NSN wins €5.4b US LTE contract

Nokia Siemens Networks has won a whopping $7 billion (€5.42 billion) contract to build and manage a 4G network across the US for startup LightSquared.
 
The new operator plans to build a hybrid satellite-LTE network which it would wholesale to mobile, fixed-line and cable operators.
 
The announcement comes just one day after NSN announced it had bought Motorola’s network arm for $1.2 billion, aimed at boosting its small footprint in the US and Asia.
 
LightSquared said it would launch in the second half of next year, with 40,000 base stations covering 92% of the population by 2015.
 
The business is owned by New York hedge fund Harbinger Capital Partners, which surprised the industry in April when it unveiled plans for the network using spectrum owned by its satellite companies SkyTerra and Terrestar Networks.
 
It also reportedly plans to lease satellite spectrum from UK-based Inmarsat, in which it owns a 28% stake.
 
Harbinger has spent $2.9 billion on spectrum for LightSquared, but the latter has secured only around $1.75 billion in debt and equity so far from Harbinger and other undisclosed investors.
 
LightSquared’s newly-appointed CEO Sanjiv Ahuja, former head of France Telecom’s Orange mobile unit, told Reuters that the project’s financing should peak at $5 billion.
 
He said he expected LightSquared to reach cash flow break-even before the end of NSN’s eight-year contract.
 
“We expect this announcement to be perceived as negative for Clearwire in particular and wireless providers in general as there is investor desire for fewer, not more, players in the space,” Wells Fargo Securities analyst Jennifer Fritzsche was quoted by Reuters as saying.
 
“We would note, however, that Harbinger is starting from nothing and it will take a long time before it had a presence in the market.”