Satellite operator AST SpaceMobile is collaborating with Ligado Networks to enhance its direct-to-smartphone services. Ligado Networks, following bankruptcy proceedings due to GPS interference concerns, will provide AST SpaceMobile with access to L-band spectrum.

The agreement, announced January 6th, grants AST SpaceMobile access to up to 40 MHz of L-band Mobile Satellite Services (MSS) spectrum in the United States and Canada, plus 5 MHz of adjacent spectrum in the U.S. In return, Ligado receives warrants convertible into AST SpaceMobile shares and annual cash payments, totaling approximately $550 million upon FCC approval.

AST SpaceMobile CEO Abel Avellan stated that this spectrum, combined with existing cellular spectrum from AT&T and Verizon, will enable broadband speeds up to 120 Mbps. A $550 million loan supports this deal. Ligado will also receive “economic participation” in AST SpaceMobile’s U.S. and Canadian operations.

AST SpaceMobile plans to finalize the agreement in the first half of 2024. The company’s Block 1 BlueBird satellites are already in orbit, and larger Block 2 satellites are planned for launch, significantly increasing bandwidth capacity. The first Block 2 launch is anticipated in February or March, according to Indian Science Minister Jitendra Singh.

However, FCC approval is still needed for AST SpaceMobile to offer beta services in the U.S. Ligado’s previous 5G plans were stalled due to GPS interference concerns, leading to a lawsuit against the U.S. government. Ligado CEO Doug Smith stated the intention to "vigorously prosecute its litigation" seeking substantial damages. Ligado's restructuring plan involves debt conversion and leaves the company with $1.2 billion in debt. Despite the setbacks, Ligado continues providing MSS services.

The direct-to-smartphone market involves legacy operators using MSS spectrum and companies like AST SpaceMobile and Starlink using cellular frequencies. Analyst Mike Crawford believes AST SpaceMobile will maintain its revenue-sharing partnerships with telecom operators while leveraging its own spectrum resources.

Ligado voluntarily filed for Chapter 11 restructuring on January 5th, marking a second bankruptcy filing for the company.