LightSquared defaults on $56M payment to spectrum owner Inmarsat

Inmarsat has warned LightSquared it may end a vital spectrum cooperation agreement after the company missed a $56.25 million payment

LightSquared has defaulted on a US$56.25 million payment due under a 2007 wireless spectrum cooperation agreement with Inmarsat, the U.K. satellite communications operator said Monday, adding that it could terminate the agreement if LightSquared doesn't make payment within 60 days.

The future of LightSquared's project to offer LTE (Long Term Evolution) broadband wireless services across the U.S. using a combination of satellite and terrestrial signals was thrown into doubt last week, when the U.S. Federal Communications Commission said it was minded to withdraw its approval for the project. LightSquared is considering a legal challenge to the FCC's decision.

The FCC had initially made its approval conditional on LightSquared working with the GPS industry to reduce concerns over interference with GPS navigation devices, which operate on frequencies adjacent to those LightSquared intends to use. LightSquared's spectrum cooperation agreement with Inmarsat is key to the proposals it made to solve the GPS interference issue: Of the frequencies LightSquared could use for its network, Inmarsat controls the block furthest from that used by GPS receivers, and so the least likely to cause interference problems.

LightSquared has already invested $4 billion in building its network, and will need to invest another $14 billion in private financing to complete its plans, it says.

In early January the company said it had enough financing to wait several more quarters for regulatory approval to begin operating its network, but Monday's default on the payment to Inmarsat suggests LightSquared's finances may be tighter than the company has previously let on.

As of Nov. 2, LightSquared had paid Inmarsat $420.6 million under their spectrum cooperation agreement, of which $268.1 million was paid last year, according to Inmarsat's financial statements. Following LightSquared's failure to pay Monday's $56.25 million installment, Inmarsat said it had given the company notice that it has 60 days to pay, after which Inmarsat can terminate certain of LightSquared's rights to spectrum set out in their cooperation agreement.

Inmarsat warned its investors that although it is negotiating with LightSquared, it cannot be sure that it will receive any further payments from the company.

Peter Sayer covers open source software, European intellectual property legislation and general technology breaking news for IDG News Service. Send comments and news tips to Peter at peter_sayer@idg.com.

Join the newsletter!

Or
Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Peter Sayer

IDG News Service
Show Comments

Essentials

James Cook University - Master of Data Science Online Course

Learn more >

Mobile

Sansai 6-Outlet Power Board + 4-Port USB Charging Station

Learn more >

Victorinox Werks Professional Executive 17 Laptop Case

Learn more >

Exec

Budget

Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?