British satellite operator Inmarsat and US satellite/terrestrial venture LightSquared have agreed to delay part of their spectrum leasing deal to 2014. LightSquared has also made a payment of US$56.25m to Inmarsat.
Inmarsat said that, as a result of…
British satellite operator Inmarsat and US satellite/terrestrial venture LightSquared have agreed to delay part of their spectrum leasing deal to 2014. LightSquared has also made a payment of US$56.25m to Inmarsat.
Inmarsat said that, as a result of the deal, LightSquared would no longer be in default of any payments.
The US$56.25m marked the completion of phase 1 of an agreement between the companies, which involved the coordination of Inmarsat’s spectrum in order to give LightSquared a band uninterrupted by Inmarsat’s own services.
The companies have pushed back the second phase of the agreement to March 2014, although LightSquared could decide to restart phase 2 prior to this date. This second phase would involve LightSquared paying Inmarsat to continue to make its spectrum available.
LightSquared will not have to make any further phase 2 payments until April 2014, unless it decides to restart the phase earlier.
Under the agreement, Inmarsat has leased 10MHz of L-Band spectrum to LightSquared. Inmarsat is currently using the spectrum.
LightSquared has been unable to roll out its network, after US regulators rejected its plans in February due to concerns that LightSquared technology would interfere with GPS.
Inmarsat also announced in February that LightSquared had missed a US$56.25m payment due for the end of phase 1. LightSquared said that pending questions had to be resolved before the phase was completed and the payment due.
Inmarsat subsequently announced that LightSquared had failed to make another payment of US$29.6m.
The British satellite operator said today that these notices of default would no longer have effect.
“The amended terms of the Cooperation Agreement will allow LightSquared additional time to secure regulatory consents that may ultimately lead to the deployment of its ATC Network in North America,” Inmarsat said.
An Inmarsat spokesman said that LightSquared has now paid a total of approximately US$500m to Inmarsat, including the US$56.25m payment.
The spokesman added that Inmarsat had not received any expressions of interest for the spectrum it is leasing to LightSquared.
