US satellite/terrestrial venture LightSquared and wireless carrier Leap Wireless have announced a new 4G roaming agreement.
Financial and other terms of the deal were not disclosed.
But the companies did reveal in a joint statement that Leap’s…
US satellite/terrestrial venture LightSquared and wireless carrier Leap Wireless have announced a new 4G roaming agreement.
Financial and other terms of the deal were not disclosed.
But the companies did reveal in a joint statement that Leap’s operating subsidiary, Cricket Communications, would be able to supplement the LTE coverage that it plans to deploy over its own network with LTE roaming services from LightSquared.
Leap’s president and CEO, Doug Hutcheson, said that the company was planning to begin deploying its own LTE network this year. He said that the agreement with LightSquared would allow Leap to offer its customers an “ever-greater service area” of 4G.
He also hinted that spectrum holdings had been a consideration in the deal, because the roaming agreement “will also give us flexibility to access additional 4G capacity where needed as data-centric devices become more popular and require more and more bandwidth”.
Back in February, LightSquared CMO Frank Boulben told SatelliteFinance that the venture had confirmed wholesale agreements with five customers: two carriers, a device manufacturer, a national retailer and a website. Since then, the venture has unveiled a further two partnerships.
An agreement with US electronics chain BestBuy was announced on 23 March to sell its services through the group’s Best Buy Connect wireless offering. But perhaps more significant was 11 March’s announcement of a network partnership with US rural wireless provider Open Range.
This partnership includes a wholesale agreement whereby Open Range can sell LightSquared’s satellite capacity to its customers.
It may also include a nationwide 4G roaming arrangement and a licensing agreement that enables Open Range to lease L-band spectrum owned by LightSquared.
Sanjiv Ahuja, LightSquared’s chairman and CEO, said the deal would enable his company to provide a larger nationwide LTE service to its retail partners and customers.
He added that the partnership “is part of LightSquared’s planned commercial service which will result in billions of dollars of investment, offer consumers a new wireless competitor and create tens of thousands of jobs across America”.
Open Range had previously leased 2483.5MHz-2495MHz spectrum from mobile satellite operator Globalstar. However, the terrestrial rural broadband provider was forced to search for alternative spectrum after the FCC denied Globalstar an extension to milestones governing its ATC licence on 14 September.
This decision prompted criticism from some industry observers, who accused the FCC of double standards because the regulator has granted LightSquared similar waivers in the past, including a deadline extension last year that enabled the launch of its first satellite, SkyTerra 1.
The FCC has allowed Open Range to continue using Globalstar’s spectrum until a new spectrum partner can be found.
As part of efforts to appease regulators, Open Range has made voluntary contributions to the US government, totalling US$99,341 to date, representing the lease payments that would have been paid to Globalstar after the annulled agreement.
An Open Range spokesman said the group expects to begin offering LTE in mid to late 2012.
Meanwhile, reports suggest LightSquared is also seeking to secure a partnership with US mobile operator Sprint Nextel, with the aim of using the group’s equipment and cell sites to operators 8 accelerate the deployment of its own ground infrastructure.
The reported plan to utilise extra capacity on Sprint’s network, which will become available as part of the operator’s proposed US$5bn infrastructure investment, is likely to increase pressure on LightSquared’s US WiMAX wholesale rival Clearwire.
Clearwire, which currently sees Sprint as a majority shareholder and customer for 4G capacity, is also seeking additional funding for significant network expansion in the near term.
However, following the US$39bn merger of US telcos AT&T and T-Mobile USA, some industry observers suggest Sprint is likely to take time to step back and review the changing playing field before choosing its next step.
Sprint has declined to comment on the partner speculation, but has insisted that every option it is considering for the future will still involve Clearwire in some way.
Other rumoured partnerships in the works include a network infrastructure deal with Ericsson, and a mobile-web agreement with US media giant Time Warner Cable.
While speaking to SatelliteFinance in February, Boulben also revealed the venture plans to accelerate its terrestrial deployment by more than a year.
This could mean the group’s network, which is being built by European vendor Nokia Siemens Networks, will be able to cover 260 million people in the US by 2014.
Harbinger to restructure LightSquared fund
US hedge fund Harbinger Capital Partners reportedly plans to issue a new class of shares for US satellite/terrestrial venture LightSquared to encourage more direct investments.
Billionaire manager Philip Falcone wants to make it easier for existing and prospective investors to manage and make direct investments in the venture, according to reports citing an email sent to his fund’s members.
Although LightSquared has raised more than US$2bn in debt and equity over the last seven months, investors are reportedly concerned that Harbinger may find it difficult to honour redemption requests. This is because significant revenues are likely to still be years away, with the group’s terrestrial network far from completion.
Under Falcone’s reported plan, redemption requests could theoretically be met through a combination of cash and interest in the new LightSquared shares.
Harbinger has recently received redemption requests from a number of high-level investors, including Blackstone Group, Goldman Sachs and the New York State Common Retirement Fund, the report adds.
In addition, LightSquared reportedly requires at least another US$5bn to roll out its terrestrial network, and meet an FCC
target to cover 238 million people in the US by the end of 2015.
News of the restructuring plan follows LightSquared’s first report to the FCC on the progress it is making to alleviate GPS interference concerns over its planned network.
These concerns were officially raised by the National Telecommunications and Information Administration on 12 January. In response, LightSquared committed up to US$20m to research ways to remove any potential problem.
Updating the FCC on 25 February, the company announced the formation of a “technical working group” in cooperation with the US GPS Industry Council (USGIC).
The two groups will file a report every month until 15 June 2011 to provide the FCC with details about test plans and procedures.
Harbinger was unable to comment before the press deadline.
