Harbinger of something

26 July 2010 By Robert Cyran Follow @rob_cyran

Philip Falcone s hedge fund is taking a multibillion dollar punt on a new U.S. wireless network. History suggests one of two outcomes: spectacular success or abject failure. Buying precious spectrum on the cheap was a coup. Developing it will be harder.

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LightSquared, a nationwide nextgeneration wireless network backed by Harbinger Capital, said on July 20 it had signed a $7 billion contract with Nokia Siemens Networks to design, manufacture, install and run the system.

The network will consist of about 40,000 base stations combined with satellite coverage. LightSquared will sell its services only on a wholesale basis.

Harbinger has already contributed $2.9 billion of assets. LightSquared has secured $1.75 billion of additional debt and equity.

The Federal Communications Commission has required the company to cover 100 million of the U.S. population by the end of 2012 and at least 260 million by the end of 2015. Additionally, for competition reasons neither AT&T nor Verizon Wireless can buy any of LightSquared's spectrum nor lease more than 25 percent of its capacity in any year.

LightSquared release

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The network will consist of about 40,000 base stations combined with satellite coverage. LightSquared will sell its services only on a wholesale basis.

Harbinger has already contributed $2.9 billion of assets. LightSquared has secured $1.75 billion of additional debt and equity.

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