Why AST SpaceMobile stomped into Ligado's spectrum messWhy AST SpaceMobile stomped into Ligado's spectrum mess

AST SpaceMobile said it will be able to offer 120 Mbit/s peak speeds over its satellite network if it gets access to 45MHz of spectrum from now-bankrupt Ligado Networks. But there are plenty of complications surrounding the deal.

For its part, Ligado has been trying to put that spectrum into ground-based networks for 15 years – since 2010 – without much to show for it.

The difference this time is that AST SpaceMobile is looking to use Ligado's spectrum for space-based communications. Ligado has regulatory approvals for those types of communications, and has been operating a space-based communication network for years. However, Ligado hasn't been able to use the spectrum for terrestrial communications due to ongoing interference concerns.

Regardless, AST SpaceMobile's deal with Ligado is part of Ligado's second bankruptcy filing. And this time around, Ligado doesn't have the support of Viasat, which now appears to also be pursuing Ligado's L-band spectrum holdings for itself.

Indeed, Ligado's spectrum mess is so complete and absolute, it's planning to continue to pursue its lawsuit against the US Department of Defense (DoD). In a filing late last year, Ligado claimed the US military is secretly using its L-band spectrum holdings, alleging the Pentagon conducted a "misinformation and disparagement campaign" to prevent Ligado from launching its own terrestrial 5G operations in that band.

This is the spectrum that AST SpaceMobile wants, albeit for space-based communications and not terrestrial communications. That could make things easier for AST SpaceMobile.

"Adding premium lower midband spectrum access in the United States to the AST SpaceMobile network [using Ligado's spectrum] gives us long-term access to a large block of a scarce resource, significantly enhancing our planned space-based cellular broadband offering," said Abel Avellan, chairman and CEO at AST SpaceMobile.

AST SpaceMobile, for its part, is working to build a satellite constellation that can connect directly to existing customers' smartphones. However, that constellation will use spectrum owned by mobile network operators like AT&T and Verizon. Ligado's spectrum could add a new dimension to AST SpaceMobile's efforts.

The direct-to-device (D2D) business AST SpaceMobile is pursuing is a tough one. Although companies like Globalstar and SpaceX have found some success, others – like Lynk Global – are struggling. Lynk recently signaled that it will need more time to complete its merger with a company backed by former Yankees infielder Alex Rodriguez.

The latest

Ligado on Monday said it filed for bankruptcy in Delaware with the support of 88% of its creditors. The company said its bankruptcy plan will cut its debt from $8.6 billion today to $1.2 billion, if the plan is approved.

Ligado's bookmark is no stranger to Chapter 11. The company initially launched in 2010 under the name LightSquared, and planned to build a terrestrial 4G LTE network with its L-band spectrum holdings. That plan fell apart after the FCC ruled that the proposed network would interfere with GPS signals. LightSquared filed for bankruptcy in 2012.

Ligado arose from LightSquared's bankruptcy in 2015. It then managed to score approvals from the FCC for its plan, this time focusing on terrestrial 5G.

But that effort too fell apart starting in 2020. Ligado, for its part, alleges the DoD is to blame.

"The DoD's actions constitute the largest uncompensated taking of private property in the US in modern times and have caused Ligado catastrophic financial distress," said Doug Smith, Ligado's CEO, in the company's new release.

Ligado said it will continue to pursue its claims against the DoD through its Chapter 11 proceedings. The likelihood of that lawsuit coming to an end anytime soon is remote at best.

The Viasat angle

Ligado's story is also tightly intertwined with that of Inmarsat. That's because the two companies first inked a deal in 2007 that called for Inmarsat to provide some of its L-Band spectrum to Ligado (then LightSquared).

But the companies' relationship has been fraught, to say the least – they've amended their cooperation agreement an astounding 23 times since 2007.

But it appears Viasat had enough of Ligado after it acquired Inmarsat in 2023.

According to the 331-page bankruptcy declaration of Ligado's CEO, Smith, Ligado engaged in "extensive" discussions with Viasat during 2024. But Viasat "raised a purported tax issue" that managed to scuttle any deal.

The reason? According to Smith, Viasat also wants Ligado's spectrum.

"Viasat ... revealed that its true intent is to access the Debtors' spectrum in order to implement Viasat's commercial goals. In other words, without the Debtors' spectrum, Viasat cannot execute on its business plan," according to Smith's declaration.

Viasat, for its part, has been clear about its interest in pursuing a 5G opportunity since its purchase of Inmarsat.

Nothing to lose

So why would AST SpaceMobile choose to wade into Ligado's spectrum muck? After all, the disaster that is Ligado's spectrum holdings is so complete that big 5G operators like Verizon and AT&T have steered wide of any agreement with Ligado despite recently plunking down $1 billion each on UScellular's unimpaired spectrum holdings.

It's probably because AST SpaceMobile has little to lose and much to gain from Ligado's troubles. Under the companies' agreement, AST SpaceMobile is only offering stock for "definitive documentation" of the deal. If the companies' transaction actually closes, AST SpaceMobile would pay Ligado just $550 million (Inmarsat received a total of $1.7 billion during its partnership with Ligado), plus $80 million annually.

In contrast, T-Mobile's 13.5MHz chunk of spectrum in the nearby 800MHz band is valued around $3.6 billion.

Finally, AST SpaceMobile's deal with Ligado is subject to "receipt of satisfactory regulatory approvals required for the proposed use of the spectrum." And if Ligado's lawsuit against the DoD "adversely impacts" AST SpaceMobile, AST SpaceMobile is in line for a break-up fee potentially worth millions of dollars.

Still, Ligado's mess is 15 years in the making. And any resolution might need a similar amount of time.

This article was updated January 6 to clarify that Ligado has been using its L-band spectrum for space-based communications. It has faced challenges using the spectrum for terrestrial communications.