Wednesday, July 21, 2010
Associated Press
NEW YORK
U.S. consumers and businesses may get more options in wireless service starting next year with the launch of a new wireless broadband network that aims to provide competition to the incumbent phone companies.
Private-equity firm Harbinger Capital Partners on Tuesday revealed details of the launch of its wireless network, LightSquared, which should cover 92 percent of the population by 2015.
But there are financial and regulatory hurdles to overcome. And in another wrinkle, LightSquared initially won’t be offering conventional cell-phone service, just data. It’s possible to send phone calls over data connections, but that technology is not fully mature or standardized.
Still, LightSquared represents a rare new entrant in the wireless market. Only two other companies, Verizon Wireless and AT&T Inc., have firm plans to build nationwide networks using the same, fourth- generation network technology that LightSquared will use. Sprint Nextel Corp., through its Clearwire Corp. subsidiary, is building a third one with a different 4G technology that’s likely to get less support from equipment makers.
Consumers won’t buy service directly from LightSquared. Instead, it will sell access wholesale to other companies that can resell it to consumers. LightSquared hopes to attract cable-TV providers, phone companies that don’t have wireless networks of their own and retailers that want to provide wireless service under their own brand.
LightSquared plans to start providing service in the second half of 2011 in Las Vegas, Phoenix, Denver and Baltimore.
LightSquared said Nokia Siemens Networks will build, maintain and operate the network under a $7 billion, eight-year contract. Nokia Siemens is a joint venture of Finland’s Nokia Corp. and Siemens AG of Germany.
The contract is an important step for Nokia Siemens, which hasn’t had much of a presence in the U.S. market for wireless equipment.
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