Dish Network to acquire satellite phone operator TerreStar

Dish Network will acquire satellite mobile operator TerreStar Networks for $1.375 billion (£860 million) under an agreement approved by a bankruptcy court.

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Dish Network will acquire satellite mobile operator TerreStar Networks for $1.375 billion (£860 million) under an agreement approved by a bankruptcy court.

With a satellite that covers the US and Canada, TerreStar offers voice and data service to specially equipped dual-mode cellphones, including the TerreStar Genus from AT&T. It launched the TerreStar-1 satellite in 2009 and filed for bankruptcy protection in October 2010.

The US Bankruptcy Court for the Southern District of New York approved the buyout by Gamma Acquisition, a subsidiary of Dish, which was the only bidder. The deal still needs Federal Communications Commission approval.

The Genus phone includes both satellite and 3G capability using a software-defined radio chipset. The handset is intended to make satellite service available on a device that is less expensive and more like ordinary phones than the typical satellite handset. Its satellite data speed is about 64Kbits per second.

Dish declined to comment on the acquisition.

The TerreStar deal is Dish's second recent satellite acquisition. In March, Dish agreed to acquire DBSD North America, also in bankruptcy, for about $325 million. DBSD, a subsidiary of ICO Global Communications, has tested mobile voice, data and multimedia services on its G1 satellite, which is already in orbit. Dish sells satellite TV and radio plans across the US and resells home phone and Internet services.

Satellite phone ventures have a checkered history. Motorola lost billions on the Iridium global satellite phone network in the 1990s. Startup wholesale carrier LightSquared, which still hopes to build a $40 billion combined satellite and LTE (Long-Term Evolution) network across the US, faces strong opposition from vendors and users of GPS (Global Positioning System).

The National Telecommunications and Information Administration has recommended that the FCC withhold approval of LightSquared's network, because of test results showing interference with GPS. LightSquared has proposed using different frequencies.