LightSquared Misses Payment To Inmarsat
PARIS — Mobile satellite services operatorsaid Feb. 20 that U.S. startup mobile broadband provider failed to make a scheduled $56.25 million payment under the two companies’ spectrum-sharing agreement.
In a submission to the London Stock Exchange, London-based Inmarsat said LightSquared has 60 days to pay what is owed, after which Inmarsat will be “entitled to enforce its rights and remedies under the agreement for payment default, including pre-agreed spectrum arrangements and termination of certain LightSquared rights.”
Reston, Va.-based LightSquared, which was informed Feb. 4 by the U.S. Federal Communications Commission (FCC) that its provisional operating license to build out its L-band network in the United States had been revoked, has entered discussions with Inmarsat about “the future of the cooperation agreement,” Inmarsat said. “Inmarsat cannot provide any assurance that these discussions will result in any further payments being received from LightSquared.”
The 2007 agreement between the two companies is intended to provide LightSquared with an uninterrupted swath of L-band radio spectrum in the United States. Inmarsat agreed to surrender some of its spectrum rights in the United States to permit LightSquared to function in return for cash payments.
The FCC’s license denial came after tests showed that LightSquared’s terrestrial towers would interfere with GPS positioning, navigation and timing signals. LightSquared has challenged the tests’ accuracy.
In the five years since the agreement, Inmarsat officials have said they were confident that, whatever fate befell LightSquared, the L-band spectrum LightSquared had accumulated with Inmarsat’s help is an asset whose value eventually will be monetized given the exploding demand for mobile bandwidth in the United States. Under that reasoning, whatever financial or strategic investor that ended up with LightSquared’s assets would have an interest in maintaining payments to Inmarsat.
LightSquared issued a statement Feb. 20 that acknowledged Inmarsat’s claim that the London operator had completed its obligations under the first phase of the 2007 agreement. The statement made no mention of LightSquared’s payment default, but says LightSquared “has raised several matters that require resolution before the first phase comes to a close. The terms of the agreement allow for additional time to resolve pending questions before phase one is complete and final payment is due.”