TAMPA, Fla. — Satellite operator AST SpaceMobile hopes to turbocharge its proposed direct-to-smartphone services with L-band spectrum from Ligado Networks, which filed for bankruptcy after GPS interference concerns derailed its terrestrial 5G plans.
The companies announced Jan. 6 that they are working toward a long-term deal granting 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 exchange, Ligado would receive warrants convertible into AST SpaceMobile shares in 12 months — currently valued at about $120 million — and $80 million in annual cash payments under a lease agreement extending at least 80 years.
If the Federal Communications Commission (FCC) approves AST SpaceMobile’s use of the spectrum, along with other regulatory greenlights, the Texas-based company would pay Ligado approximately $550 million upon closing the transaction.
AST SpaceMobile chair and CEO Abel Avellan said the MSS frequencies, combined with 850 MHz of cellular spectrum from its telecom partners AT&T and Verizon, would enable broadband speeds of up to 120 megabits per second for devices beyond the reach of cell towers across the United States.
The satellite operator has secured terms for a $550 million loan to support the deal. Ligado also said it would receive “economic participation” in AST SpaceMobile’s direct-to-smartphone business in the U.S. and Canada, but did not provide specific details.
Hurdles to clear
AST SpaceMobile expects to finalize the agreement in the first half of this year.
The operator deployed five in-house-built Block 1 BlueBird satellites in low Earth orbit in September, each equipped with the largest commercial phased-array antenna deployed in LEO to connect directly with standard mobile devices.
Under a multi-launch campaign kicking off this year, primarily leveraging Blue Origin’s nascent New Glenn rocket, AST SpaceMobile plans to deploy Block 2 BlueBirds that are 3.5 times larger to enhance performance. According to the company, Block 2 satellites will have up to 10 times the bandwidth capacity of Block 1 models, supporting 120 Mbps broadband speeds for voice, video streaming, and other 5G services.
India is expected to launch the first Block 2 BlueBird in February or March, according to a local report citing Jitendra Singh, the country’s science minister.
However, AST SpaceMobile still requires FCC approval to use cellular spectrum from its initial BlueBirds to offer beta services in the U.S., the company’s initial target market.
The FCC granted Ligado permission in 2020 to deploy a ground-based 5G network using assigned L-band spectrum, but those plans stalled two years later due to mounting GPS interference concerns.
In 2023, Ligado sued the U.S. government and several federal agencies, alleging they obstructed its network efforts in favor of Department of Defense use of the frequencies.
The government called on the U.S. Court of Federal Claims to dismiss the lawsuit, citing several arguments, including that the court lacked jurisdiction because the Communications Act requires an exclusive administrative and judicial review framework for claims arising from FCC licensing decisions.
However, a federal judge recently allowed the lawsuit to proceed.
In a Jan. 6 statement announcing its Chapter 11 restructuring plan and deal with AST SpaceMobile, Ligado CEO Doug Smith said the company intends “to vigorously prosecute its litigation against the U.S. government” to seek approximately $40 billion in damages.
Ligado’s broader restructuring plan proposes converting $7.8 billion of debt into equity, leaving the company with $1.2 billion in debt. About 88% of Ligado’s lenders have agreed to the plan, according to the company, which said it would continue providing MSS services during its restructuring.
While Ligado’s terrestrial mobile plans have stalled, the company provides connectivity services to government and enterprise customers across North America from its SkyTerra-1 and MSAT-2 geostationary satellites, via specialized ground terminals.
In partnership with geostationary broadband operator Viasat and technology provider Skylo, Ligado also supports satellite-enabled SOS connectivity on Android smartphones equipped with the latest standards-based chipsets, including Google’s Pixel 9 series.
Ligado faces substantial payment obligations to Viasat-owned Inmarsat under an L-band spectrum leasing agreement, and Ligado said its Chapter 11 plan follows a year-long effort to restructure these payments. Viasat declined to comment.
Incoming transformation
The nascent direct-to-smartphone market is roughly split into two camps: legacy operators seeking to use MSS spectrum to connect upgraded smartphone models, and companies like AST SpaceMobile and Starlink developing constellations that leverage cellular frequencies to connect unmodified devices.
While access to its own spectrum resources would position AST SpaceMobile among MSS players like Viasat and Globalstar, B. Riley analyst Mike Crawford said the company is likely to maintain its focus on revenue-sharing partnerships with telecom operators.
By drawing from both direct-to-smartphone strategies, AST SpaceMobile would be “fortified with access to valuable spectrum assets to deliver a base level of capacity, which can be supplemented by more subscribers and better service,” Crawford said.
Ligado voluntarily filed for Chapter 11 restructuring in Delaware Jan. 5. The Virginia-based company, formerly known as LightSquared, previously filed for bankruptcy in 2012 after GPS interference issues first emerged.
Related
Read the original article here