LightSquared Needs Sprint in its Race to 4G

11:15 AM -- Inking a Long Term Evolution (LTE) network-sharing deal with Sprint Corp. (NYSE: S) is the only way I can think of that the would-be 4G wholesaler LightSquared can reach its Federal Communications Commission (FCC) -mandated goal of covering a 100 million people by the end of 2012.

LightSquared is doing very early testing on whether its LTE network could cause interference with GPS receivers at a site near Las Vegas. The company says it will continue with technical testing through 2011 and expects customers to launch services on the network in the first half of 2012.

The Harbinger Capital Partners LP -backed venture currently has a US$7 billion infrastructure deal with Nokia Networks . When I spoke to LightSquared in April, Jeff Carlisle, executive vice president for regulatory affairs and public policy at the company, said it was working on zoning and tower agreements but hadn't deployed base stations yet.

Logically, it is unlikely to deploy much of anything before the final GPS report from the FCC, which is due June 15. Even the company itself now says it will continue technical testing through 2011.

Now, step back in time with me for a moment: Sprint and its WiMax partner, Clearwire LLC (Nasdaq: CLWR), first announced plans to deploy that technology for 100 million potential customers in July 2007. The partnership had some hitches to start with, but "new" Clearwire got a $3.2 billion injection in May 2008 from Google (Nasdaq: GOOG). Clearwire launched its first WiMax market up in January 2009. It didn't reach the goal of 100 million covered, however, until November 2010.

So, at the very most, LightSquared has 18 months to do what it took Clearwire more than two years to do. That's assuming there are no regulatory GPS hold-ups to its first-of-a-kind hybrid satellite and LTE network. Which, of course, is another big question mark hanging over the company right now.

Let's not even get into the funding question yet...

The only way I can see this network hitting the 100 million target is if LightSquared ditches NSN and piggy-backs on Sprint's "Network Vision" plans. This involves Sprint deploying multi-modal base stations that can support CDMA, WiMax and possibly LTE. Sprint CEO Dan Hesse is open to the idea of network sharing, as he's made clear several times. So, LightSquared's future seems to me to hang on two issues:

First and foremost, can it clear up the GPS question? If that doesn't happen then it won't need to worry about deploying a network anyway.

If it does get the green light on GPS, however, it seems to me that LightSquared needs Sprint to have a hope of making its targets.

— Dan Jones, Site Editor, Light Reading Mobile

joset01 12/5/2012 | 5:04:32 PM
re: LightSquared Needs Sprint in its Race to 4G

Anyone know what gear LightSquared is using in Vegas? NSN?

TelecomEngineer 12/5/2012 | 5:03:33 PM
re: LightSquared Needs Sprint in its Race to 4G

So if Lightsquared is using Sprint's 3G network to make it's coverage claims and Clear is doing the same thing with its "4G" wimax network, help me understand the value? 

Its like if you have a Ferrari, I drive a Yugo, Fred down the street drives a Gremlin.  You agree to let both Fred and I tell everyone we own a Ferrari and let us take them for rides in it occassionally, but in reality, both I and Fred essentially don't drive anything worth mentioning and are just living the lie of "owning" your vehicle.

Here's the company that does have it right and this was the original plan of Sprint before some exec got caught up in the claims of the Nextel hype machine and blew $35B to buy them.  Verizon used their cash wisely to purchase a real asset, 700MHz spectrum, and unlike Clear/Sprint/XOHM/LightSquared, their definition of "coverage" and a "launched" market remains as stringent as it ever was (which is why Verizon will win in the end).  Verizon is building their LTE network from scratch using much better spectrum than LightSquared/Clear/Sprint/XOHM.  In order to get even comparable coverage to Verizon's LTE network, LightSquared/Clear/XOHM will have to build 75,000 sites minimum at a conservative estimate of $250k per site, and as you correctly pointed out, just the site acquisition time frame will be 24 months.  Ignoring the timeline, a very rough estimate of the capital BOTH Clear and Lightsquared would need for their overlaping national networks, just to be on par to Verizon is $18,750,000,000 for a true launch.  This is only capital and doesn't include the operating cash they will need for all their marketing spin experts, engineers, T1's for backhaul, ect that they will also each require.  If you don't believe me, ask the CFO's of each company how many sites by what date they plan to build, do the math, compare that to Verizon only having to build/install equipment at 35,000 sites to be on par to LightSquared's 75k sites AND Clear's 75k sites.  The only hope of Lightsquared and Clear is to try to merge or sell themselves to an unsuspecting mega company while folks are still ignorant to their stunt.  Each of these crooks then retires with a ton of cash sticking someone else with the facade of a company and business case.

joset01 12/5/2012 | 5:03:32 PM
re: LightSquared Needs Sprint in its Race to 4G

Re: "So if Lightsquared is using Sprint's 3G network to make it's coverage claims and Clear is doing the same thing with its "4G" wimax network, help me understand the value?"


LS isn't saying anything of the sort yet. It's all rumoured right now. The thing that *is* on record is that Sprint wants to deploy multi-modal basestations. The concept then being that Clearwire WiMax and -- possibly -- LightSquared LTE would be supported and piggyback on the Sprint network.

As you suggest that still begs the question:

- Doesn't Sprint have a hell of a lot of deployment to do in 2011-12 to support this concept

- Will device makers actually be prepared to support handsets and devices that need to run across four freqencies at the very least?

- Will GPS issues on the LightSuared side hold all this up anyway?



TelecomEngineer 12/5/2012 | 5:03:27 PM
re: LightSquared Needs Sprint in its Race to 4G

Comment 1:  Here's where Barry West, Jon Pappa John, Doug Smith, Iyad Terrazi, and the rest of his Wimax cronies continued to miss the simple fact that coverage beats bandwidth anyday.  If you don't have sufficient coverage (exponentially more difficult with increased frequency), it doesn't matter if you have 60GHz of spectrum, you can't use it.  Sprint took beatings from customers for more than 10 years by having to prioritize which markets to put capital in to meet current Verizon coverage and which markets were so far behind Verizon, other than a few token sites to keep the market alive, minimal investment.  Verizon's dominance came from a network with a higher density of sites than Sprint could afford to build (and they had the benefit of 800MHz & 900MHz in some areas).

So if site density (coverage) wins the wireless war in the end and the time leading up to that is full of 1 company building a network and the other wasting $ and street credit on posturing, spin, false bravado of individuals either too arogant, uniformed, or both, stating what they will do in the "future" gaming the system just enough to make their million and bail.

Simple math taking an assumed radius per cell site (the original wimax link budget was "boosted" to make coverage maps look like how Barry wanted them to look) and an accurate link budget by frequency and technology, one can, in very short order have an 80% accurate estimate of the number of sites needed to get the coverage and thus quality you desire.  How many sites for, say LS, are needed for true high quality coverage inside and outside across the market equivalent to the current wireless data market leader?  2x to 3x that of Verizon's LTE network?  Are there even enough locations to house all these separate sites?  Are you telling me any sane person is going to fund LS $20B to build this network plus a billion in cash annually for all its backhaul, site leases, and employee salaries?  Let's assume Wall Street is dumb enough to do this.  How many subscribers will it take for LS to be ebitda positive and how long will it take to acquire those?  What % of those subscribers will have to come from Verizon or ATT?  90%?  Are there really premium high ARPU subscribers out there who have never had a wireless phone?  This means you have to match or come close to the market leader at "launch" and not through trickery and deception, through engineering and the laws of physics.....Ask these simple business questions ahead of working yourself into a new technology lather and you can save alot of shareholder money.  The ability to fund the necessary site density of either, let alone both, Clear or LS ends this discussion and causes us to doubt the ethics and sanity of those at the helm of each company.

Can a half-ass network with laughable coverage that relies on another network 95% of the time (current figure for WiMax) but hype's itself as really cool survive in the marketplace long-term?  Instead of being committed to building something real of quality, these folks at the top are focused on doing whatever they can to "con" Wall Street and have it appear they are producing much more value than they really are, with a few creative stock issueances, these folks are on board until they belive they can successfully extract their portfolios, cash out, and go on to the next big hype. 

We used to joke, because of Barry and others, iDEN must stand for "I Don't Ever kNow", because so much of their decisions were based on flawed underlying foundational premises and unrealistic hardware costs. 

Comment 2: Like an RF network that auto optimizes, another holy grail is a 1 base station with shared coax and antennas with every technology and frequency capability inside that hands off flawlessly, reports OM's accurately, oh and allows for separate orientations and downtilts each type of network will require.  Oh, and an antenna at the site and in the handset that can handle 700MHz to 3.4 GHz (thought LS has some stuff up here, if not, 2.4GHz).  

Comment 3:  Don't forget, and this is Sprint's archilles heel that has existed long before the Nextel debacle, the person who "wins" in the end at wireless is the one with the most reliable network at the best price.  Sprint's ingrained culture has always been to spend a ton of cash trying to be "different" and better than everyone else.  Consider your opex costs for essentially 3G voice and 1x data (possible at 800MHz, 1900MHz), EVDO Rev A (1.9 GHz, maybe 800MHz Maybe 900MHz, maybe 2.4GHz), EVDO Rev B (1.9GHz, 2.4 GHz), LTE (maybe 800MHz, maybe 2.4GHz, maybe 1900MHz), Wimax (2.4GHz).  I'd love to see call flow diagrams of a voice call that runs a simultaneous LTE and Rev B data session, that is moving through the network, handing off site to site, switch to switch (if all IP gateway to gateway).  Not to mention configuring call setup based network preferences.  Could you design a network with any more points of failure than this?  "I need a peg count that shows the # of call setup failures for an LTE call at 1.9GHz who is in handoff with a different 2.4GHz LTE site and I need to know if a simulataneous voice call was also up and its corresponding per call measurement data.  Forget downtilting or swapping an antenna for the 2.4GHz LTE sector as you've purchased a single antenna solution (along with a flux capacitor) that must be changed for all or none.

Could a company make a network any more complex when if they just realized this is all about a fat "pipe" for voice and data to reliably go from one place to another, they'd stop all this masochistic technology buffet and, like Verizon, choose your technology for voice, fast data, super fast data, and spend less time talking and trying to amaze Wall Street and invest in T1's and equipment to build a network.  Other than Wimax's inefficiency in overhead vs LTE and a lack of economies of scale, they are more similar than different. 

This is like owning a car company made of up of Dodge and Range Rover QC folks and trying to compete against Lexus for reliability.  Because in the end, no matter how much hype, flashy ads, outrageous claims from the president of the Dodge/RangeRover company your car has, if it can't go where you need it reliably, and must rely on a "tow truck" to pull it around 80% of the time, what good is it?

Greed is defined as trying to get more value from your product or service through deceptive practices, while profit is defined as the ethical pursuit of money applying reasonable marketing polish, but delivering to your customer what your marketing/advertising is trying to invoke in them. (remove fine print wording here). 

Greed is not good, sorry Gordon Gecko....seeking profit by delivering a good or service your customer understands fully and agrees voluntarily to give you money for, is the true capitalism that made this country great.

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