US wholesale-only integrated wireless broadband and satellite network provider LightSquared has delivered notice to mobile satellite communications services provider Inmarsat triggering Phase 1 of a cooperation agreement originally signed in December 2007. The agreement increases the amount of contiguous spectrum available to both parties and provides LightSquared enhanced operational flexibility for deployment of its LTE integrated terrestrial and satellite network. 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 eighteen 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 USD 337.5 million. Upon exercise, LightSquared made an initial payment of USD 81.25 million. Following the initial payment LightSquared will pay USD 40 million every three months until the final USD 40 million installment is paid fifteen months from the trigger date. At the Phase 1 completion date, targeted for eighteen months following the trigger date, the company will pay another USD 56.25 million. 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 1 January 2013 and provides that Inmarsat would make additional spectrum available at an annual cost of USD 115 million per year. The Phase 2 process is expected to take 30 months following the exercise by LightSquared of the Phase 2 option.
