Lightsquared saves its SkyTerra 1 satellite while creditor Inmarsat remains upbeat

Source: Flightglobal.com
This story is sourced from Flightglobal.com

The LightSquared operated SkyTerra 1 communications satellite that had been knocked out by a solar flare on 7 March has now been recovered.

The solar storm, which also temporarily blinded Venus Express, affected attitude sensors on SkyTerra, which fell into a safe mode. LightSquared has now confirmed that the satellite is back in operation after an extensive reboot and will shortly be providing services again. The SkyTerra 1 satellite was launched in November 2010 and was planned to have a life of 15 years.

The recovery of SkyTerra 1 was a welcome piece of good news for LightSquared. A series of setbacks for the company began when the US Federal Communications Commission decided to withdraw a licence from LightSquared that would have allowed it to operate terrestrial repeater transmitters for 4G mobile services. This decision was made after tests found that the LightSquared signals would have interfered with GPS navigation signal reception.

After that decision, LightSquared defaulted on a $56 million payment to Inmarsat for use of its frequency spectrum. LightSquared then decided to lay off half of its 330 staff. This was followed by news that Sanjay Ahuja was stepping away from CEO role at the firm.

The company then had to suffer the news that US mobile firm Sprint Nextel had decided to withdraw from a cooperative agreement. For the time being, the principal shareholder in LightSquared, the hedge fund Harbinger Capital, is supporting the company. 

Meanwhile, one-time Harbinger stablemate Inmarsat, which is still owed money by LightSquared, reported its annual financial accounts for 2011. Inmarsat was able to report increasing revenues and profits. According to preliminary results, total revenue was $1.41 billion, which was up 21% on the previous year (2010: $1.17 billion). Profit before tax was $367 million, which was up 10% on the previous year (2010: $334 million).

Concerns over LightSquared remain, given that it was the primary driver of Inmarsat’s recent revenue growth. Inmarsat’s maritime communications operation was reported as having performed worse than expected as sailors used cheaper internet voice systems and e-mail to contact home. Nevertheless, Inmarsat remains upbeat about the prospects for its FleetBroadband service, which it is currently rolling out.