LightSquared today announced it has triggered Phase 1 of a Cooperation Agreement between Inmarsat and LightSquared.
Inmarsat and SkyTerra (now LightSquared), designed a phased plan aimed at addressing growing wireless broadband demand. The agreement increases the amount of contiguous spectrum available to both parties and provides LightSquared enhanced operational flexibility for deployment of its 4G-LTE integrated terrestrial and satellite network.
To implement Phase 1, Inmarsat will immediately begin a process of transition to a modified spectrum plan to increase spectrum contiguity. This process is expected to take 18 months and will require Inmarsat to incur the cost of certain network modifications. During implementation of Phase 1, LightSquared will make a series of payments to Inmarsat totalling $337.5 million (USD):
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 through January 1, 2013 and provides that Inmarsat would make additional spectrum available at an annual cost of $115 million (USD) per year. The Phase 2 process is expected to take 30 months following the exercise by LightSquared of the Phase 2 option.
LightSquared is majority owned by Harbinger Capital. Its wholesale LTE network will allow for terrestrial-only, satellite-only or integrated satellite-terrestrial services using the MSS spectrum Harbinger scored through a merger in March with satellite operator SkyTerra.
Harbinger Capital Partners has dropped Clearwire from its stock portfolio and cut its stock holdings in Sprint Nextel, according to a regulatory filing.
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