AST SpaceMobile has brokered a significant deal, resolving the substantial debt owed by bankrupt satellite operator Ligado Networks to Viasat. The agreement, announced June 13, involves AST SpaceMobile providing approximately $550 million to Ligado. Of this sum, $535 million will be directed towards Inmarsat (owned by Viasat) to settle a dispute stemming from Ligado's bankruptcy restructuring plan.
Pending court approval, Ligado will commence quarterly payments to Inmarsat, starting September 30, for access to L-band spectrum. These payments, approximately $16 million per quarter, will increase by 3% annually until 2107. This spectrum, adjacent to Ligado's existing frequencies, creates a contiguous L-band coverage area over North America. Ligado previously utilized this spectrum for geostationary satellite connectivity to government and enterprise clients, although plans for a terrestrial 5G network were hampered by GPS interference concerns.
Following its Chapter 11 bankruptcy filing, Ligado sued Inmarsat in January 2024, alleging breach of contract. This lawsuit has been temporarily suspended and is slated for dismissal, subject to court approval and certain conditions. Additionally, Ligado has initiated legal proceedings against the U.S. government, claiming a misinformation campaign regarding GPS interference impacted its 5G network plans. The U.S. Court of Appeals for the Federal Circuit recently allowed the government to challenge a previous ruling.
As part of the agreement, Inmarsat will support AST SpaceMobile's pursuit of regulatory approval for utilizing L-band spectrum from non-geostationary orbit (NGSO) satellites. AST SpaceMobile anticipates broadband speeds of up to 120 megabits per second for unmodified smartphones, leveraging this spectrum alongside cellular spectrum from AT&T and Verizon. The company currently operates five BlueBird satellites and plans to launch additional satellites monthly, aiming for beta service launch before the end of the year, subject to regulatory approvals.
Mark Dankberg, Viasat's chair and CEO, stated that resolving the Inmarsat-Ligado dispute improves Viasat's financial position and strengthens its role in the evolving MSS ecosystem. He emphasized the importance of continued cooperation among MSS operators to ensure an open architecture approach. Ligado's restructuring plan involves debt conversion to equity, significantly reducing its debt load. The company aims to secure court approval for the AST SpaceMobile agreement this month, with restructuring plan confirmation expected in early August.