Report: T-Mobile may partner with Harbinger for LTE

Deutsche Telekom is mulling whether to partner with Harbinger Capital Partners by making its T-Mobile USA subsidiary a wholesale customer of Harbinger's proposed nationwide LTE network, according to a report in the Financial Times.

The report, citing unnamed sources familiar with the matter, said that Deutsche Telekom has held preliminary talks with Harbinger over the network, but no decision has been made. Harbinger plans 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 could cost as much as $6 billion to build, and 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.

Representatives from Harbinger and Deutsche Telekom declined to comment.

Such a deal could give T-Mobile a way to catch up to AT&T and Verizon, which are building out LTE networks using 700 MHZ spectrum. T-Mobile holds AWS spectrum licenses and is deploying HSPA+ technology, which it hopes to have deployed across the breadth of its network by year-end. The deal could also give Harbinger a valuable customer for its network. Harbinger confirmed last week that it had tapped Sanjiv Ahuja, the former CEO of France Telecom's Orange wireless unit, to run the wireless venture.

In March, T-Mobile USA CEO Robert Dotson confirmed that the carrier had talked with Clearwire (NASDAQ: CLWR) and various cable companies about a possible joint venture to enhance the company's spectrum position. Dotson said that T-Mobile, the nation's No. 4 carrier, will not be counting on the FCC's national broadband plan to fulfill its spectrum needs.

Deutsche Telekom CEO Rene Obermann defended T-Mobile USA's performance at the German company's annual meeting. He said he is not "fully satisfied" with its U.S. performance, but also said DT is not giving up on the U.S. market. "After all, it is making us a great deal of money," he said. T-Mobile in the U.S. has focused on new unlimited plans, adding smartphones based on Google's Android platform and on building out and upgrading its 3G network, but has seen its postpaid subscriber growth slow.

For more:
- see this FT article (sub. req.)
- see this Bloomberg article
- see this WSJ article (sub. req.)

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