"Do you want to own the Lincoln Tunnel or the cars that go through it?" he asks. "You want to own the road."

In April 2008, Falcone paid Apollo $10 apiece for 16.4 million shares of SkyTerra. By the end of 2008, the shares had dropped 86 percent, to $1.79. Harbinger bought the shares of SkyTerra it didn't already own in March of this year for another $262.5 million.

Falcone renamed the Reston, Virginia-based company LightSquared in July. He hired Sanjiv Ahuja, former chief executive officer of France Telecom SA's Orange Group mobile phone unit, to run it.

Satellite Play

In addition to Light­Squared and his stake in cash-strapped TerreStar, Falcone bought a 28 percent stake in Inmarsat Plc, a London-based competitor to SkyTerra that has 11 satellites providing worldwide voice and data service.

Falcone wanted all of Inmarsat. He said in a July 2008 press release that Harbinger and SkyTerra, then independent, would team up and bid for the company after getting regulatory approval. Global credit markets seized up months later, and dealmaking halted. If Falcone bid, it wasn't made public.

Controlling Inmarsat would make Falcone's investment much more valuable, says Patrick Comack, an analyst at Zachary Investment Research & Management LLC in Miami Beach, Florida. Inmarsat controls wireless spectrum that's interwoven with LightSquared's. Having broader swaths of spectrum means you can send more information over the air. If LightSquared is to use its spectrum for broadband Internet, it must be separated into contiguous blocks, Comack says.

Dirty Spectrum

"They've got a huge amount of high-quality spectrum, but the majority isn't usable until they clean it up," he says.

To solve that problem, LightSquared said in August that it would pay Inmarsat $337.5 million over 18 months to modify its network so the frequencies can be untangled.

First « 1 2 3 4 5 6 7 8 9 10 11 12 13 » Next