[SatNews] LightSquared has delivered notice to Inmarsat triggering Phase 1 of a Cooperation Agreement between the company and Inmarsat.

Under the Cooperation Agreement originally signed in December 2007, Inmarsat and SkyTerra (now LightSquared), designed a phased plan aimed at addressing growing wireless broadband demand. The agreement increases the amount of contiguous spectrum available to both parties and provides LightSquared enhanced operational flexibility for deployment of its 4G-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 18 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 $337.5 million (USD):

• Upon exercise, LightSquared made an initial payment of $81.25 million (USD) ($31.25 million (USD) plus first installment of $50 million (USD))
Following the initial payment of $81.25 million (USD),
• LightSquared will pay $40 million (USD) every three months until the final $40 million (USD) installment is paid 15 months from the trigger date
• At the Phase 1 completion date (targeted for 18 months following the trigger date), LightSquared will pay another $56.25 million (USD)

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 January 1, 2013 and provides that Inmarsat would make additional spectrum available at an annual cost of $115 million (USD) per year. The Phase 2 process is expected to take 30 months following the exercise by LightSquared of the Phase 2 option.