LightSquared in Contract Talks- Aims to be King of Wireless Wholesale Networks in U.S.

Upstart wireless telco LightSquared is seeking to become the leading wholesale network operator in the US.  By using LTE -a “4G” wireless technology that supports faster web access on smartphones, notebooks and tablet computers- the company expects to leapfrog Clearwire which is currently the largest U.S. wireless wholesale network provider.  Currently, Clearwire is selling wholesale WiMAX networks to Sprint, Comcast, and Time Warner Cable. 

LightSquared’s LTE mobile network will also utilize satellite spectrum acquired by New York hedge fund Harbinger Capital. The company plans to build a hybrid network that will integrate LTE mobile technology with a satellite-based service, something that’s never been done before and has attracted many skeptics. LightSquared launched a satellite last November, and three handset makers, including Nokia, are developing handsets for their network. AT&T’s proposal to buy T-Mobile USA was bad news for LightSquared, because it was hoping T-Mobile to be one of its first large wholesale customers.

Sanjiv Ahuja, LightSquared’s chief executive, says the company should begin trial services in the second half of this year, and that its 4G network will cover more than 80 per cent of the population by 2015. He claims LightSquared has two key advantages over Clearwire. First, by using LTE, LightSquared has selected a much more popular 4G wireless technology. Second, although Clearwire’s spectrum holdings are more than double the size of LightSquared’s, Mr Ahuja says the airwaves he plans to use are more attractive because they are at a lower frequency where wireless signals travel further. This means it should cost LightSquared less than Clearwire to build a network. “There will only be three 4G LTE providers in the US with a nationwide footprint: the top two [AT&T and Verizon] and LightSquared,” says Mr Ahuja.  Bye, bye Clearwire!

As reported by CommsUpdate, last week LightSquared signed up retail chain Best Buy as a customer for its wholesale LTE network, and also struck a long-term roaming agreement with pre-paid mobile operator Leap Wireless to supplement its own planned LTE coverage. According to the terms of its licence the LightSquared network must achieve coverage of 100 million people by the end of 2012, 145 million people by the end of 2013 and 260 million people (not including satellite coverage) by the end of 2015. The network is expected to launch in the second half of this year (2011).

According to Bloomberg, Time Warner Cable (TWC) is in talks with LightSquared, Citing two people familiar with the situation, Bloomberg reports that TWC is interested in re-selling 4G services over LightSquared’s network. However, the unnamed sources have stressed that negotiations are not public, and no deal is guaranteed. Note that TWC currently resells Clearwire’s 4G Mobile WiMAX network. Cablevision is considering a partnership with LightSquared, according to a Bloomberg report, which cited an unnamed source. The report came shortly after another Bloomberg report, which said that Time Warner Cable, Cablevision’s rival, also was considering a deal with LightSquared. Audrey Schaefer, a LightSquared spokeswoman, declined to comment on the Bloomberg report. She told FierceWireless that LightSquared does not have a specific timeframe for announcing customers, and that the company follows the preference of customers on whether they want the deal to be publicly known.

The Financial Times reports that LightSquared is in talks with at least 60 companies that were interested in reselling the company’s mobile network to offer voice or data services to consumers or businesses. “There are 60-plus discussions, and 15 of those are at a stage where we are negotiating contracts with our customers,” LightSquared CEO Sanjiv Ahuja told the Financial Times.

LightSquared is conducting LTE trials in Baltimore, Denver, Las Vegas and Phoenix, with commercial launches planned by the third quarter of this year. The company has committed to cover 100 million POPs by the end of 2012, 145 million by the end of 2013 and 260 million by the end of 2015.