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Harbinger Hatches LTE Challenger in US

Michelle Donegan
LR Mobile News Analysis
Michelle Donegan

The idea hatched by private equity firm Harbinger Capital Partners LP to launch a national wholesale Long Term Evolution (LTE) network in the US looks more like a plan now that the company has gained some additional financing, selected an equipment supplier, set coverage goals, and put an executive team in place. (See Harbinger Picks NSN for US LTE Plans.)

But the new venture, called LightSquared , has not yet secured all the financing that it will eventually need to meet its ambitious mobile broadband plan to cover 92 percent of the US population by 2015.

LightSquared has tapped Nokia Networks to supply the radio access and core networking equipment as well as deploy and operate the LTE network in a deal worth $7 billion to the vendor over eight years. (See NSN Lands $7B LTE Deal in US .)

The company said today that is has secured $1.75 billion in debt and equity financing to fund the LTE project. And the new financing adds to the $2.9 billion of assets that Harbinger has already contributed to LightSquared.

Frank Boulben, LightSquared's chief marketing officer, tells Light Reading Mobile that the company will need more financing to meet its network build out goal for 2015. He says that the company has no plans to pursue US government broadband stimulus funds, but in the next couple of years, it will look to raise more debt and equity financing.

"As we build out the network, we will start to generate revenue... Our contract with Nokia Siemens will be funded by the cash flow generated by the business," says Boulben. "In the coming two years we'll be raising additional debt and equity to meet that target. It will be easier to raise additional financing based on operational milestones."

LightSquared's plan is to build out 40,000 base stations to cover 92 percent of the US population with an LTE network by 2015 and sell capacity on that network on a wholesale basis to other fixed or mobile service providers, retailers, device manufacturers, and content providers. The company also has to meet coverage requirements set by the Federal Communications Commission (FCC) that are attached to the spectrum that it uses: that is, LightSquared needs to cover 100 million people by the end of 2012; 145 million by the end of 2013; and 250 million by the end of 2015.

LightSquared has 59MHz of spectrum that is mostly in the 1.6GHz band, or "L-band," according to Boulben. The L-band can be used for satellite or terrestrial wireless networks.

Boulben explains that the company's relationship with Nokia Siemens will enable it to "exceed" the FCC's coverage milestones and roll out the network more quickly than expected. "Nokia Siemens has the workforce already on the ground in the US to deploy our network," he says.

What about devices?
Because LightSquared's network will be a combination of satellite and terrestrial LTE, it will need new dual-mode devices to run on it. The satellite portion of the network is intended to be a complement to the terrestrial LTE network and it will support voice and some low-bandwidth data like text messages and emails without attachments, says Boulben.

The company will announce in the fall a "series of partnerships" with mobile device chipset manufacturers, which will integrate both the satellite protocol used and LTE support at 1.6GHz in their silicon for the LTE devices, according to Boulben.

"The devices will look exactly the same as regular mainstream devices," he says.

LightSquared will launch trial LTE networks in the first half of next year in Denver, Phoenix, Las Vegas, and Baltimore. And the commercial launch is planned for the second half of 2011.

— Michelle Donegan, European Editor, Light Reading Mobile

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Gabriel Brown
Gabriel Brown,
User Rank: Light Sabre
12/5/2012 | 4:29:21 PM
re: Harbinger Hatches LTE Challenger in US

Is that clear then, the devices have to also support satellite? Or is that something they can fudge later?

User Rank: Blogger
12/5/2012 | 4:29:21 PM
re: Harbinger Hatches LTE Challenger in US

Yes but how much will they cost? I would have thought a custom radio chip (for the satellite component) will add $20+ dollars. And that is assuming mass market volumes. I doubt Apple, RIM, Nokia, etc will be rushing to make a phone for this technology. I think Lightsquare will need to get a few ODMs to make a few custom devices. But why would consumers give up their iPhones and Blackberries to switch to this network? Satellite coverage when they are up a mountain? Niche market. They will have to undercut on service costs and give the phones away for free. If they spend $7bn on capex they might need to spend the same again on customer acquisition. 

User Rank: Blogger
12/5/2012 | 4:29:20 PM
re: Harbinger Hatches LTE Challenger in US

That is the current legislation. Harbinger and other satellite spectrum owners have been lobbying hard for the FCC to change this. But I imagine AT&T and Verizon are lobbying just as hard for no change. Who do you think has the bigger lobby?

User Rank: Light Beer
12/5/2012 | 4:29:14 PM
re: Harbinger Hatches LTE Challenger in US

This was the last sentence in a Business Journal Article.  Terre Star is a Harbinger company and part of Lightsquared.  This pie in the sky (big idea) is a good one, but there are many questions and mile stones that need to be met.


<div id="storycontent">

Sprint is locked in a dispute with satellite companies&nbsp;ICO Global Communications&nbsp;(Nasdaq: ICOG) and&nbsp;TerreStar Corp.&nbsp;(Nasdaq: TSTR), which Sprint claims are required to reimburse part of the project&rsquo;s $750 million. The companies have denied they are obligated to pay and are awaiting a final decision by the FCC.


Read more:&nbsp;Sprint Nextel wraps up $750M project to add U.S. wireless capacity - Kansas City Business Journal&nbsp;



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