LightSquared obtains more financing, reports strong interest in wholesale model

LightSquared, the wholesale-only integrated wireless broadband and satellite network owned by Harbinger Capital, announced it has secured $850 million in debt, representing the initial round of a syndicated secured credit facility arranged and led by UBS AG.

LightSquared said it will use the proceeds of the four-year credit facility to build its LTE wholesale network, which faces an accelerated time schedule thanks to Harbinger's deal with the FCC to use its terrestrial and satellite spectrum.

With this $850 million, LightSquared said it has now obtained an aggregate of more than $2 billion in equity and debt proceeds and commitments. Analysts, however, have estimated the cost of the network to reach $5 billion.

LightSquared also said it has signed its initial wholesale agreements and is in advanced talks with several potential customers. Because of the strong demand for capacity on its wholesale network, LightSquared said it plans to accelerate the implementation of Phase 2 of the Inmarsat Cooperation Agreement in the fourth quarter. This will give LightSquared increased access to spectrum controlled by Inmarsat, the company said.

LightSquared has said its wholesale LTE network will allow for terrestrial-only, satellite-only or integrated satellite-terrestrial services (via the terrestrial and MSS spectrum Harbinger scored through a merger in March with satellite operator SkyTerra). LightSquared is planning initial LTE trials in Baltimore, Denver, Las Vegas and Phoenix, with commercial launches planned by the third quarter of 2011. The company, which has access to 59 MHz of spectrum, has said its network will consist of around 40,000 cellular base stations covering 92 percent of the U.S. population by 2015.

The company inked a $7 billion contract with Nokia Siemens Networks in July to design and build the network, and analysts have speculated that NSN might provide LightSquared with vendor financing to defray the cost of building the network.  

For more:
- see this LightSquared release

Related articles:
Report: LightSquared gets more funding
Is Harbinger's $3B bet on LightSquared scaring investors?
LightSquared talks LTE wholesale strategy
LightSquared 4G buildout plans leak
Report: TerreStar hires restructuring advisors
Harbinger forges $7B LTE pact with Nokia Siemens
Report: Harbinger steps up search for LTE network funding
Harbinger faces uphill battle on LTE network

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