LightSquared Building Own Wireless Network
Philip Falcone owned LightSquared Inc. venture is closing in on a loan worth $585 million to build its own wireless network. It is currently in the negotiation stages for a wholesale deal with a nationwide carrier to build its network.
An official announcement is expected as soon as today and financial institutions such as JPMorgan Chase (NYSE:JPM) and UBS AG (NYSE:UBS) will bring the cash on hand with LightSquared to about $1 billion. LightSquared currently has about $1.75 billion in equity and debt.
LightSquared Inc. announced this week that it currently has undergoing agreements with five customers who are potential companies for the upcoming wholesale fourth generation service. The five customers include a national retailer, two carriers, a website and a national retailer.
LightSquared id seeking to compete with national carriers such as Verizon Wireless (NYSE:VZ), AT&T Inc. (NYSE:T) and Clearwire Corp. (NASDAQ:CLWR) to sell 4G capacitates to networks that are looking to upgrade to the newer version. It will be offering space on its networks to consumer electronics makers, computer manufacturers and retailers. This will allow companies such as Sony Corp and Apple to sell their own wireless service along with the existing network provider.
In an order by the Under a Federal Communications Commission, LightSqaured will have to build a network that expands up to 100 million United States residents before the end of the next year. This has to further expand to 260 million American residents by 2016. The new funds will add on to the already obtained $850 million that UBS has provided to the Virginia based company.
In a recent waiver received last month from FCC, LightSquared Inc was lifted the requirement for its devices to directly communicate with the satellites. This greatly expanded its potential customer base to mobile phones and tablets. FCC did lay the condition that its next generation wireless service does not interfere with GPS and other services, for which it will have to work with the global-positioning systems’s working group.
LightSquared is also in the process of preparing itself to bid for satellite companies such as DBSD North America Inc., and TerreStar Corp. (PINK:TSTRQ).
Both spokespersons at UBS and JP Morgan declined to comment. The LightSquared spokesperson just confirmed the earlier mentioned reports, without divulging any details.
Network trails are set to begin this year in Las Vegas by LightSqaured, followed with Baltimore, Phoenix and Denver. LightSquared is backed by Harbinger Capital Partners hedge fund belonging to Falcone. It has already completed tests in a lab in Dallas.
