Harbinger completes acquisition of SkyTerra

Investment firm Harbinger Capital Partners completed its $262.5 million acquisition of mobile satellite telecom provider SkyTerra Communications Inc. Taking into account outstanding debt and securities, the deal was valued at more than$1.8 billion. The deal was originally announced last September.
Harbinger had agreed in 2008 to provide $500 million to SkyTerra and its subsidiary Mobile Satellite Ventures to fund operations through the third quarter of 2010.
SkyTerra currently offers mobile satellite services using a pair of geostationary satellites that support two-way radio, mobile data, voice and fax services. The company is licensed by the United States and Canadian governments to operate in the L-band spectrum, which it has coordinated for use.
The acquisition should position SkyTerra, which was formerly known as Mobile Satellite Ventures, to take advantage of its plans to begin using 30 megahertz of cellular spectrum in combination with its satellite-based services. The move is seen as paramount to the mobile satellite telecom market that has yet to find commercial success with consumers despite billions of dollars spent on satellite launches.
Rival Terrestar Corp. announced last year a deal to offer its satellite/cellular hybrid service through AT&T Mobility. Terrestar said the satellite-based portion of the service was operational and that it was in the midst of completing a backup satellite to have ready to launch in case the current satellite fails. Initial coverage area will include the U.S. and Canada as well as up to 200 miles off the coast of both countries. Puerto Rico and Hawaii are also included in the coverage zone.
The satellite phone industry has had a rocky past littered with spectacular flame outs and heated court battles that resulted in significant consolidation amongst the players. However, the U.S. government has been a broad supporter of the industry following the aftermath of terrorist attacks and natural disasters that highlighted the vulnerability of traditional cellular networks.