News late last week that Harbinger Capital Partners, a private equity firm, has filed plans with the FCC to build a nationwide LTE network by 2015 that will use spectrum owned by several satellite companies. The idea would be to create an open wholesale network that could be resold by anyone wanting to offer 4G services to their customers, such as retailers or laptop/device manufacturers. The plan is to launch the network before the end of 2011, with initial trials set for Denver and Phoenix, with plans to cover 100 million potential users with the network by the end of 2012 (and 260 million by 2015)
Gigaom dug up details from the FCC filing, including:
At the outset, the network will have no less than 23 MHz of spectrum, consisting of 8 MHz of 1.4 GHz terrestrial spectrum, access to 5 MHz of 1.6 GHz terrestrial spectrum and 10 MHz of MSS/ATC L-band spectrum. Through a cooperation agreement with Inmarsat and associated waivers of the Commission’s ATC rules, by 2013 Harbinger will have access to an additional 30 MHz of ATC spectrum.
Connected Planet’s take, Kevin Fitchard:
Harbinger is clearly trying to bring the plans of its two satellite investments, SkyTerra and Terrestar, into synch. Terrestar has already announced a 3G and 4G rollout strategy that mirrors the one Harbinger plans for SkyTerra: satellite communications augmented with LTE in urban areas. Unlike Terrestar, which plans to build its terrestrial network out on a piecemeal basis as it finds wholesale customers in particular geographies, SkyTerra seems to be looking for additional partners to fund what could be a multi-billion-dollar 4G build, encompassing 36,000 base stations.
My guess is that Harbinger is open to either possibility. If a big investor like Intel comes along (though given Intel’s investment in Clearwire and WiMax it might not be the most likely LTE investor), Harbinger could deploy a good chunk of network in one go. But I’m sure Harbinger would be just as open to a deal like fellow satellite broadband provider Globalstar struck with Open Range Communications, which allows the latter to use the former’s satellite spectrum to build its rural WiMax network.
As for whether SkyTerra can emerge as a 4G challenger to the major operators, I find that a bit far-fetched. Though Qualcomm is making dual-mode satellite chipsets, satellite phones or data cards will carry hefty price tags. The phone Terrestar is supplying for AT&T is in the $800 to $900 range. And a satellite provider just can’t use its spectrum to provide a terrestrial broadband service — there must be a satellite component. I can definitely see such a service carving a niche for itself in certain enterprise and government segments, where universal geographic coverage will be huge selling point, or in rural broadband access. But I doubt there is any way these networks can be used for a straight-up consumer 4G service competing with Clearwire, AT&T and Verizon Wireless.
That’s our take on this. Let us know what you think in the comments section below:
I like the service that I receive.
Kevin,
Harbinhgers new satelite LTE service offer appears to have some parallels to the original Iridium satellite project taken on by Motorola and select partners in the early 1990s. The mission and goal was to further penetrate the rural andGlobal trotting C level users with ubigious mobile voice services via satellite. Iridium as you know turned into a difficult lesson in mobile communication economics. As long as terrestrial based carriers/providers can deliver LTE in a time and cost efficient manner which I beleive they will. Satellite delivery of LTE servicves may proove another difficult economic model and service proposition I hope they proove me wrong this time.
Regards,
Ted Kern
Strategic Partner
Schooley Mitchell Telecom Consultants
207-807-2727
I’m sorry, but Mr. Falcone is going to be a few billion lighter in the pocket when all is said and done.
The only folks that could pony up real money for this play would be AT&T or Verizon, and the satellite component (as well as the fact that ATC spectrum was gifted rather than auctioned) will keep them away. If you can’t send a guy in a truck to fix it, and it would require a rocket ship for ATC, they will stay away.
Wall St. Guy
This is an interesting tech venture poised to potentially generate a great deal of revenue. The technology strategy and the business model seem to be cogent ones, however it is to note that there will be tough competition with terrestrial wireless network which are already established in selling LTE and 4G with big revenues. So those satellite initiatives might be better of targeting other areas where such challenges are diminished.