- Ligado filed for bankruptcy this week but also inked a deal to give AST SpaceMobile usage rights to some of its L-band spectrum
- Ligado will continue operating throughout its restructuring, providing mobile satellite services to existing customers
- The bankruptcy filing was precipitated by losses Ligado says it suffered due to the U.S. government’s taking over a portion of its spectrum
Ligado Networks’ revelation this week that it filed for Chapter 11 bankruptcy protection came as no surprise as the company has been struggling for years. No doubt, the bankruptcy filing is a huge step in Ligado’s turn-around. But the real head turner is its companion deal with up-and-coming satellite company AST SpaceMobile.
AST SpaceMobile's fanboys immediately seized upon the moment, declaring it a most elegant solution to Ligado’s long-standing spectrum problem and a game changer for the direct-to-device (D2D) player.
Indeed, the agreement with AST SpaceMobile is key to Ligado’s restructuring plan. As part of the deal, AST SpaceMobile will provide Ligado with about $113 million of AST SpaceMobile warrants and Ligado will participate in AST SpaceMobile’s D2D business in the U.S. and Canada. In exchange, AST SpaceMobile is getting 80+ years of spectrum usage rights for up to 40 MHz of L-band Mobile Satellite Service (MSS) spectrum from Ligado.
Of course, the deal also raises all kinds of questions since Ligado has been complaining that it’s unable to use its spectrum due to the U.S. Department of Defense (DoD) blocking it from expanding into new spectrum, even though the move was approved by the FCC. If Ligado can’t use it, how can AST SpaceMobile use it?
The simple answer is Ligado wanted to use the MSS spectrum for terrestrial-based 5G when it was originally “zoned,” for lack of a better term, for satellite usage. The FCC granted that, but the DoD claimed it interfered with its military GPS. AST SpaceMobile will use it for signals in the sky, not the ground, presumably making it palatable to the DoD.
Ligado has been offering satellite-based services since 1995, when it was known as LightSquared, primarily in the critical infrastructure support space, such as utilities, government and transportation. “That has never been questioned by anyone. It’s not the subject of the litigation that we have with the U.S. government. That’s all about the terrestrial use,” Ligado CEO Doug Smith told Fierce.
The way to think about the agreement with AST SpaceMobile “is to really expand our satellite use to provide a service that’s direct to smartphones and other mainstream consumer products,” he said. “It is direct from satellite, so it’s not a terrestrial use, it’s a satellite use. It’s the same spectrum that we’re offering services over today.”
Of Ligado’s more than 40 MHz of L-band MSS spectrum, 30 MHz has FCC approval to use for terrestrial purposes and that’s the subject of the DoD litigation. “They’ve not made any issue of the satellite use,” he noted.
Ligado’s agreement with AST SpaceMobile is not contingent on settling the lawsuit with the U.S. government, he added. Ligado received a favorable ruling at the end of 2024 when a federal judge determined that the company could move forward with its case against the departments of Defense and Commerce. The government has until February 3 to respond to Ligado’s complaint.
So, how soon can AST SpaceMobile use the spectrum if all goes as planned? Well, Ligado is a geostationary (GEO) satellite operator and AST SpaceMobile’s plan is to use the spectrum as a low Earth orbit (LEO) operator. That means they need to get FCC approval in order to modify the spectrum’s use for AST SpaceMobile’s purposes and the spectrum needs to be supported in handsets.
“It’s essentially going to a different orbit,” Smith said. “Always hard to predict exactly how long that FCC process will take, but there will be an FCC process here before we would start to use it on the AST system.”
What about AT&T and Verizon’s spectrum?
AST SpaceMobile previously disclosed plans to use 850 MHz spectrum from AT&T and Verizon, both of which plan to use its satellite constellation to offer D2D service to their customers, similar to what T-Mobile is doing with its Starlink/SpaceX partnership. Plans call for initially offering text services in outdoor settings where the handset can get a clear signal to the satellites orbiting overhead.
Does the addition of Ligado’s spectrum eliminate the need for AST SpaceMobile to use the spectrum from AT&T and Verizon? After all, as of early last year, Verizon wasn’t too keen on using its precious terrestrial spectrum for a satellite service.
An AST SpaceMobile spokesperson wasn’t immediately available to answer that question, but AT&T and Verizon offered statements suggesting their spectrum is still part of the mix.
“While it is still too early to know what a final transaction may look like, any additional spectrum made available for a satellite direct-to-cellular service will help improve coverage and service capabilities for that service,” said an AT&T spokeswoman in a statement provided to Fierce. “We are excited about this potential additional spectrum.”
Verizon provided a similar response. “AST getting access to additional spectrum is good for the satellite-to-device services. We still plan to use 850 A and B [spectrum bands] to deliver the D2D services in the near term and if we gain access to additional spectrum/services via AST or others, we will leverage those too,” a Verizon spokesperson told Fierce.
A big unknown: EchoStar
One big uncertainty is whether the AST SpaceMobile deal with Ligado will motivate Starlink to make a similar move into MSS spectrum, with EchoStar now the most likely player as a credible global partner with a significant spectrum portfolio, according to Tim Farrar, principal at TMF Associates.
Such a deal was rumored in September 2024, but it hasn’t come to fruition despite the FCC granting Starlink permission to operate in the 2000-2020 MHz uplink and 2190-2200 MHz downlink bands as part of its Supplemental Coverage from Space order in November, he said.
The AST/Ligado deal provides a valuation benchmark that is helpful to EchoStar since AST is paying what amounts to nearly $2 billion for access to 40 MHz of MSS and 5 MHz of terrestrial spectrum covering about 350 million points of presence (POPs), according to Farrar.
“Extrapolating to EchoStar’s global holdings might suggest a valuation of $4 billion+, similar to Globalstar’s suggestion that its international Band 53 spectrum rights would match the value of its U.S. spectrum rights," Farrar said.
"However, SpaceX might be unwilling to pay such a large amount and could instead press the FCC to grant it access to the 2 GHz MSS spectrum alongside EchoStar,” he concluded.