Lightsquared near $2B/year deal with Sprint

[bigsnake49]

(Reuters) - Sprint Nextel Corp (S.N) is close to completing a $2 billion-a-year network sharing agreement with hedge fund billionaire Phil Falcone's LightSquared [MOSAV.UL] telecommunications venture, sources familiar with the matter said on Wednesday.

Under the proposed agreement, LightSquared would pay $2 billion a year to rent space on Sprint's network to launch its own high-speed wireless services, according to a person who asked not to be named because the details are not yet public.

The eight-year contract would allow LightSquared, a start-up backed by Falcone's Harbinger Capital Partners, to use Sprint's network equipment on 40,000 cellular broadcast towers along with its own wireless airwaves, to launch its own high-speed service.

http://www.reuters.com/article/2011/...sSector&rpc=43

Of course the critical question is where Lightsquared is going to find $2B/year?

[503ducati]

Report: LightSquared to buy LTE network capacity from AT&T

Read more: Report: LightSquared to buy LTE network capacity from AT&T - FierceWireless http://www.fiercewireless.com/story/...#ixzz1O33btOkP
Subscribe: http://www.fiercewireless.com/signup...FierceWireless

[503ducati]

(Reuters) - Sprint Nextel Corp (S.N) is close to completing a $2 billion-a-year network sharing agreement with hedge fund billionaire Phil Falcone's LightSquared [MOSAV.UL] telecommunications venture, sources familiar with the matter said on Wednesday.

Under the proposed agreement, LightSquared would pay $2 billion a year to rent space on Sprint's network to launch its own high-speed wireless services, according to a person who asked not to be named because the details are not yet public.

The eight-year contract would allow LightSquared, a start-up backed by Falcone's Harbinger Capital Partners, to use Sprint's network equipment on 40,000 cellular broadcast towers along with its own wireless airwaves, to launch its own high-speed service.

http://www.reuters.com/article/2011/...sSector&rpc=43

Of course the critical question is where Lightsquared is going to find $2B/year?

Sounds like a positive move for Sprint.

[Evan702]

Of course, LightSquared has to get past little niggling (alleged) issues like this: http://www.bloomberg.com/news/2011-0...tml?cmpid=yhoo

[Protagonist]

If LightSquared can come up with the $ and if Sprint can give them what they need without further reducing data speeds this will be a real boost to funding Sprint's network improvements over the next few years.

[bigsnake49]

Of course, LightSquared has to get past little niggling (alleged) issues like this: http://www.bloomberg.com/news/2011-0...tml?cmpid=yhoo

The problem is not Lightsquared's. It's the GPS receivers' lack of any ability to block Lightsquared signals. They counted on the fact that Lightsquared's satellite signals were too weak to interfere with the GPS signal and did not design strong enough filters. Now that Lightsquared wants to use a stronger signal, all these people are caught flatfooted and of course they go crying to the FCC. It's their own fault, but now they are complaining to the FCC. The solution is that Lightsquared's basestations must incorporate steep filters to protect GPS receivers from their own shortcomings and possibly not use a part of the spectrum adjacent to the GPS spectrum. If I was Lightsquared I would ask for compensation for the additional expense of installing these steep filters and possibly for the loss of use of some of their spectrum. Of course the next generation of GPS receivers will incorporate much better filters and probably cost a little bit more.

[bigsnake49]

For a really good discussion on the GPS interference issues and the potential fixes and costs read this blog by noted expert Tim Farrar:

http://tmfassociates.com/blog/2011/0...ence-problems/

[CA]

The problem is not Lightsquared's. It's the GPS receivers' lack of any ability to block Lightsquared signals. They counted on the fact that Lightsquared's satellite signals were too weak to interfere with the GPS signal and did not design strong enough filters. Now that Lightsquared wants to use a stronger signal, all these people are caught flatfooted and of course they go crying to the FCC. It's their own fault, but now they are complaining to the FCC. The solution is that Lightsquared's basestations must incorporate steep filters to protect GPS receivers from their own shortcomings and possibly not use a part of the spectrum adjacent to the GPS spectrum. If I was Lightsquared I would ask for compensation for the additional expense of installing these steep filters and possibly for the loss of use of some of their spectrum. Of course the next generation of GPS receivers will incorporate much better filters and probably cost a little bit more.

I believe they are less than 10 bucks now, so whoop-de-do!

[503ducati]

(Reuters) - Sprint Nextel Corp (S.N) is close to completing a $2 billion-a-year network sharing agreement with hedge fund billionaire Phil Falcone's LightSquared [MOSAV.UL] telecommunications venture, sources familiar with the matter said on Wednesday.

Under the proposed agreement, LightSquared would pay $2 billion a year to rent space on Sprint's network to launch its own high-speed wireless services, according to a person who asked not to be named because the details are not yet public.

The eight-year contract would allow LightSquared, a start-up backed by Falcone's Harbinger Capital Partners, to use Sprint's network equipment on 40,000 cellular broadcast towers along with its own wireless airwaves, to launch its own high-speed service.

http://www.reuters.com/article/2011/...sSector&rpc=43

Of course the critical question is where Lightsquared is going to find $2B/year?

Apparently now it's changed?

Sprint Said to Be Close to $20 Billion LightSquared Accord

June 02, 2011, 4:27 PM EDT

By Greg Bensinger
(Updates share price in penultimate paragraph.)

June 2 (Bloomberg) -- Billionaire Philip Falcone’s LightSquared Inc. is close to a deal to pay Sprint Nextel Corp. as much as $20 billion as part of a network construction and sharing accord, said two people familiar with the talks.

The tentative agreement, spanning 15 years, would allow Falcone to roll out LightSquared more quickly and let the companies share network-building costs, said the people, who declined to be identified because the discussions aren’t public.

Sprint has pledged $5 billion to upgrade its network over the next three to five years to allow it to use disparate bands of spectrum on a single base station. Chief Executive Officer Dan Hesse said in May he had held talks with Clearwire Corp. about possibly hosting its network on Sprint’s infrastructure.

LightSquared agreed last year to Federal Communications Commission conditions that it offer service to as many as 100 million Americans by the end of next year and 260 million by 2016. The company is on schedule to introduce commercial service by early next year, Jeff Carlisle, regulatory affairs executive vice president, said on a conference call yesterday.

Sprint would receive as much as $2 billion annually from LightSquared in the first stages of the contract to help pay for the network equipment and construction costs, said one of the people. Payments thereafter would vary annually based on the number of users on the LightSquared network and usage patterns, said the person. The full value of the contract will depend on those payments.

Audrey Schaefer, a LightSquared spokeswoman, and Bill White, a spokesman for Overland Park, Kansas-based Sprint, declined to comment.

AT&T Talks

A deal between the companies may also give Sprint access to LightSquared’s spare network capacity, allowing it to save $240 million in annual costs, Jonathan Chaplin, a Credit Suisse Group AG analyst, said in a May 24 research note. He said the deal would be worth $1.2 billion a year in recurring revenue for Sprint.

LightSquared, based in Reston, Virginia, would need to raise an additional $3 billion to fully fund its buildout plan, on top of the $1 billion it has on hand, Chaplin said.

The company has also held talks with AT&T Inc. over a deal to buy network capacity from the carrier, two people with knowledge of the discussions said this week.

Sprint added 10 cents, or 1.7 percent, to $5.93 at 4 p.m. in New York Stock Exchange composite trading, for its highest value since October 2008. The shares have gained 40 percent this year.

LightSquared is backed by Falcone’s Harbinger Capital Partners hedge fund, based in New York.

--Editors: Ville Heiskanen, Peter Elstrom

To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

http://www.businessweek.com/news/201...ed-accord.html

[bigsnake49]

Of course Lightsquared has to find the funds first. They have buildout requirements that they have to meet: 100 Million by the end of 2012 and 260Million by the end of 2016.

[Eric The Viking]

If they can jump on sprints byildiut they don't have to worry about it as much

Sent from my Nexus S 4G using Tapatalk

[offthegrid]

LightSquared received a conditional waiver to use the frequencies on towers as opposed to from the sats.

The waiver is dependent on showing that they do not interfere with gps signals using their filters. The burden lies with LightSquared to make this work not the gps industry. Hence the term 'conditional'.

The problem is not Lightsquared's. It's the GPS receivers' lack of any ability to block Lightsquared signals. They counted on the fact that Lightsquared's satellite signals were too weak to interfere with the GPS signal and did not design strong enough filters. Now that Lightsquared wants to use a stronger signal, all these people are caught flatfooted and of course they go crying to the FCC. It's their own fault, but now they are complaining to the FCC. The solution is that Lightsquared's basestations must incorporate steep filters to protect GPS receivers from their own shortcomings and possibly not use a part of the spectrum adjacent to the GPS spectrum. If I was Lightsquared I would ask for compensation for the additional expense of installing these steep filters and possibly for the loss of use of some of their spectrum. Of course the next generation of GPS receivers will incorporate much better filters and probably cost a little bit more.

[bigsnake49]

LightSquared received a conditional waiver to use the frequencies on towers as opposed to from the sats.

The waiver is dependent on showing that they do not interfere with gps signals using their filters. The burden lies with LightSquared to make this work not the gps industry. Hence the term 'conditional'.

"As I have stated previously to Congress, the commission will not permit LightSquared to begin commercial service without first resolving the commission's concerns about potential widespread harmful interference to GPS devices," Genachowski wrote. "Under no circumstances would I put at risk our nation's national defense or public safety."
Like LightSquared has been doing, Genachowski clarified that the commission's waiver it granted to LightSquared in January "was not the trigger to permit LightSquared access to the spectrum in the band adjacent to GPS." He reiterated that LightSquared's predecessors have had access to the band since 1995 and have been authorized to provide terrestrial service since 2004. The order, he said, allowed LightSquared and its wholesale customers to offer terrestrial-only devices rather than having to incorporate both satellite and terrestrial services, which adds cost to devices.
Moreover, Genachowski took a shot at the GPS community: "It should be no surprise to anyone involved in the LightSquared matter that the company was planning for some time to deploy a major terrestrial network in the spectrum adjacent to GPS," he wrote. He noted several FCC orders, including a March 2010 order that allowed Harbinger to control Skyterra (now LightSquared) in which Harbinger explained its plans to construct a network that would cover 90 percent of the U.S. And Genachowski noted that the GPS industry actively participated in proceedings as early as July 2009. In fact, the U.S. GPS Industry Council filed a joint letter with Skyterra agreeing that the GPS interference had been resolved.
"In fact, after the GPS Industry Council withdrew their initial concerns, no one raised any objections to the proceedings relative to GPS interference until after the two March orders were adopted and released," Genachowski wrote.


Read more: FCC's Genachowski: We won't let LightSquared operate without GPS interference resolution - FierceBroadbandWireless http://www.fiercebroadbandwireless.c...#ixzz1OhWST8GO

As you can see, the GPS industry has known since 2004 that there will be a terrestrial component on that band. They have had 7 years to do something about it. They did not!

According to the FCC, a device must not generate interference itself and must accept all interference and still be able to work. Technically, that mean that a device must employ both high pass and low pass filters at the low and highend of its band so that it does not generate interference at adjacent bands and it does not let interference from adjacent bands interfere with it. Now of course we know that you cannot totally eliminate interference to adjacent bands, since no matter how hard you try, some of it will leak through. In the past the GPS industry only had to deal with the satellite component, which by the time it reaches earth is pretty weak and causes minimal interference. Actually, the GPS signal causes more interference with the satellite signal than the other way around. Now with the terrestrial component, the signal is pretty strong and even with the steep filters that Lightsquared put on their basestations will still cause some interference because most GPS devices were not not designed with the terrestrial component in mind, even though they knew since 2004 that it was coming.

I also fault the FCC and its subcontractor labs with not testing GPS devices at the increased output of a terrestrial basestation.

Lightsquared has not done anything wrong. They have played by the rules, but will end up paying for things that are not their fault.

[monkeyboy]

Lightsquared has not done anything wrong. They have played by the rules, but will end up paying for things that are not their fault.

It has nothing to do with "fault". Its like buying waterfront property then being surprised that you have to comply with water erosion laws and its huge attendant costs. All of this goes with the territory, with the particular piece of spectrum in question and Lightsquared and everybody knew about it from the get go...

[bigsnake49]

Another voice of reason in the wilderness:

http://www.marcus-spectrum.com/Blog/...10900-213.html