Harbinger Capital Partners, the private-equity firm that is trying to build a nationwide LTE network, has been trying to raise more funding, in the form of debt, as it tries to maintain momentum for its wireless plans, according to a report in the Wall Street Journal.
Harbinger plans to build a nationwide, wholesale LTE network using both terrestrial and MSS spectrum following the firm's merger in March with satellite operator SkyTerra. The network has been the subject of fierce opposition from AT&T (NYSE:T) and Verizon Wireless (NYSE:VZ). Both operators regard some of the proposed network's terms discriminatory.
Amid all of this, the firm has hired UBS Investment Bank to find investors willing to back a $400 million loan to pay off debt and cover expenses, according to the Journal, which cited an unnamed source. Philip Falcone, the head of Harbinger, has poured around $2 billion into the venture, the report said, about a fifth of Harbinger's $10 billion in assets. The cost of building the network could be as much as $6 billion, depending upon the scope of the network buildout.
A Harbinger spokesman declined to comment.
One key stumbling block to securing more funding has been disagreements with potential partners over the values Harbinger was assigning to the venture, the report said. Deutsche Telekom was said to be mulling whether to partner with Harbinger by making its T-Mobile USA subsidiary a wholesale customer of Harbinger's network.
In addition to financial pressure, the clock is ticking on the regulatory front. As a condition of its deal to acquire SkyTerra, Harbinger must cover at least 100 million POPs in the U.S. by the end of 2012, 145 million POPs by the end of 2013 and 260 million POPs by the end of 2015.
- see this WSJ article (sub. req.)
Harbinger faces uphill battle on LTE network
Verizon follows AT&T, slams FCC over Harbinger deal
AT&T files petition to overturn some Harbinger LTE network stipulations
AT&T, Verizon blast FCC rules for proposed LTE network
Are Harbinger Capital's LTE plans too good to be true?