Feeds

Sat-phone operator TerreStar's tits swinging skyward?

Good thing LightSquared only has a toe on the rug

Remote control for virtualized desktops

Satellite-phone operator TerreStar is heading for Chapter 11 the Wall Street Journal reports, putting America's personal satellite phone network at risk.

TerreStar has more than $1bn in debt, most of which got spent on its first bird, the imaginatively-named TerreStar-1, which went up in July 2009.

Since then the company has been borrowing money to get TerreStar-2 launched, burning more than $200m a year on average. Now there's less than $15m in the till, according to the Wall Street Journal. The paper expects bankruptcy protection to be applied for in the next few days, which is bad news for LightSquared who owns almost half of TerreStar's common stock.

But at least TerreStar is operational today, and for $799 you can buy a phone which not only works across the USA but switches to AT&T's GSM/HSPA network when it can, though satellite connectivity will set you back an additional $25 a month and 65 cents a minute.

It's hard for Europeans, particularly in the UK, to understand how patchy coverage is in the USA. We might moan about not-spots, but that's a reflection of how we've come to expect coverage to be ubiquitous. America is a much larger country, and one with huge areas where mobile coverage isn't economical so satellite phones make a lot more sense.

But not at 65 cents a minute, as LightSquared is well aware. LightSquared's audacious plan is to built a completely new LTE network across the country, using spectrum inherited from another satellite operator: SkyTerra. SkyTerra hasn't launched any birds yet, but once it does (currently scheduled for December) they'll operate in L Band (1.6GHz) to fill in the gaps in the ground network.

LightSquared is owned by hedge fund Harbinger, who acquired a load of space-based holdings while putting LightSquared together, including 48 per cent of the common stock in TerreStar, and a significant chunk (almost 30 per cent) of Immersat too. TerreStar operates at 2GHz so won't be compatible with LightSquared's final network, but it does give the company an operational network now.

Luckily, for LightSquared, it seems that its investment in TerreStar isn't huge - about $12m according to the 'Journal. That might sound like a lot, but when you're planning to spend $7bn building a national network, and have yet to announce a single customer, then $12m is small change.

But for TerreStar investors things look bleak, with the company looking at exchanging debt for equity to keep operational while it sorts out some serious restructuring. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
YOU are the threat: True confessions of real-life sysadmins
Who will save the systems from the men and women who save the systems from you?
Download alert: Nearly ALL top 100 Android, iOS paid apps hacked
Attack of the Clones? Yeah, but much, much scarier – report
Broadband sellers in the UK are UP TO no good, says Which?
Speedy network claims only apply to 10% of customers
Virgin Media struck dumb by NATIONWIDE packet loss balls-up
Turning it off and on again fixes glitch 12 HOURS LATER
Ofcom snatches 700MHz off digital telly, hands it to mobile data providers
Hungry mobe'n'slab-waving Blighty swallows spectrum
Fujitsu CTO: We'll be 3D-printing tech execs in 15 years
Fleshy techie disses network neutrality, helmet-less motorcyclists
Facebook, working on Facebook at Work, works on Facebook. At Work
You don't want your cat or drunk pics at the office
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Choosing a cloud hosting partner with confidence
Download Choosing a Cloud Hosting Provider with Confidence to learn more about cloud computing - the new opportunities and new security challenges.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.