Press release
Inmarsat receives phase 1 notice from LightSquared
18-08-2010 - Inmarsat plc today announced that it has received notice from LightSquared triggering Phase 1 of a Cooperation Agreement signed between Inmarsat and SkyTerra Communications, Inc. (now LightSquared).
Under the Cooperation Agreement originally signed in December 2007, Inmarsat and LightSquared agreed a plan to enable the re-banding and efficient reuse of L-band radio spectrum covering North America. The agreement was designed to increase the contiguous spectrum available to support the deployment of 4G ancillary terrestrial component ("ATC") services and to protect the continued deployment and growth of MSS activities in North America.
To implement Phase 1, Inmarsat will immediately begin a process of transition to a modified spectrum plan to increase spectrum contiguity. This process is expected to take 18 months and involve the cost of certain network modifications that Inmarsat will incur. During this process, LightSquared will make a series of payments to Inmarsat totalling $337.5m:
- Upon delivery of the notice (the "trigger date"), an initial payment of $81.25m which has already been received by Inmarsat;
- Following the initial payment, five instalment payments of $40.0m each to be paid every three months until the final $40.0m instalment 15 months from the trigger date; and,
- At the Phase 1 completion date (targeted for 18 months following the trigger date), a final payment of $56.25m.
As a result of the Phase 1 notice, LightSquared will have a further Phase 2 option until 1 January 2013. Under the Phase 2 option Inmarsat will additionally support the LightSquared business plan in return for payments totalling $115m per annum. An implementation of Phase 2 by Inmarsat would involve a 30-month transition process.
About Inmarsat
Inmarsat plc (LSE: ISAT) is the leading provider of global mobile satellite communications
services. Since 1979, Inmarsat has been providing reliable voice and high-speed
data communications to governments, enterprises and other organizations, with a range
of services that can be used on land, at sea or in the air. The company's services
are delivered through a global network of more than 400 distribution partners and
service providers operating in 100 countries. For the year ended 31 December
2009, Inmarsat plc had total revenue of US$1,038.1m (2008: US$996.7m) with an EBITDA
of US$594.2m (2008: US$531.2m). For more information, please visit www.inmarsat.com.
About LightSquared
LightSquared's mission is to revolutionize the U.S. wireless industry. Through the
creation of the first-ever wholesale-only nationwide 4G-LTE network complemented by
satellite coverage, LightSquared offers people the speed, value, and reliability of
universal broadband connectivity, wherever they are in the United States. Through
its wholesale-only business model, those without their own wireless network or who
have limited geographic coverage or spectrum can develop and sell their own devices,
applications, and services using LightSquared's open 4G network at a competitive cost
and without retail competition from LightSquared. For further information about
LightSquared, please go to www.LightSquared.com.
