US regional operator MetroPCS is reportedly exploring a purchase of assets from TerreStar, the bankrupt US mobile satellite operator.
According to reports, MetroPCS is one of a number of potential bidders for TerreStar, which could be worth more than US$1 billion. No offer has been made and a deal may never materialise.
But the potential attraction for MetroPCS is clear: TerreStar’s spectrum assets would help the US operator to fill out the geographic footprint of its mobile network around the US. Unfortunately for MetroPCS, it might not be the frontrunner in any bid for TerreStar, which owes about US$1 billion in debt to senior secured bondholders led by Echostar, the satellite equipment vendor. For now, TerreStar’s largest creditor, EchoStar, appears poised to win the struggling business. MetroPCS might also face regulatory barriers to pulling off any deal.
TerreStar filed for chapter 11 bankruptcy protection in October. It built up huge debts building a satellite-based network intended to fill the gaps left by conventional mobile networks across North America. The company holds spectrum in the 2GHz band. Its strategy is to allow consumers to use traditional, land-based wireless networks with their smartphones and access the TerreStar network when such coverage is out of range or no longer available. The company launched its first satellite in July 2009. MetroPCS is looking forward to expand its US network. It also announced the spread of its LTE network into three additional cities, bringing the total to nine. It is still the only US operator to date to have launched an LTE handset.
