As expected, LightSquared received a $586 million loan from UBS AG and JPMorgan Chase & Co. to help fund the construction of its nationwide wholesale LTE network. The company, which is backed by the hedge fund Harbinger Capital Partners, said it will use the fresh funding for general corporate purposes.
The announcement was rumored in a report from Bloomberg last week. That report said the loan would provide LightSquared with around $1 billion cash on hand. LightSquared has secured more than $2 billion in debt and equity financing in the past seven months.
Last week, LightSquared CMO Frank Boulben told FierceWireless that the company has signed wholesale deals with two U.S. operators and is in discussions with three more. Boulben also said the company has an agreement with a major retailer that it will name before the end of March.
LightSquared plans to build an LTE network that covers 92 percent of the U.S. population. In late January the FCC granted LightSquared a waiver that will allow the company to offer service on a terrestrial-only basis, bypassing a requirement that devices on its network be able to communicate with satellites. The waiver will allow LightSquared to offer terrestrial-only cellular devices, which will be cheaper than devices that have both terrestrial and satellite functionality.
LightSquared's network construction plans are aggressive. The company is conducting LTE trials in Baltimore, Denver, Las Vegas and Phoenix, with commercial launches planned by the third quarter of this year. Nokia Siemens Networks is designing and building the network. Nokia (NYSE:NOK), AnyData and Qualcomm (NASDAQ:QCOM) are working on devices.
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