HOLLYWOOD, Fla.--A top LightSquared executive predicted his company, which is backed by hedge fund Harbinger Capital Partners, will shake up the wireless industry when it deploys its LTE network.
Speaking today at the PCIA 2010 Wireless Infrastructure show here, Drew Caplan, the chief network officer at LightSquared, said he's confident the company selected the right technology, has a strong spectrum position and has an attractive business model. Caplan added that the U.S. wireless industry "is an industry that is begging to be shaken up."
Caplan said the company's 40 MHz of L-band spectrum for LTE services in the 1.6 GHz band is the largest contiguous block of spectrum below 2 GHz. (It is important to note, however, that LightSquared will not have access to the full 40 MHz of spectrum until it completes Phase 2 of an agreement with satellite firm Inmarsat. That process will take 30 months to complete.) 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).
Caplan said LightSquared's spectrum sits in a "sweet spot," and he took shots at the company's 4G competitors. Caplan said Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T)--which are building LTE networks in the 700 MHz band--will have "a very serious capacity crunch" and will need to build more cell sites. He also said Clearwire (NASDAQ:CLWR), operating in the 2.5 GHz band, will suffer from poor propagation. "This is physics," he said.
Besides touting LightSquared's spectrum position, Caplan also discussed LightSquared's buildout plans. The company earlier this year inked a $7 billion deal with Nokia Siemens Networks to design and operate its network. Caplan said LightSquared will deploy remote radios on its towers and will benefit from not having to support multiple legacy technologies. While he did not provide an exact number, Caplan said that roughly 60 to 70 percent of LightSquared's towers will have fiber backhaul connections.
What makes LightSquared different from other 4G operators, Caplan said, is the "horizontal model" it will operate, and the fact that it will not have a huge corporate structure--only 500 to 700 employees. "Every dollar that comes in from our investors and every dollar that comes in from our partner customers, after we've paid for those 500 to 700 people, is going to go to building the network," he said. "That's all we do."
Caplan also elaborated on LightSquared's device strategy. As a condition of the company's licenses, the FCC is requiring that Lightsquared provide "an integrated service" for terrestrial and satellite services, a term Caplan said was deliberately vague. He said that once the company demonstrates to the FCC that its devices will support both terrestrial and satellite service, the FCC requirement is satisfied.
When asked about LightSquared's potential partners, Caplan said the company is very excited about them, but could not name any or provide a timeline for naming them. Tom Surface, LightSquared's director of marketing and communications, told FierceWireless that the company has locked down two partners and is in "advanced negotiations" with 11 others.
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