LightSquared: Our LTE Network Will Be Better Than AT&T's and Verizon's


While it's easy to get overwhelmed by the criticism of LightSquared -- concerns range from the company's possible interference with GPS to its funding issues to its business model -- the company continues to believe it will be successful. And not only that, but LightSquared also predicts that its LTE network will be better than the LTE networks currently being built out by AT&T (NYS: T) and Verizon (NYS: VZ) .

During a meeting at the recent CTIA Enterprise and Applications show in San Diego, LightSquared Chief Marketing Officer Frank Boulben laid out the company's plans -- both past and future. And in listening to Boulben's pitch, I think I now understand why LightSquared has been able to sign agreements with a wide range of customers, from Leap Wireless (NAS: LEAP) to Aircado, while LightSquared's main rival, Clearwire (NAS: CLWR) , seems completely stalled.

Specifically, Boulben explained that LightSquared's new buildout plan relies heavily on Sprint Nextel's (NYS: S) Network Vision network modernization plan -- meaning LightSquared's signal will be transmitted by Sprint's towers but LightSquared will maintain its own independent core network. He said LightSquared plans to launch commercial service in an unspecified number of major markets in the second half of next year and that its network will cover Sprint's entire current 3G network footprint by 2014.

Boulben said LightSquared's network will use 10x10 MHz channels for LTE -- the same configuration that Verizon uses for its LTE network (and AT&T does in most of its LTE markets). Verizon and AT&T promise LTE download speeds of 5 to 12 Mbps.

"We will be able to be competitive with the [LTE] speeds provided by Verizon and AT&T," Boulben predicted.

Moreover, Boulben said LightSquared's network will run in the 1600 MHz band, which he said will result in better in-building coverage than AT&T and Verizon can provide because LightSquared's signal will ride inside Sprint's network. Boulben said that since Sprint's network was designed for the 1900 MHz band, the towers are closer together than if it had been designed for the 1600 MHz band. By overlaying a network in the 1600 MHz band on a network designed and spaced for the 1900 MHz band, LightSquared can offer better in-building penetration, Boulben argued.

As for the satellite component of LightSquared's offering, Boulben said the company recently successfully tested a satellite call using the company's newly launched satellite. He said LightSquared's satellite service will complement its terrestrial network by providing service anywhere in the nation, including remote backcountry areas. But Boulben cautioned that LightSquared's satellite service will provide only voice and text coverage and will not provide the kind of high-speed data services for users who live near its terrestrial LTE network.

As for devices, Boulben said LightSquared's customers will be able to buy either terrestrial-only service or a combination of terrestrial service and satellite service. LightSquared customers will be able to obtain devices (smartphones or tablets supporting either terrestrial or a combination of terrestrial and satellite) from LightSquared's new device partner, Sharp. LightSquared said the addition of satellite support to devices won't result in much extra device cost since the service can use existing cell-phone antennas and LightSquared has already paid Qualcomm (NAS: QCOM) for the necessary chipset integration.

However, Boulben acknowledged that handset vendor Sharp would have to support a range of frequencies in its devices. For example, Leap probably would want its own CDMA spectrum bands supported, whereas other customers wouldn't necessarily need Leap's bands in their devices.

"It's very easy to accommodate multiple bands," said Boulben, explaining that Qualcomm's chips could accomplish the task.

However, Moto Oishi, vice president and general manager of Sharp's wireless business in the United States, said the company would need a minimum purchase order before it would build such devices. He declined to say what that minimum purchase order would be, or when Sharp plans to release LightSquared-capable gadgets.

Interestingly, Boulben said LightSquared's new plan with Sprint replaces the company's previous $7 billion greenfield buildout plans with network vendor Nokia Siemens Networks. Boulben said that before inking its agreement with Sprint, LightSquared had already begun obtaining cell sites in its trial markets of Las Vegas, Phoenix, Baltimore, and Denver and had purchased an initial batch of NSN base stations. Boulben said LightSquared hadn't yet installed the base stations before canceling its contract with NSN, and he said the company plans to use those base stations at some point in the future to install LightSquared LTE service in locations where Sprint does not offer coverage.

Boulben said the cancellation of LightSquared's contract with NSN will have "no substantial [financial] impact on LightSquared," though he didn't provide details.

As LightSquared moves into its wholesale LTE business next year, the company is offering customers the option of nationwide 3G CDMA service through its deal with Sprint. But Boulben said the 3G service option is available only to LightSquared's non-cellular wholesale customers like netTalk and EarthComm. LightSquared cellular customers such as C Spire Wireless and Leap Wireless won't have an option through their agreement with LightSquared to offer Sprint-powered 3G CDMA roaming.

Of course, there is much hanging over LightSquared. Foremost among the company's problems are concerns that its network will interfere with GPS receivers. The FCC has scheduled more testing of the issue, and LightSquared has offered technical fixes to the problem for GPS companies. Still, the issue has legs and doesn't appear to be going away anytime soon. Moreover, LightSquared will need a serious amount of cash to launch and maintain its service. And even if the company gets those issues ironed out, there is no guarantee that its wholesale business model will be successful. After all, what's to stop Verizon, AT&T, and Sprint from offering their own LTE services through an MVNO model, thereby potentially negating the need for a wholesale player?

It's clearly a troubled space, but the details of LightSquared's service show that at least some of the company's strategy is starting to come together.

This article originally published here. Get your wireless industry briefing here.

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