Inmarsat’s Chief Doubts Severity of LightSquared-GPS Interference Issue

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PARIS — The chief executive of mobile satellite services operator Inmarsat questioned the motivations of GPS backers now rising up against a satellite-terrestrial mobile broadband project, saying claims of interference with GPS signals were addressed years ago and settled by mutual agreement.

Andrew Sukawaty, while insisting that London-based Inmarsat is not directly involved in the increasingly heated dispute between LightSquared and government and industry GPS proponents, said LightSquared’s broadcast frequencies have long been known. While Inmarsat does not want to prejudge the outcome of a three-month study to settle the interference question, he said, he is confident that claims that LightSquared will disable GPS in the United States will prove to be exaggerated.

In a March 7 conference call with investors and a subsequent interview, Sukawaty said Inmarsat, which has dealt with signal interference issues throughout its history and has a special knowledge of LightSquared, believes that the filters LightSquared is putting on its broadcast towers are sufficient to avoid disruption of GPS.

Just as importantly, he said Wall Street investors and others now weighing whether to abandon L-band in favor of a competing satellite-terrestrial mobile broadband service using S-band frequencies need to take a closer look at the characteristics of S-band.

Reston, Va.-based LightSquared up to now has not announced any strategic partners willing to help finance its multibillion-dollar system. With the GPS interference issue now making headlines, some potential investors see an alternative in S-band. Two companies now in Chapter 11 bankruptcy, DBSD and TerreStar, are trying to deploy a LightSquared-type system in S-band.

The value of their S-band spectrum licenses would rise substantially if LightSquared’s plans were crippled by the GPS interference issue.

Sukawaty conceded that some observers might view Inmarsat as too close to LightSquared to be an objective observer.

LightSquared, owned by the New York hedge fund Harbinger Capital Partners, is planning a multibillion-dollar investment to install some 40,000 base stations throughout the United States to provide wireless broadband links. The service will use the same L-band spectrum that LightSquared is using for its satellite system. One of its satellites is in orbit; the second is scheduled for launch later this year.

To clear away sufficient contiguous L-band spectrum over North America to operate its service, LightSquared agreed to pay Inmarsat substantial sums of money to rearrange Inmarsat’s use of L-band. In addition to a one-time payment of $337.5 million, LightSquared has committed to pay Inmarsat $115 million per year for at least seven years, with the sum rising by 3 percent per year.

Inmarsat said March 7 it has already received $212.6 million in cash from LightSquared under the agreements.

Inmarsat has submitted written statements to the U.S. Federal Communications Commission (FCC) on behalf of LightSquared. LightSquared and multiple government and industry organizations representing GPS positioning, navigation and timing interests have created a Technical Working Group to determine the extent, if any, of interference LightSquared would cause GPS. The group is scheduled to submit its conclusions to the FCC June 15.

As part of its agreement with LightSquared, Inmarsat will be installing filters on some of its own users’ equipment to avoid LightSquared interference. Inmarsat Chief Financial Officer Rick Medlock said during the conference call that Inmarsat’s total investment in interference mitigation and other LightSquared-related costs will be “no more than $250 million.”

“The GPS issue is LightSquared’s issue, it’s not our issue,” Sukawaty said. But he added: “The GPS community has now raised its head, saying they object. But you have to scratch your head on that one. GPS has known about this for many years. They’ve had some fairly minor responses to what has come in [from LightSquared and its predecessor company, SkyTerra]. Then, all of a sudden, they come rushing in at the end. They have made some, I’ll say, peculiar forecasts of what dire consequences might fall upon them.

“We’ve seen this before in the U.S. when [spectrum] users are going to get moved. Part of it is negotiation, to get the issues dealt with in a way they find commercially attractive. While we have not been in the middle of discussions, we’ve certainly contemplated what was going to happen with GPS. I think LightSquared has mitigating products and adjustments they can make in their system that really make the issue for GPS a very small one. I don’t think it will have a major impact.”

 

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