The proposed nationwide satellite LTE network being funded by Harbinger Capital Partners could get a lift from rumored interest from T-Mobile USA in becoming a wholesale customer of the alternative 4G network. Harbinger revealed its plans last month and more recently recruited former Orange CEO Sanjiv Ahuja to head its operations. The idea behind the Harbinger network is to rapidly build out a 4G network that would be largely wholesale in nature, serving other mobile operators needing 4G network capacity, rather than delivering mobile data services directly to end customers. For T-Mobile, the Harbinger news follows similar rumors that it might tap Clearwire’s 4G Wimax-based network in much the same way.
Connected Planet’s take,
Kevin Fitchard:
It might sound cut and dry, but for a major consumer operator to team up with Harbinger and its satellite operators isn’t as simple as it sounds. SkyTerra and Terrestar don’t have typical wireless licenses; they own satellite spectrum. New FCC rules allow them to build something called an ancillary terrestrial component (ATC), basically an earthbound broadband wireless network to complement their satellite coverage in denser areas. As we’ve pointed out before, any partner these companies recruit isn’t just signing up for an LTE network, but a combo satellite-LTE broadband network.
That’s important because such a combination isn’t the most efficient way to offer a consumer 4G service, particular in the urban markets T-Mobile focuses on. AT&T has signed a deal with Terrestar to offer just such a ubiquitous service, but it’s by no means a component of its primary 3G or future 4G service. Phones with dual-mode satellite 3G are starting at $800 top $900. So long as satellite service must be a component of the SkyTerra or Terrestar’s network, a nationwide mobile operator can’t feasibly use it as its primary mobile broadband network.
That said, the FCC is obviously willing to re-evaluate the ATC rules. In the new National Broadband Plan, the FCC identified the satellite bands as key spectrum for mobile broadband deployment, which implies the FCC may be willing to ease up the rules that govern them. If the FCC lets Harbinger simply deploy a national LTE network with no restrictions, you can bet AT&T and Verizon Wireless are going to go ape, but that most certainly would clear the way for T-Mobile to get a 4G network. The Financial Times story indicates that T-Mobile is looking to buy wholesale access to the network, but my bet is it’s probably more willing to lease wholesale access to the band and build its own network so it won’t have to share it with anyone else. Open Range Communications is doing something similar with Globalstar’s ATC spectrum for WiMax in rural areas. Another option is for T-Mobile’s parent, Deutsche Telekom, to become a primary investor in SkyTerra, just as Sprint is the primary investor in Clearwire.
That’s our take on this. Let us know what you think in the comments section below:
Kevin,
You state in the article that the phones that will be used with the SkyTerra network will be dual-mode. That is incorrect. The whole point of the architecture of the space component of the system is to allow both satellite and terrestrial communications with the same radio. This is achieved by using a very large antenna on the satellite that provides adequate gain. Additionally, I’m not really sure how you define “efficient” but the SkyTerra architecture will cover a significant portion of the population about 90 days after launch. The only places that will not be well covered are the same places that satellite radio has trouble: near tall buildings and such.
The FCC went through their standard routine in assigning the spectrum and the associated rules to Harbinger. ATT and Verizon had every opportunity to be involved in the process. Either they didn’t care or were not paying attention. Either is absurd. It’s too late to cry about it now. Frankly, I’m relieved. I was stunned when I heard that ATT was working on a 4G network when their 3G is still so inadequate. Perhaps the threat of competition from someone besides the other lousy service providers will prompt them to stop throwing spare change at their network and get down to business. I’m rooting for Harbinger in this one.