LightSquared to Build Nationwide, Wholesale 4G Network

LightSquared, backed by Harbinger Capital Partners, is investing billions to create a nationwide, wholesale, 4G wireless network, using satellite and terrestrial technology. The new company, which was launched just yesterday, has received $2.9 billion in assets from Harbinger, and raised a portion of  $1.75 billion in debt and equity from unnamed sources.

LightSquared does not plan to compete directly with retail providers, but rather offer wholesale access to a variety of other mobile broadband providers. ”As the nation’s first wholesale-only integrated wireless broadband and satellite network, LightSquared will provide wireless broadband capacity to a diverse group of customers, including retailers; wireline and wireless communication service providers; cable operators; device manufacturers; web players; content providers; and many others,” LightSquared said in a release.  LightSquared plans to offer its partners three coverage options: satellite-only, terrestrial-only or a combination of the two.

The company has selected Nokia Siemens Network to build, operate and maintain the wireless network in an eight-year deal valued at $7 billion.  The network will consist of approximately 40,000 cellular base stations, and the company plans to cover 92% of the U.S. population by 2015. LightSquared controls 59 MHz of nationwide spectrum.

LightSquared is the new name for mobile satellite communications company SkyTerra, originally set-up by Harbinger. Harbinger’s business plan hinges on a key 2003 FCC ruling which allows the satellite firm to utilize its spectrum for terrestrial wireless services as long as it provides dual-mode devices, and the terrestrial network remains ancillary to its satellite services.

Tech blog Giagom points out although this project is (initially) well-financed, many hurdles remain, including available network speeds, and the variety, size and capability of customer devices. It’s too early to determine if LightSquared will make it off the ground, or if the company will bring its wholesale LTE broadband network to rural areas. Nevertheless, the initial cash outlay and the partnership with NSN is something to watch.

For more, see this release.

Related posts:

1. LightSquared Signs Two Partners for its Wholesale 4G Network
2. LightSquared Announces Significant Financing
3. LightSquared and Sprint Sign 15-Year Deal
4. Google Plans to Build FTTH Network
5. EATEL is the First ILEC to Partner with LightSquared