Earlier this week LightSquared took a pre-emptive step toward resolving its GPS interference issues by devising a work-around for its planned wholesale LTE network that it said will minimize GPS interference. The company has been embroiled in a fight with the GPS community about whether its proposed LTE network will interfere with GPS receivers. Just last week it received an extension from the FCC giving it until July 1 to file a final report detailing the results of its GPS interference tests it conducted.
Here's LightSquared's reworked plan in a nutshell:
- The company will use a 10 MHz chunk of L-band spectrum in the lower portion of its spectrum holdings--the 1526-1536 MHz band rather than the full 59 megahertz of spectrum it owns in the 1525-1559 MHz band--because it said that tests results show that the lower block of frequencies is "largely free of interference issues."
- LightSquared will negotiate with Inmarsat, which controls the alternative block of L-Band spectrum, to try to accelerate its plans to begin using those frequencies. Currently LightSquared doesn't have control of those frequencies but it has signed a deal with Inmarsat to get access to that spectrum.
- And it will modify its FCC license to reduce the maximum authorized power of its base station transmitters by more than 50 percent.
This is just a temporary solution. LightSquared's proposal would essentially create a guard band to minimize potential interference between its spectrum and the GPS band while it continues to work with the FCC and the GPS community on a longer-term solution.
But the company admits that this plan doesn't solve all its interference issues--in fact in its press release announcing the solution, the company noted that there may still be interference with the high precision GPS receivers specifically designed for LightSquared's spectrum.
To mitigate that problem the company said it will reduce the power on its base stations. But Tolaga Research analyst Phil Marshall said that he doesn't believe that reducing the power will stop the interference. "With this type of interference turning down the power doesn't necessarily fix it," he said, adding that if the company is going to reduce the power of its cell sites it will likely have to increase the number of cell sites it deploys if it wants to get the same coverage and capacity as it initially planned.
Peter Jarich, service director for Current Analysis' telecom infrastructure practice, added that particularly in rural areas where the company was likely planning on using maximum power in its base stations, this will require more equipment. In its original plan, LghtSquared said it would deploy about 40,000 base stations. LightSquared spokesman Chris Stern said that there is no plan to increase cell sites at the lower power. "The network has been designed at the 2005 levels and the decrease in power will not lead to an increase in a number of cell sites. The changes that LightSquared outlined will not affect the design or the timeline of the rollout," Stern said.
One possible positive note to LightSquared's new plan is that the move to lower spectrum block will probably not wreak havoc on the base stations or the devices that are being made for the company's network. Marshall said that he believes that spectrum bands are close enough together to not require any major adjustments to the base stations. And chipmaker Qualcomm (NASDAQ:QCOM), which is working with LightSquared, said that the new spectrum bands will not require any alterations to Qualcomm's chipsets.
Nevertheless, this workaround solution is less than ideal. Despite LightSquared's assurances that the changes will not impact its timeline, some analysts still speculate that LightSquared will not be able to launch on time. This uncertainty must be concerning to LightSquared's wholesale partners, particularly those operators that are banking on the company to provide them with an LTE roadmap for the future.
What will Open Range, Best Buy, Leap Wireless (NASDAQ:LEAP) and Cellular South do if LightSquared's wholesale LTE network doesn't deliver on its promises? I'm sure there are plenty of executives contemplating that question right now. --Sue