Satellite Turns Eyes Towards TerreStar

In recent weeks, more attention has been given to TerreStar, the fledgling company that's building an integrated mobile satellite-terrestrial communications network.

Last month, TerreStar won investments totaling $300 million from EchoStar and Harbinger Capital. Of that amount, $200 million was made available to fund the TerreStar 2 satellite, the company said.

Also part of the transactions, TerreStar said it will obtain access to 1.4 GHz spectrum currently held by EchoStar and Harbinger.

The deal, according to an analysis released last week by Near Earth LLC, "serves to further differentiate TerreStar from its MSS (mobile satellite service) brethren and may signal one approach EchoStar intends to use to counter cable TV's vaunted triple play."

In its own assessment, Stifel Nicolaus said the $300 million investment "may represent the kind of strategic move for the MSS sector that has been awaited for so long, though it could leave other MSS firms with one fewer partnership option."

TerreStar has said it will provide 4G speeds via its terrestrial network, "potentially giving EchoStar a mobile broadband play that could shake up the industry," said Stifel Nicolaus in its research piece. "However, it is not clear when the network will be built and whether EchoStar is wedded to TerreStar or merely dabbling. "