Report: LightSquared interested in buying LTE network capacity from AT&T

In an odd twist, LightSquared, which is planning a wholesale LTE network, is considering a deal with AT&T (NYSE:T) to buy capacity from the operator, Bloomberg reported, citing two people with knowledge of the discussions.

The discussions are early, according to Bloomberg's sources, but highlights the fact that LightSquared will need additional capacity early on as it works with Inmarsat to free up a contiguous block of spectrum. LightSquared has a total of 59 MHz of spectrum, but it only has current access to the 1525-1559 MHz band, which is the band next to the GPS bands. The company is paying Inmarsat to transition parts of its spectrum so LightSquared has a contiguous block of spectrum, and the company is expected to get access to two more 5 MHz channels no later than November 2012, depending on how fast Inmarsat can get out of the band. Two more 10 MHz channels are expected to become available for LightSquared's use by the end of 2013.

Moreover, LightSquared could be relegated to using just the lower portion of its spectrum--up to 1545 MHz--until a fix to the GPS interference problem is found. The company has been testing its network near Las Vegas to see how much it interferes with GPS. A final report on the matter is due to the FCC by June 15.

Under an arrangement with AT&T, LightSquared would pay to use AT&T's LTE network when it needs extra capacity.

LightSquared has signed up several wireless carriers as customers, including Leap Wireless (NASDAQ:LEAP) and Cellular South. Reports also have indicated that LightSquared has explored the possibility of a network-sharing deal with Sprint Nextel (NYSE:S). LightSquared intends to launch technical trial markets by year-end and launch commercial service in the first half of 2012.

For more:
- see this Bloomberg article

Related articles:
Harbinger's Falcone: LightSquared will file IPO eventually
LightSquared begins testing in Las Vegas, delays rollout plans as GPS interference fears mount
Report: LightSquared contemplates IPO for this summer
LightSquared inks LTE deal with Cellular South
LightSquared CEO: We're in contract negotiations with 15 companies
Report: Time Warner interested in a deal with LightSquared 
LightSquared, Best Buy ink MVNO deal
LightSquared inks wholesale LTE deal with Leap Wireless

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