The Dude abides — The Big Lebowski
LightSquared and Sprint Nextel today announced a joint 15-year agreement that includes spectrum hosting and network services, for 4G wholesale and 3G roaming.
With this agreement, LightSquared can total its 4G-LTE deployment a lot more than one year ahead of the FCC mandate to cover 260 million Americans by 2015, and Lightsquared won’t have to build and run the network. That’s Sprint’s job.
For the duration of an 11-year period, LightSquared will pay Sprint $ 9 billion in money with credits valued at about $ 4.5 billion, reports Bloomberg. Sprint can use the credits to acquire capacity from LightSquared, which plans to offer you wholesale wireless service to consumer electronics organizations and other telecommunications operators.
Other Highlights of this agreement consist of:
- A 3G nationwide roaming agreement with Sprint will enable LightSquared’s wholesale consumers to offer combined 4G/3G data services as soon as LightSquared launches its first 4G markets in 2012.
- Sprint receives approximately $ 4.5 billion in 4G-LTE and satellite purchase credits from LightSquared offering Sprint with a price-successful alternative for LTE services, if Sprint chooses to incorporate L-Band into their 4G offering.
- The 4G-LTE network will now be deployed very first in major U.S. markets in 2H 2012 and early 2013 giving LightSquared’s wholesale clients considerable selling opportunities in the largest markets for wireless broadband services.
- LightSquared is also executing plans to make LTE services available in underserved rural markets via announced offers with Open Range, Cellular South and SI Wireless.
LightSquared says they now have all of the components in place to operate an integrated 4G-LTE wireless broadband and satellite network.
LightSquared has come under fire for possible GPS interference troubles, and mentioned it would launch 4G LTE services “only when there is a comprehensive solution in location.”
LightSquared has now moved their 1.6 GHz service to a 10 MHz slice of spectrum further from GPS. They’re making use of frequencies they acquired from a joint agreement from Inmarsat. Lightsquared says it resolves the GPS interference issue for 99.5% of all commercial GPS devices. But Inmarsat might have current users on that spectrum, so when that spectrum slice can in fact be used has still not been created quite clear by either Inmarsat or Lightsquared. Not to mention the FCC.
Sprint made no mention of the Clear network. Sprint owns about half of the nationwide WiMAX network, which now covers about 130 million individuals. Sprint, an early supporter of WiMax, might now have an LTE selection on 1.6 GHz. Most observers think Sprint will soon drop the other shoe and announce LTE on their two.6 GHz spectrum, as well.
Sprint has already pledged $ five billion to upgrade its network over the next 3 to five years. Sprint’s Network Vision brings together Nextel’s 800 MHz service, Sprint’s 1.9 MHz PCS cellular service, and Clearwire’s two.6GHz 4G service on 1 tower. Lightsquared would likely be a portion of this “Network Vision” as nicely. It ought to lower Sprint’s operational costs, particularly when Nextel’s 800 MHz iDEN service moves to Sprint’s push-to-speak CDMA. Sprint’s tower density is pretty high since it relies on PCS frequencies.
An LTE switchout has often been an selection for partner Clearwire given that its inception. The incremental price for an LTE swapout isn’t considerably and dual mode (WiMAX/LTE) client support is now offered.
Venture Beat says the deal suggests Sprint will likely move broadband customers to LightSquared 4G from its current Clearwire-backed WiMax 4G. But that wouldn’t make sense. Lightsquared’s narrow 10 MHz of LTE spectrum is still in dispute over availability and interference issues and their spectrum is restricted.
Lightsquared is just another tenant on Sprint’s network. If there is a material breach of the contract, or if LightSquared faces insolvency, Sprint holds a second lien on LightSquared’s spectrum assets, reports Fierce Wireless.
Charlie Ergen’s two GHz satellite phone networks, TerreStar and ICO/DBSD, could also be a tenant for terrestrial LTE service. Ergen’s two GHz band wouldn’t have the interference issues.
Verizon’s LTE service at 700MHz utilizes two 10 MHz channels and gives much better coverage, and AT&T is piecing together a 700 MHz LTE network employing two adjoining spectrum bands to generate comparable bandwidth. Verizon’s 4G network now reaches 160 million possible consumers, pulling ahead of Clearwire’s 130 million. Clearwire reported 4.86 million total wholesale subs in the very first quarter.
The deal is not about quick speed. Lightsquared’s LTE service – if it is approved – will likely be restrained with restricted spectrum, coverage and GPS interference issues.
The service could be useful, nonetheless, for initial responders and public service agencies. Like the still-born AT&T/TerreStar phone (above), a Lightsquared/Sprint phone could provide (inexpensive) cellular service in urban areas and switch to satellite service when out of service locations.
LightSquared says it will support existing Push To Speak kit, which utilizes the 2 GHz TerreStar 1 satellite, from TerreStar (now owned by Charlie Ergen) until at least 2014, but will replace all the customer kit “at no cost”, with devices using its new bird, SkyTerra 1 on Lightsquared’s 1.6 GHz service.
Lightsquared’s terrestrial 1.6 GHz service might have more range then Sprint’s 2.6 GHz service, but not if Lightsquared has to lower its energy. Lightsquared’s LTE service seems unlikely to offer quicker speeds or less expensive rates than AT&T or Verizon.
CNET leaked in early July that an announcement would be created appropriate prior to Sprint’s second quarter earnings call on Thursday. So it is no coincidence that on Wednesday, anti-LightSquared factions released a damning report, reportedly ready by the Federal Aviation Administration, that claims LightSquared’s LTE proposal would trigger 794 deaths and more than $ 72 billion in further expenses to U.S. taxpayers.
In an effort to make satellite telephone businesses far more solvent, the FCC allowed Lightsquared to use their frequencies terrestrially. This spurred LightSquared backer Harbinger Partners to propose a nationwide terrestrial LTE network employing their “free” frequencies. Despite the fact that Lightsquared didn’t have to obtain their spectrum, they still had to create a terrestrial network.
Verizon spent nearly $ 10 billion on their 700 MHz spectrum — excluding the costs to build their network. Lightsquared’s space segment cost some thing like $ 1 billion for two high capacity satellites with ground controllers, but developing and operating a terrestrial network from scratch can cost well over $ 10 billion. At 1.6 GHz, that’s a lot of towers. Sprint already had them in location. Sprint also supplies Virtual Network Operator services for organizations like Virgin Mobile. A Sprint/Lightsquared deal seems to offer you some thing for each parties.
Sprint nonetheless owns half of Clearwire. Sprint has about twice the spectrum in the two.6GHz band then AT&T and Verizon currently use in total. Sprint is widely expected to partition off part some of that spectrum and provide LTE. But what flavor of LTE?
Clearwire’s “LTE 2X” trials in Phoenix use paired, 20×20 MHz blocks, twice the size Verizon’s LTE. But the economies of scale developing about TD-LTE might be compelling for Sprint. Operators going with TD-LTE include China Mobile, Vivid Wireless in Australia, Yota, in Russia, Global Mobile in Taiwan and Packet 1 in Malaysia. India and China will most likely be dominated by TD-LTE, so equipment will soon be commoditized.
Separately, Sprint reported a second quarter loss of $ 847 million, or 28 cents a share, on revenue of $ 8.three billion. Sprint added 1.1 million net wireless subscribers, but the bulk of them were prepaid. Sprint ended the quarter with 52 million consumers. Overall, Sprint still wound up losing 101,000 net postpaid subscribers. Sprint shares had been down roughly 18% to $ 4.25, reports Marketplace Watch. The stock has lost a lot more than 1-quarter of its value over the past two months.
The Lightsquared satellite was often some thing of a Trojan Horse for Harbinger. Neither Sprint’s two.6 GHz LTE/WiMAX method nor TerreStar’s anticipated two GHz LTE method pose any GPS interference difficulty. But without terrestrial use of 1.6 GHz, Lightsquared’s $ 300 million satellite platform looks like a white elephant.
Ancillary Terrestrial Component tied the entire thing together. Without FCC authorization for ATC, the suitcase of money Lightsquared promised Sprint might be an illusion.
Related DailyWireless Space and Satellite News includes Sprint to Announce LTE Plans July 28?, WiMAX to TD-LTE: Everybody’s Doin’ It, Will Sprint Go TD-LTE?, LightSquared Report Card: “F”, Lightsquared Files Official FCC Report , Lightsquared: Strategy “B”, Lightsquared: Lawmakers Skeptical, Lightsquared + Sprint Deal Accomplished?, Speculation on Sprint Infrastructure, LG Telecom: CDMA & LTE Handover, Ergen Likely Got TerreStar, Charlie Ergen’s Spectacular Triple Play, Lightsquared Gets two-week Extension, Ergen Likely Got TerreStar, Harbinger: 59MHz or What?. Time Warner Cable + Lightstream?, Lightsquared Signs Cricket Wireless, One more Rumor: Lightsquared + Sprint?, Lightsquared + Sprint?, Charlie’s Massive Play, LTE Spectrum: It’s War, Lightsquared: What GPS Interference?,
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