base for Duplex, SPOT and Simplex which reflected the increase in the number of units sold during the…

[Operator Instructions]. And we have Kevin Roe from Roe Equity Research on line with a question. Please go ahead.

Thank you. A couple of questions. Given your outline for launching new geographic coverage in Asia and Africa in the second half, you mentioned the Caribbean, new handsets coming out, how should we think about gross additions ramping in the second half versus how we exited 2015?

Hi Kevin. How are you this afternoon.

Good. Thank you.

I don't think we have specific guidance on the ramp, but those territories that you just mentioned, except the Caribbean, which is already up and operating and has been for some time, will be real contributors to the future growth. Africa, we opened up during this year and we expect good things from that continent here in 2016. And Asia, we don't expect much from until the latter part of the year. And that's because there are certain requirements there for us to certify products into countries that is not yet completed. And we have got a team in place over there that is beginning to work in earnest. But as I said in my remarks, I don't think we anticipate much happening there until the second half of the year. As you go forward from that though, those are areas that, for a lot of different reasons, will be major contributors to Globalstar in the future.

Okay. That's helpful. And I appreciate your commentary on expressing support for safeguards in this TLPS process. I wonder if you could bring investors up-to-date on what Globalstar has done on your proposed network operating system and your vision for that network operating system? And any other specific progress you have made on safeguards that you highlighted earlier?

Kevin, I appreciate the question but as I said in the prepared remarks, we cannot take questions today on TLPS or on the FCC proceeding. We are certainly happy to answer any other questions you have on the MSS business or on the company generally. Pleased to take those and answer them, but in the subject of TLPS, we are unable to answer additional questions on them.

Okay. And lastly, a pretty material sequential increase in EBITDA this quarter, which is nice to see. How should we be thinking about EBITDA progression in 2016 versus 2015, given all the new network spending, market launches, et cetera, that you have to do?

Hi Kevin, it's Rebecca. I would expect with increase in service revenue, which as you know is our high margin business. That would have a direct impact on EBITDA. So I would expect continued increases as we move through 2016, in given our current Duplex permissions particularly that seems to be really successful in the market and then new product introductions later on this year.

Okay. Thank you.

And our next question comes from Jason Bernstein from Odeon. Please go ahead.

Hi guys. Thanks for taking the call. A question on the MSS side, Jay, where do you think the price point has to get to on the phones or where can the price point get to? And are there any further new developments on the product side, new phones that can be featured with the second generation fleet? Just trying to get an idea of what the addressable market size is and are we still talking about the phone price at $1,000? Or can that be driven lower?

Jason, first the initial product that we will bring to the market for the second generation ground infrastructure is Sat-Fi and that device is one that we will keep driving the cost out of every day every six months. It will be a small fraction of the $1,000 that you describe, but exactly where it will price out at this moment hasn't been determined inside the company. But if you recall, when we started out with the SPOT product back many years ago, the device at that time, just the core device that was re-created in a different form factor for SPOT, was about $500. And today, we manufacture that product at a tenth of that. So that's what we have to do. The mechanisms to take a price down lower than what will start out at are well known to us as. They are well known to the industry. And they are not necessarily just about scale but it is our objective of course over time to make that product, Sat-Fi, as inexpensive as possible for the reasons that you allude to. You can make a product that costs $100, the market is quite different than if the product is $1,000. And it's our objective someday to be at $100 for exactly that reason.

So, is Sat-Fi going to be what you envision as the sort of a primary access device on the Duplex side?

We actually have a couple of different devices but over time, just as we have today, many different voice and data products, whether those are Duplex data or Simplex or future devices which are two-way, but smaller bit, all of those are initial products, followed by many more that are leveraging off of the same architecture. You think about with SPOT was. SPOT was a big Simplex product that became a SPOT. It become a SPOT2, a SPOT3. It became Trace. It was Hug and a ton of different variance in that product alone and on the industrial side they were the STX3 and they were a whole number of different products and we expect to do the exact same thing with Sat-Fi as the core product. The Sat-Fi can become a just a data product. Inside, it's got the same functionality as you would find on a data board. It just also has voice. And so there are a ton of variance and we expect to bring those to the marketplace one after another, just as we have for the last five or 10 years.

Great. Thanks.

[Operator Instructions]

Operator, we have no additional calls at this time. So I am going to thank everybody who dialed in and those that are listening to this call on the Internet today. Thank you very much for joining and we look forward to having a conversation together again in the near future. Thank you.