Hedge fund Harbinger Capital Partners’ ambitious plan to create a nationwide satellite/terrestrial 4G-LTE wireless broadband network in the United States has taken a significant step forward after it signed a US$7bn 8-year contract with Nokia Siemens…
Hedge fund Harbinger Capital Partners’ ambitious plan to create a nationwide satellite/terrestrial 4G-LTE wireless broadband network in the United States has taken a significant step forward after it signed a US$7bn 8-year contract with Nokia Siemens Networks to deploy, install, operate and maintain the next generation network.
As part of the announcement, the hedge fund also revealed a new name for the venture, LightSquared.
Under the terms of the contract, which remains subject to final approval by the boards of both parties, Nokia Siemens will roll out a network of 40,000 base stations covering 92% of the US population by 2015.
The deal should assuage industry and investor concerns over the aggressive build-out schedule that Harbinger committed to in order to secure Federal Communications Commission approval for its plan. LightSquared needs to provide coverage in the United States to at least 100 million people by December 31 2012, at least 145 million people by December 31 2013, and at least 260 million people by December 31 2015.
Once complete, LightSquared will wholesale capacity on the network to the nation’s mobile operators. It has already held talks with T-mobile over such a deal, although the FCC has banned the country’s two biggest wireless carriers, Verizon Wireless and AT&T, from being able to lease any capacity.
In order to fund the network, Harbinger revealed that LightSquared is in the process of securing debt and equity financing of approximately US$1.75bn. Harbinger has already contributed US$2.9bn of assets to the project, including the nascent mobile satellite services operator SkyTerra that Harbinger bought out for US$262.5m earlier this year.
SkyTerra is integral to Harbinger’s plans as it holds 10MHz of L-band spectrum through its ATC (ancillary terrestrial component) licence. This spectrum enables LightSquared to provide satellite communications services in areas outside of the terrestrial network. More importantly, by taking over SkyTerra and with it its ATC licence, Harbinger secured initial approval from FCC for its nationwide satellite/terrestrial network plan. In all LightSquared controls 59MHz of satellite and terrestrial spectrum.
