LightSquared, a company that has raised $2 billion to build a wireless broadband network that incorporates satellite technology, is in talks with a major U.S. mobile operator to help speed up the development of its infrastructure at a lower cost, according to a new report.
Three unnamed sources told Bloomberg BusinessWeek that LightSquared is in talks with Sprint Nextel to use the mobile operators cellular sites and equipment under an arrangement that would allow LightSquared to build out its network faster and at a lower cost. In response to the report, a LightSquared spokeswoman told vision2mobile the company does not comment on rumors.
Reston, Va.-based LightSquared announced yesterday that it closed on $586 million of debt financing led by UBS AG and JP Morgan, bringing to more than $2 billion the total debt and equity the company has raised over the last seven months.
LightSquared is building out a wireless fourth-generation broadband network based on LTE (Long Term Evolution) technology and plans to sell wholesale services to cellular providers and other companies that want to directly market mobile offerings to end users. Last November LightSquared deployed a satellite over North America that will enable mobile users to obtain coverage when they are out of cellular range.
Our investors share our belief that now is the time for a wholesale model to succeed ,” LightSquared Chairman and CEO Sanjiv Ahuja said in a statement Tuesday.
But LightSquared faces a potential problem in Washington, D.C. Foxnews.com reports that the Federal Communications Commission is investigating concerns the agency has received that the companys network signal transmitters overpower and jam GPS signals within several miles.
A former FCC official said that 911 response systems, numerous navigation systems, air-traffic control towers and ship navigation all rely on GPS, but the official Dale Hatfield, former chief of the FCCs Office of Engineering and Technology said it is too early to discern whether LightSquareds transmitters are causing interference until further testing is conducted.
Unlike Sprints partner Clearwire which offers mobile services directly to customers as well as through wholesale relationships with Comcast, Sprint and Time Warner Cable LightSquared will not compete directly with U.S. mobile operators.
Instead, the company will sell its wireless services only a wholesale basis, enabling other companies to directly serve end users. The company has disclosed reaching agreements with five customers, including two carriers, a national retailer, a device manufacturer and a website, Bloomberg reported.
The company states on its website that its network will initially operate only in the United States, although mobile users will be able to roam internationally.
LightSquared anticipates that its wholesale partners will begin to launch mobile services during the second half of the year.
The company states its network will cover at least 100 million Americans by the end of 2012 and 260 million people by 2015.