LightSquared to pay Inmarsat $338m for spectrum
US wireless broadband startup LightSquared has activated a spectrum deal with Inmarsat in which it will pay $337.5 million to the mobile satellite firm.
LightSquared will use Inmarsat’s L-band frequencies to deploy a hybrid satellite-LTE network across the US, launching in the second half of 2011.
The company, backed by US hedge fund equity Harbinger Capital Partners, said Wednesday
it had triggered a December 2007 agreement with Inmarsat on using the spectrum.
In the first stage of the deal, Inmarsat will rejig its L-band configuration over the next 18 months and release the vacated airwaves to LightSquared.
LightSquared chairman and CEO Sanjiv Ahuja said the agreement would provide the operator with contiguous spectrum for additional network capacity to support wireless data services.
The deal marks another milestone for the ambitious project, which aims to cash in on the mobile data boom by wholesaling capacity to incumbent operators. It has announced a $7 billion deal with Nokia Siemens for a network rollout, but is still seeking funds.
LightSquared has made a first payment of $81.3 million to Inmarsat. It will make five payments of $40 million over the next 15 months and a final $56.3 million payment after 18 months.
LightSquared also has a phase 2 option, under which it would pay $115 million a year for Inmarsat spectrum. It can be exercised any time up to January 2013.
MORE ARTICLES ON HARBINGER, INMARSAT, LIGHTSQUARED, US