LightSquared wins two-year reprieve for spectrum payments to Inmarsat

LightSquared will use the extra time to focus on obtaining U.S. regulatory approval for its planned LTE network, it said

LightSquared has a further two years in which to seek regulatory approval for its LTE mobile network in the U.S. before it must begin making payments to its radio spectrum supplier Inmarsat, the companies announced Friday.

The first quarterly spectrum rental payment of US$29.6 million fell due on March 31, but now LightSquared has negotiated a reprieve until March 31, 2014, at the latest. It also has the option to resume payments -- and begin using the spectrum -- on any date before then, the companies said.

LightSquared will use the extra time to focus on obtaining regulatory approval for its project to offer LTE broadband wireless services across the U.S., it said Friday.

Inmarsat had previously threatened LightSquared with termination of the cooperation agreement, saying that it was in default of a payment due under the first phase of their agreement. LightSquared, though, said Inmarsat hadn't fulfilled all its obligations under the agreement.

"We complied with everything they asked us to do," said Inmarsat spokesman Chris McLaughlin, and now LightSquared has made the outstanding $56.25 million phase-one payment to Inmarsat.

That payment was to cover Inmarsat's reorganization of the way it used radio spectrum in North America, and also any modifications to its customers' terminal equipment to take account of the spectrum changes.

"We had alternating stripes of L-band spectrum," said McLaughlin. Reorganizing the spectrum allocations allowed LightSquared to obtain the contiguous block it needed to offer its service.

The dispute with Inmarsat wasn't the only thing casting a shadow on LightSquared's future, though.

LightSquared plans to use a combination of satellite and terrestrial signals, which the GPS industry is concerned will cause interference with navigation devices operating on frequencies adjacent to those LightSquared intends to use. In mid-February, the U.S. Federal Communications Commission said it was minded to withdraw its conditional approval for the project, and invited comments on its proposal. The Commission extended the period for comments, finally closing it in late March.

The FCC will now analyze those comments before announcing its decision.

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