For a mobile operator without a network or handset, LightSquared has struck a lot of deals, and been associated with some big name partners. AT&T even mentioned it as a viable mobile broadband competitor in its conference call to discuss its plans to buy T-Mobile. Why?
Things are looking up for LightSquared, the company trying to build a wholesale LTE network. It scored a $586 million loan, got a huge waiver from the FCC and some unnamed customers. Yet, its network buildout has slowed and it picked a fight with the Pentagon.
In a deal valued at $7 billion over the next eight years, LightSquared, backed by Harbinger Capital Partners, has hired Nokia Siemens Network to create a wholesale 4G wireless network on its behalf using satellite and terrestrial coverage.
Palm might be on a slippery slope to nowhere, but New York hedgefund Harbinger Capital Partners, is betting on a good outcome. They have invested an undisclosed amount of money into the company and have bought 16 million shares or roughly 9.48 percent of the company.
A New York-based private equity firm’s plans to build out an open nationwide 4G wireless network may simply be a facade aimed at pumping up the value of the spectrum it indirectly owns, according to several satellite industry analysts. Will the network ever come to fruition?
AT&T today filed a petition with the FCC asking it to reconsider conditions associated with an order allowing Harbinger Capital Partners to take over a satellite company and its spectrum assets. The move is AT&T’s attempt to fight the construction of a competing 4G wireless network.
Harbinger Capital Partner’s bold plan to build out an open 4G wireless network has more moving parts than the latest OK Go video, and would require a minimum of $6 billion to build. I’m skeptical that a competitive LTE network will come out of the plan.
A New York private equity firm plans to build a multibillion-dollar wholesale 4G wireless network using the Long Term Evolution standard that will cover most of the country by 2015. The ambitious plans by Harbinger Capital partners relies on spectrum owned by several satellite companies.
Harbinger Capital today offered satellite service provider MSV/Skyterra $500 million to pay for the company’s launch of its two new satellites. The private equity firm also made clear it’s planning to push for a deal to acquire British satellite company Inmarsat. The acquisition attempt isn’t welcomed by Inmarsat, but Harbinger owns 28.8 percent of its stock, which means Inmarsat will have a tough time keeping Harbinger and the Skyterra deal at bay.
We started to anticipate such mergers back in March after looking at the number of players trying to make it in the difficult satellite services business, as well as the likelihood of U.S. regulators approving the Sirius-XM merger, which took another step further yesterday. Harbinger is apparently confident that the FCC will look favorably on its attempt to provide a 4G satellite and terrestrial network, too.
The combination of Skyterra and Inmarsat makes sense because they both own complimentary spectrum and satellites that work in the L band. According to the Skyterra press release, regulatory approvals for any deal would take between a year to 18 months to complete, which means the $500 million in cash is needed to keep the company — and its birds — afloat in the meantime.
Harbinger could be eyeing other deals as well. The firm has a large ownership stake in TerreStar, which owns spectrum in the same band owned by EchoStar. TerreStar is leasing spectrum from Echostar are already sharing spectrum, so closer ties between those two are likely coming.
photo from NASA
Last Friday, four executives of satellite holding company TerreStar Networks suddenly resigned, leaving just three people behind to fill the void. I don’t expect this lack of management to last for too long, but until TerreStar calls me back with details, I’m betting that the change in management signals a change in TerreStar’s strategy in that it’s no longer looking for a larger partner to help it build and finance a combined 4G satellite and terrestrial network, but is preparing to move ahead alone.
TerreStar is the new name of a former pager company called Motient. In 2004 Motient scored the regulatory jackpot when, despite protests from the cellular carriers, the Federal Communications Commission approved plans for an ancillary terrestrial component (ATC) network. Since then, it has found itself tangled up in a web of financial transactions designed to maximize the value of its two bands of satellite spectrum.