20 MHz S-Band Licenses Expected to Command up to $1b
A report in the Wall Street Journal indicated that MetroPCS (NYSE:PCS) is among a group of potential suitors interested in acquiring the assets of bankrupt TerreStar Networks, a majority owned subsidiary of TerreStar Corporation (Nasdaq:TSTRQ.PK). On October 19, 2010, TerreStar Corporation reported that TerreStar Networks and certain other affiliates had filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code as part of a strategic plan to strengthen their financial position and achieve long-term success in the mobile satellite services market.
TerreStar Networks, in cooperation with its Canadian partners, TerreStar Canada and TerreStar Solutions, is planning to launch a wireless communications system to provide mobile coverage throughout the United States and Canada using integrated satellite-terrestrial smartphones and other devices. The system is to be based on an integrated satellite and ground-based technology intended to provide communication service in most hard-to-reach areas and was expected to provide a nationwide interoperable, survivable and critical communications infrastructure. TerreStar Network's plan is to provide multiple communications applications, including voice, data and video services.
TerreStar Networks launched its first satellite, “TerreStar-1,” on July 1, 2009 and placed it into its assigned orbital slot in the geosynchronous arc. The company was planning to offer its mobile satellite service (MSS) in conjunction with ancillary terrestrial component (ATC) service, creating an integrated satellite and terrestrial wireless communications network. The network was expected to allow a user to utilize a mobile device that can communicate with a traditional land-based wireless network when in range of that network, but communicate with TerreStar-1 when not in range of such a land-based network or when such network is unavailable.
TerreStar has the right to use two 10 MHz blocks of contiguous and unshared MSS S-band spectrum covering a population of over 330m throughout the United States and Canada. On January 13, 2010, TerreStar Networks was granted authority by the FCC to operate dual-mode mobile terminals that can be used to communicate either via TerreStar’s geosynchronous-orbit MSS satellite or ancillary terrestrial component base stations. ATC base station operations were also authorized. These ATC authorizations provide for the ability to integrate terrestrial mobile services with MSS. TerreStar Networks hopes to use this ATC authorization to create a two-way wireless communications network providing coverage, services and applications to mobile and portable wireless users. The company expected to achieve this result through one or more strategic partnership with terrestrial-based wireless carriers.
According to the Wall Street Journal, MetroPCS is interested in obtaining TerreStar's S-band radio licenses which could be worth as much as $1b.