July 20, 2010
Nokia Siemens Backs New U.S. Wholesale LTE Network with $7 Billion
Today marks the launch of LightSquared, a new nationwide 4G-LTE wireless broadband network integrated with satellite coverage. As a U.S. wholesale-only, integrated wireless broadband and satellite network, LightSquared will provide wireless broadband capacity to a diverse group of customers, including retailers; wireline and wireless communication service providers; cable operators; device manufacturers; Web players; and content providers.
The LightSquared network will allow these partners to offer satellite-only, terrestrial-only, or integrated satellite-terrestrial services to their end users. This wholesale-only business model ensures LightSquared has no conflict of interest with its customers. LightSquared seeks to transform the wireless broadband industry to one that fosters innovation, creativity, and freedom of choice via the first truly open and net neutral wireless network.
The driving force behind LightSquared is Philip Falcone, founder and CEO of Harbinger Capital Partners, who foresaw the explosive demand for wireless broadband connectivity and made several investments through the Harbinger funds, including the acquisition of SkyTerra Communications, now part of LightSquared.
Falcone has partnered with Sanjiv Ahuja, who will lead the LightSquared team as chairman and CEO. Ahuja will lead the development and nationwide rollout of the new network. Ahuja was CEO of Orange Group from 2004 through 2007, during which Orange's customer base grew from 48 million to more than 100 million subscribers globally.
Nokia Siemens Networks has signed an eight-year agreement with LightSquared, subject to final approval by both the Nokia Siemens Networks and the LightSquared boards. The agreement represents more than $7 billion over eight years, and includes network design, equipment manufacturing and installation, and network operations and maintenance. The nationwide LightSquared network, consisting of approximately 40,000 cellular base stations, will cover 92 percent of the U.S. population by 2015.
LightSquared controls valuable high quality spectrum assets of 59 Mhz of nationwide spectrum in an advantageous frequency position. In addition to the $2.9 billion of assets already contributed by Harbinger Capital Partners and affiliates, LightSquared is announcing additional debt and equity financing of up to $1.75 billion.
Doug Smith will serve as SVP, engineering and operations for LightSquared and will be responsible for the company's network design, deployment, and operations. Before joining LightSquared, Smith was SVP, engineering and operations for Clearwire and has also held senior technical and operations positions at Sprint Nextel and Nextel.
Jeff Snyder will serve as LightSquared's SVP, satellite engineering and operations. Snyder, who previously served as group VP, satellite engineering and operations for SkyTerra Communications, will be responsible for the management of the procurement, construction, launch, testing, and operation of LightSquared's next generation satellite network and spacecraft.