Nokia Siemens added to SkyTerra deal
Harbinger Capital Partners, a New York hedge fund headed by billionaire Philip Falcone, has selected Nokia Siemens Networks in a $7 billion, eight-year deal to build and operate a planned nationwide 4G wireless network.
Harbinger unveiled the agreement Tuesday morning to coincide with its launch of LightSquared, a vast and ambitious wireless broadband venture that incorporates Reston-based satellite firm SkyTerra Communications Inc., which Harbinger acquired earlier this year. All of Skyterra's employees will now work under the LightSquared banner, including three top executives who will fill equivalent leadership roles.
LightSquared's blueprint, which involves launching two satellites and building about 40,000 terrestrial stations, is scheduled to provide high-capacity mobile broadband coverage to at least 260 million people by the end of 2015. The company envisions offering the capacity wholesale-only to retailers, cable operators, wireless service providers and other customers, who would then provide the service under their own brand.
LightSquared, which controls 59 megahertz of wireless spectrum, would offer a terrestrial-only plan, a satellite-only plan, or a combination of both, said spokesman Tom Surface.
The deal with Nokia Siemens advances what critics have framed as a wealthy hedge fund manager¹s high-wire bid to enter the wireless business. Falcone is hoping to capitalize on the nation's ballooning demand for mobile broadband capacity — fueled by the proliferation of smart phones — to operate alongside giants like Verizon and AT&T. And like those two companies, Harbinger is building the 4G network using long-term evolution (LTE) technology instead the rival format WiMAX.
The Federal Communications Commission signed off on Skyterra's acquisition in March. The company is planning to send up two satellites by 2011 to replace existing ones already in orbit, contracting with Reston-based International Launch Services to carry out the first launch at Kazakhstan's Baikonur Cosmodrome.
Initially planned for August, that launch has been delayed until late 2010 or early 2011 because of a technical issue with the Skyterra1 satellite, Surface said. He said that delay wouldn't affect the overall time line for the wireless network rollout, which is scheduled to open next year in two trials markets: Denver and Phoenix.
Harbinger also announced $1.75 billion in new debt and equity financing for LightSquared on top of the $2.9 billion already invested by Harbinger and its affiliates.