AST SpaceMobile reaches deal to bankroll Ligado’s Viasat settlement

TAMPA, Fla. — AST SpaceMobile has reached a deal enabling bankrupt satellite operator Ligado Networks to pay the more than $500 million it owes Viasat, in exchange for long-term access to L-band spectrum to boost its planned direct-to-smartphone services.

Under the agreement announced June 13, AST SpaceMobile would provide about $550 million to Ligado, of which $535 million would go to Viasat-owned Inmarsat to settle the Mobile Satellite Services (MSS) operator’s opposition to its bankruptcy restructuring plan.

Pending bankruptcy court approval of the agreement, Ligado would be obligated to begin making quarterly payments to Inmarsat of around $16 million from Sept. 30 for the radio waves, which sit adjacent to Ligado’s spectrum to form a contiguous swath of L-band over North America.

These quarterly payments would escalate 3% annually through the end of the agreement in 2107.

Ligado uses these frequencies to provide mobile satellite connectivity from geostationary orbit to government and enterprise customers.

The operator has long aimed to repurpose the spectrum for a terrestrial 5G network, but those plans have stalled amid GPS interference concerns raised by government agencies and parts of the telecoms and satellite industries.

Legal saga

Days after filing for Chapter 11 bankruptcy protection, Ligado sued Inmarsat Jan. 7 for allegedly breaching their 2007 L-band cooperation agreement by not upgrading satellite terminals to avoid interfering with the network.

Ligado’s lawsuit has been stayed following the agreement, and is set to be dismissed entirely, subject to certain conditions following bankruptcy court approval.

Ligado has also launched legal action against the U.S. government over an alleged GPS interference misinformation campaign about its proposed 5G network, which the company claims was blocked in favor of Department of Defense use of the spectrum.

In May, the U.S. Court of Appeals for the Federal Circuit agreed to let the government challenge a ruling that had partly rejected its bid to dismiss Ligado’s lawsuit.

Empowering services

AST SpaceMobile said Inmarsat has agreed to support its efforts to obtain regulatory approval for using L-band spectrum from non-geostationary orbit (NGSO) satellites as part of their deal.

Combined with cellular spectrum from partners AT&T and Verizon, AST SpaceMobile said the frequencies would support broadband speeds of up to 120 megabits per second for unmodified smartphones beyond the reach of terrestrial networks across the U.S.

The Texas-based startup, which has secured commitments for a $550 million loan to support the deal, currently operates five commercial BlueBird satellites in low Earth orbit.

Starting next month, it plans to deploy satellites every one to two months on average, enabling beta services before the end of the year, subject to regulatory approvals. Broader space-enabled commercial services, including video conferencing, are slated for early 2026.

Evolving MSS ecosystem

Ligado and Viasat announced a direct-to-device partnership in 2023. A year later, they joined other L-band operators to form the Mobile Satellite Services Association (MSSA), aimed at promoting MSS-based direct-to-device services as an alternative to solutions using traditional cellular spectrum.

Mark Dankberg, Viasat chair and CEO, said settling Inmarsat’s long-running dispute with Ligado not only improves Viasat’s balance sheet by helping pay down some of its $5.6 billion in net debt, but also reinforces its positioning in the evolving MSS ecosystem.

“We saw the opportunity of a favorable outcome when completing the Inmarsat acquisition” in 2023, he said, “and not only anticipated the potential of utilizing the cash proceeds from such an agreement to repay debt, which will soon further strengthen our capital position, but to also advance our growth strategy. 

“To that end, we look forward to continuing our activities with the MSSA to ensure an open architecture, standards based multi-orbit approach to MSS based on continued cooperation mechanisms among MSS operators.”

Ligado’s broader restructuring plan calls for converting $7.8 billion in debt to equity, reducing its future debt to $1.2 billion.

A Ligado spokesperson said the company plans to seek bankruptcy court approval for the AST SpaceMobile agreement later this month, targeting confirmation of the restructuring plan in early August.