LightSquare, Inmarsat start first phase of broadband collaboration

By Tess Stynes, Dow Jones Newswires

Deal gives firms more contiguous spectrum in U.S.

Wholesale broadband company LightSquared has triggered the first phase of a late 2007 cooperation agreement with mobile satellite communications services provider Inmarsat PLC, which will receive a series of payments totaling $337.5 million, in a plan to meet growing demand for wireless broadband.

LightSquared is controlled by private-equity firm Harbinger Capital Partners, which is moving to build a nationwide broadband wireless network in the U.S. It awarded Nokia Siemens Networks a $7 billion contract last month to supply equipment. Harbinger’s plan involves installing 40,000 wireless base stations and launching two satellites, with a goal of covering 92% of the U.S. population within four and a half years.

The pact between LightSquared and Inmarsat aims to increase the contiguous broadband spectrum available to both companies and give LightSquared increased flexibility to roll out its fourth-generation network, which will allow those without their own wireless network or limited geographic coverage to develop and sell their own devices, applications and services.

Under the plan, Inmarsat will begin an 18-month transition to a modified spectrum plan during which Inmarsat will make a series of payments including a $81.3 million initial one.

LightSquared, formerly SkyTerra, has the option to implement Phase 2 through the start of 2013, under which Inmarsat would make additional spectrum available at a cost of $115 million a year. The program is expected to take 2 1/2 years.

Inmarsat shares traded in New York closed Tuesday at $10.70 and were inactive premarket.

Related articles by Zemanta

• Nokia Siemens Networks Wins $7B Contract to Build Harbinger’s LTE Network (gigaom.com)
• LightSquared Links 4G With Airspan Smart Grid (informationweek.com)
• New wireless broadband network to launch next year (seattletimes.nwsource.com)
• INSIGHT-TerreStar’s failings bedevil Harbinger’s Falcone (reuters.com)