Harbinger in rumoured T-Mobile and strategic investment talks

Ever since it revealed its plan to create a satellite/terrestrial broadband mobile 4G network at the beginning of April, Harbinger Capital Partners has been the subject of intense media speculation. The latest reports allege that the hedge fund has held…

Ever since it revealed its plan to create a satellite/terrestrial broadband mobile 4G network at the beginning of April, Harbinger Capital Partners has been the subject of intense media speculation. The latest reports allege that the hedge fund has held preliminary discussions with mobile telecoms operator T-Mobile USA over the latter partnering on the network, which is due to be completed by the end of 2015.

Deutsche Telekom owned T-Mobile is currently the fourth largest wireless operator in the United States and has been reviewing its options over the transition to 4G Long-Term Evolution (LTE) services, having been around two years behind its rivals in constructing a 3G network. The company recently held talks with Craig McCaw’s Clearwire and has seemingly done the same with Harbinger over its planned network.

T-Mobile’s rivals, AT&T and Verizon, have already been banned by the FCC from leasing capacity on Harbinger’s planned network due to competition fears. The requirement was stipulated as part of the FCC’s approval of Harbinger’s takeover of ATC licence holder SkyTerra, an integral part of its next generation network plans.

The news follows hot on the heels of reports in the US that Harbinger is in talks with Qwest Communications and SK Holdings Co over becoming strategic investors in the project.

Harbinger estimates that the total cost to roll out the project will be close to US$4bn and the hedge fund is seeking up to US$2bn in financing. SatelliteFinance understands that Harbinger has already sounded out a number of banks over a debt facility and this latest speculation suggests that it is seeking equity investment at the same time.