US satellite/terrestrial venture LightSquared will need to raise US$3.5bn over the next two years in order to be cash-flow positive, CEO Sanjiv Ahuja said in a media interview.
A spokesman for the venture confirmed Ahuja comments to the Wall Street…
US satellite/terrestrial venture LightSquared will need to raise US$3.5bn over the next two years in order to be cash-flow positive, CEO Sanjiv Ahuja said in a media interview.
A spokesman for the venture confirmed Ahuja comments to the Wall Street Journal that the group is confident it can raise the required capital. The spokesman added that that it will not require regulatory approval to raise this money.
LightSquared’s CEO also said that the company is confident it can design a network that can live harmoniously with the GPS network and devices, despite the interference issues that have plagued its spectrum.
Back in July, LightSquared announced that it had secured US$265m in additional financing, drawn from both existing and new investors.
It said at the time that over the previous 12 months it had raised more than US$2.3bn.
However, analysts have pointed to how billions of dollars more would be required to fully fund its terrestrial roll-out plan. Under requirements that are linked to its spectrum licence, the group must be capable of covering at least 260 million with its terrestrial network by the end of 2015.
JP Morgan and UBS have been acting as main lenders to LightSquared, which is backed by New-York hedge fund Harbinger Capital Partners.
The GPS fix
LightSquared has signed an agreement to develop a system that it claims will “eliminate” interference problems with high-precision GPS receivers.
The group said that it had agreed with Javad GNSS, a US-based manufacturer of Global Navigation Satellite Systems (GNSS), to develop the new system.
It added that Javad GNSS had completed its design, made and tested these prototypes.
The founder of Javad GNSS, Javad Ashjaee, said that the interference problem was not a difficult one to solve “once you decide to solve it”.
“We’ve begun manufacturing preproduction models and expect to have 25 available within two weeks – we are not talking in hypotheticals here,” he said in a statement on 21 September.
According to the LightSquared statement, the process involves taking existing flagship receivers and reconfiguring filters and linear amplifiers to make them compatible with the venture’s bottom 10 MHz of spectrum – the part of its L-band frequencies that interfere with GPS systems.
LightSquared said that this process was “simple and inexpensive”, and that the additional cost for the technology was not expected to increase the selling price of the product to the consumer.
Ashjaee argued that high-precision GPS receivers face a wide range of interference issues, including congested frequencies and intentional jamming. He claimed that LightSquared had made the problem easier to solve by moving to spectrum further away from core GPS frequencies.
He also said that tests conducted so far by the GPS industry did not take into account the GPS modernisation plan that is currently taking place.
“Since we have demonstrated that LightSquared can certainly coexist with the current GPS satellite signals, the coexistence will be even stronger when the new GPS satellites with modern L1C, L2C and L5 unencrypted codes are launched,” said Ashjaee.
Ahuja struck an upbeat note on the news.
“This breakthrough is a final step toward LightSquared’s goal of building a nationwide wireless network that will bring lower prices and better service to Americans from coast to coast,” he said.
Yet the announcement drew a critical response from the Coalition to Save our GPS, an industry group that includes major GPS manufacturer Garmin.
The lobby group expressed doubts over the significance of LightSquared’s claims.
It argued “this is not a one-size-fits-all solution and a few prototypes do not a solution make”, and emphasised that the “estimated 750,000 to one million” high precision GPS receivers in the US vary widely.
The group demanded: “If and when solutions are available, LightSquared must accept responsibility for paying to replace the existing base of existing equipment with new products.”
But a LightSquared spokesman claimed that the GPS industry has had eight years to prepare for this transition.
“They have a responsibility to fix their defective devices for their own customers,” he said in an emailed statement.
