LightSquared Lands $850M for LTE Build

LightSquared announced today that it has secured $850 million in debt, which it will use to build its national, wholesale Long Term Evolution (LTE) network in the US. (See LightSquared Secures $850M Funding.)

The company also revealed today that it has signed up the first wholesale customers for its LTE network and that it is in "advanced negotiations with numerous potential customers." LightSquared did not identify these first customers, but speculation has swirled around who will use its new network.(See SK Telecom Talks to LightSquared and T-Mobile Talks to Harbinger .)

With the additional $850 million, which marks the first round of a syndicated, secured credit facility arranged and led by UBS AG , LighSquared has received more than $2 billion in equity and debt proceeds and in "commitments," according to the company.

And they're going to need it: The company, which is backed by Harbinger Capital Partners LP , plans to build a hybrid satellite/terrestrial LTE network that will cover 92 percent of the US population by 2015. LightSquared has contracted Nokia Networks for the LTE network equipment in a deal worth $7 billion. (See Harbinger Hatches LTE Challenger in US, LightSquared Eyes L-Band for LTE, LightSquared Reveals More Spectrum Plans, and NSN Lands $7B LTE Deal in US .)

The company's ambitious plan and unique business model landed it a place on the finalist list for Light Reading's Leading Lights awards this year. (See Leading Lights Finalists: Private Company of the Year and Light Reading's 2010 Leading Lights Finalists.)

With the influx of new funds and signs of demand from service providers, LightSquared said that it will accelerate an implementation agreement that it has with Inmarsat. That means LightSquared will get access to Inmarsat's spectrum sooner than it had originally planned and will soon owe Inmarsat annual lease payments.

— Michelle Donegan, European Editor, Light Reading Mobile

FredStein 12/5/2012 | 4:21:59 PM
re: LightSquared Lands $850M for LTE Build

The article refers to $7B multiyear contract with Nokia Siemens Networks. Are there more details about which systems in the NSN portfolio apply? Also curious about the topology and the target geographies.

Michelle Donegan 12/5/2012 | 4:21:57 PM
re: LightSquared Lands $850M for LTE Build

Hi Fred,

As I understand it, the contract is for radio access and core network equipment, as well as to operate the network after its built. But I don't know which specific systems exactly.

I'm curious about the rest too.


jakeridden 12/5/2012 | 4:21:28 PM
re: LightSquared Lands $850M for LTE Build

I don't know what the system (box) will be called, but I think it'll be a point to point link for around $1.5K each...similar to what dragonwave makes..1Gbps link..light squared will probably get a discount based on how many units they deploy so cost could be as low as $1K for each box..meaning $2K for the link..

The topology will need to be a ring with about 50% of the links needing a repeater to get line of sight. There will be latency (delay) from the repeaters though..

I think the fcc has a rule about if you have a satellite network then you can have some towers on land. I think that's why light sqared bought out skyterra and some other satellite company..they have to build the network by some short and fixed time determined by the fcc in order to use the spectrum they have..

Harbinger capital knows there is a need for more bandwidth (so they raised money for light squared), but they dont' know how to operate a network..that's why all the guys from skyterra are the management for light squared.

Skyterra uses satellite equipment not base stations so they needed to work with a company that can set up a land network (nokia)



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