RESTON, Va., August 18, 2010 – LightSquared, the nation’s first wholesale-only integrated wireless broadband and satellite network, today announced it has delivered notice to Inmarsat triggering Phase 1 of a Cooperation Agreement between Inmarsat and LightSquared.
Under the Cooperation Agreement originally signed in December 2007, Inmarsat and SkyTerra (now LightSquared), designed a phased plan aimed at addressing growing wireless broadband demand. The agreement increases the amount of contiguous spectrum available to both parties and provides LightSquared enhanced operational flexibility for deployment of its 4G-LTE integrated terrestrial and satellite network.
“Implementation of this agreement represents a significant milestone in LightSquared’s plan to build the nation’s first wholesale only 4G-LTE wireless broadband network,” said Sanjiv Ahuja, chairman and chief executive officer of LightSquared. “Triggering this agreement will now give us the contiguous spectrum we need to support additional network capacity to meet the growing demand for wireless data.”
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 will require Inmarsat to incur the cost of certain network modifications.
During implementation of Phase 1, LightSquared will make a series of payments to Inmarsat totalling $337.5 million (USD):
• Upon exercise, LightSquared made an initial payment of $81.25 million (USD) ($31.25 million (USD) plus first installment of $50 million (USD)).
• Following the initial payment of $81.25 million (USD), LightSquared will pay $40 million (USD) every three months until the final $40 million (USD) installment is paid 15 months from the trigger date.
• At the Phase 1 completion date (targeted for 18 months following the trigger date), LightSquared will pay another $56.25 million (USD).
Additionally, LightSquared has an option to implement Phase 2 which will add further capacity to its network. Phase 2 may be exercised at any time through January 1, 2013 and provides that Inmarsat would make additional spectrum available at an annual cost of $115 million (USD) per year. The Phase 2 process is expected to take 30 months following the exercise by LightSquared of the Phase 2 option.
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.
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.
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Forward Looking Statement:
This release contains forward-looking statements and information regarding LightSquared and its business. Such statements are based on the current expectations and certain assumptions of LightSquared’s management and are, therefore, subject to certain risks and uncertainties. The forward-looking statements expressed herein relate only to information as of the date of this release. LightSquared has no obligation to update these forward-looking statements to reflect events or circumstances after the date of this release, nor is there any assurance that the plans or strategies discussed in this release will not change.
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