LightSquared, Harbinger Capital Partner’s wholesale-only nationwide Long Term Evolution (LTE) and satellite network operator, yesterday announced that it has delivered notice to Inmarsat, a provider of global mobile satellite communications services, initiating Phase 1 of a cooperation agreement which will see Inmarsat begin the process of re-banding L-Band (1GHz-2GHz) radio spectrum. The cooperation agreement was originally signed in December 2007 by Inmarsat and SkyTerra; Harbinger’s subsequent acquisition of the latter mobile satellite services provider was approved in March this year by the Federal Communications Commission (FCC).
Under the agreement Inmarsat and SkyTerra designed a phased plan aimed at addressing growing wireless broadband demand. LightSquared said that the agreement increases the amount of contiguous spectrum available to both parties and provides it with enhanced operational flexibility for deployment of its 4G LTE integrated terrestrial and satellite network. Sanjiv Ahuja, chairman and chief executive officer of LightSquared said: ‘Triggering this agreement will now give us the contiguous spectrum we need to support additional network capacity to meet the growing demand for wireless data.’
Inmarsat will immediately begin a process of transition to a modified spectrum plan with the process expected to take 18 months. Inmarsat will incur the cost of certain network modifications, while LightSquared will make a series of payments to Inmarsat totalling USD337.5 million during Phase 1. The wholesale operator has already paid the satellite firm USD81.25 million, and will pay a further USD40 million every three months for the next 15 months and USD56.25 million upon completion of the first phase. Additionally, LightSquared has an option to implement Phase 2 which will add further capacity to its network. Phase 2 may be exercised at any time up until January 2013 and provides that Inmarsat would make additional spectrum available at an annual cost of USD115 million per year. The Phase 2 process is expected to take 30 months once exercised by LightSquared.