Satellite operator AST SpaceMobile has entered into a partnership with Ligado Networks, which filed for bankruptcy in 2023 due to GPS interference issues related to its terrestrial 5G plans. The deal, announced on January 6, grants AST SpaceMobile access to up to 40 MHz of L-band Mobile Satellite Services (MSS) spectrum in the United States and Canada, plus an additional 5 MHz of spectrum in the U.S.
In return, Ligado will receive warrants convertible into AST SpaceMobile shares valued at approximately $120 million, alongside $80 million in annual cash payments under a lease agreement spanning at least 80 years. The agreement is contingent upon approval from the Federal Communications Commission (FCC), as well as other regulatory agencies. Once the transaction closes, AST SpaceMobile expects to pay Ligado about $550 million.
AST SpaceMobile Chair and CEO Abel Avellan emphasized the strategic importance of the deal, noting, “The MSS frequencies, combined with 850 MHz of cellular spectrum from our telecom partners AT&T and Verizon, would enable broadband speeds of up to 120 megabits per second for devices beyond the reach of cell towers across the United States.
The deal marks a significant step for AST SpaceMobile, which has secured a $550 million loan to support the agreement. The company plans to deploy its Block 2 BlueBird satellites, which will be 3.5 times larger than the initial Block 1 models, offering up to 10 times the bandwidth capacity and supporting high-speed broadband services. The first of these Block 2 satellites is expected to launch in India in February or March 2025.
The partnership also comes as Ligado works to resolve its bankruptcy proceedings. Ligado CEO Doug Smith, in a statement about the Chapter 11 restructuring plan, said the company intends to “vigorously prosecute its litigation against the U.S. government” seeking around $40 billion in damages. Despite its financial challenges, Ligado continues to offer satellite connectivity services for government and enterprise customers.
AST SpaceMobile's strategy aligns with broader trends in the satellite industry, where companies like AST SpaceMobile and Starlink aim to connect smartphones directly to satellite constellations. Analyst Mike Crawford of B. Riley noted that the partnership with Ligado will allow AST SpaceMobile to bolster its capabilities by combining MSS spectrum access with telecom partnerships.