LightSquared, Best Buy ink MVNO deal
ORLANDO, Fla.--LightSquared said it signed a wholesale deal with Best Buy to have the retailer's Best Buy Connect service ride on its LTE network, bringing together another piece of LightSquared's customer puzzle. The announcement comes a day after the company inked an LTE roaming deal with Cricket provider Leap Wireless (NASDAQ:LEAP).
LightSquared CEO Sanjiv Ahuja used his keynote address here at the CTIA Wireless 2011 trade show to both announce the deal and re-pitch the concept of LightSquared to a wider industry audience. Ahuja said that Best Buy will begin trials on LightSquared's network in the first quarter of 2012.
Best Buy signed a deal with Clearwire (NASDAQ:CLWR) last year to provide MVNO service on Clearwire's mobile WiMAX network. The service is supposed to launch this year. A Best Buy spokeswoman, Paula Baldwin, confirmed that the company is committed to launching Clearwire's service this year.
Ahuja positioned LightSquared as a disruptive force akin to Netflix or Amazon.com. He said it would "deliver much needed capacity." "We are now faced with network capacity constraint that will limit users' ability to receive fast and reliable mobile Internet access," he said.
LightSquared has an aggressive buildout timetable. The company is committed to cover 100 million POPs by the end of 2012, 145 million by the end of 2013 and 260 million by the end of 2015. "We are not only committed to meeting these milestones, we are today positioned to exceed them," Ahuja said. He also seemed to be pledging LightSquared to long-haul commitments, and said the company will spend $14 billion on deploying and operating its network over the next eight years.
Still, LightSquared's plans are not without complications. The company is still facing pressure on GPS interference concerns. Earlier this month, a new coalition, called the "Coalition to Save Our GPS," came out against LightSquared and said that the company's network poses a "serious threat" to GPS. The group includes Caterpillar, GPS makers Trimble Navigation Ltd. and Garmin Ltd., and the Air Transport Association, with members including Delta Airlines and American Airlines.
The GPS community has said that LightSquared's L-band spectrum, in the 1.5-1.6 GHz band, is too close to GPS spectrum, and that the company's cell sites will cause harmful interference. As a condition of the waiver the FCC granted LightSquared in late January, the company must resolve GPS interference issues before turning on its commercial service. The company formed a working group in February with the United States Global Positioning System Industry Council to study the interference issues. LightSquared has to report to the FCC regularly about its progress and a final report is due in June.
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