Deutsche Telekom is mulling a partnership with US hedge fund Harbinger Capital over its ambitious plans to build an LTE network in the US.
The companies are in initial discussions over the possibility of Deutsche Telekom's US subsidiary, T-Mobile USA, becoming the first customer on Harbinger's proposed network, sources told FT.com.
Harbinger in April surprised the industry with a plan to build a US-wide, wholesale only LTE network using spectrum owned by its satellite companies SkyTerra and Terrestar Networks. The network will be augmented with satellite technologies.
T-Mobile USA has been losing profit as it struggles to keep up with soaring demand for mobile data services. The company was two years behind its major competitors with a 3G network. But its 3G network now covers 205 million people and boasts industry-leading speeds.
However, that advantage could quickly be lost if Deutsche Telekom doesn’t respond to impending nationwide 4G network launches from rivals Verizon, Sprint Nextel, and AT&T.
Harbinger has not yet secured funding for the project, which aims to offer services to 9 million users at launch and 145 million in all major market by 2013.
A Harbinger/T-Mobile partnership was predicted by GigaOM when Harbinger first made its announcement.
Harbinger recently purchased 10% of handset maker Palm for an undisclosed sum.