Live from New York on July 20, 2010 was a PR announcement that didn’t especially catch those listening by surprise. The comments have been leaking for many months overtime for such an ambitious project but lacked the details necessary to form a robust discussion, but now we have it; the merging of assets from SkyTerra, Terra Corp, and Harbinger Capital Partners to form a New, truly OPEN, truly NET NEUTRAL 4G LTE network for BOTH satellite and terrestrial use - LIGHTSQUARED.  The announcement comes as Harbinger Capital has announced $4.75 billion (current and future) equity and financing for the project. In addition to funding for the roll out, they have announced a $7 Billion agreement with Nokia Siemens Networks to develop, deploy, install, operate and maintain their terrestrial base stations, including some 36,000 base stations as well as their core network and infrastructure. With the partners in place and financing acquired, LIGHTSQUARED plans to offer TRULY NATIONWIDE LTE COVERAGE to 92% of Americans by 2015. The most interesting aspect of the company’s business model is that LIGHTSQUARED will strictly be a WHOLESALE network - they will have no direct retail association with end users. The power and the scope of this announcement is unprecedented and will prove (mark my words) to truly shake the axiomatic dominance of the current business models of today’s successful Mobile Network Operators (MNO’s).

Meet the Players
The power of the team that has been assembled is impressive. If you’ve only heard company names like Harbinger Capital, Terra Corp and others thrown around and only slightly identified them with buzz words (private investment firm, satellite provider, etc) allow me the opportunity to introduce the companies and recap the events over the last few years:

Harbinger Capital has (quite simply) made its money off of the collapse of the US Economy. The toxic derivatives investments made by Fanny, Freddy, Countrywide, etc were sniffed out by Philip Falcone and his investment partners and they formed Harbinger Capital in 2001. Quickly growing in size and reaching critical mass, by 2007 they had made billions and more was still to come. Falcone had his beliefs and ideas in assorted fields other then finance, including philanthropy, politics, economic policy, and technology.

Satellite Companies
Harbinger decided to move forward with majority ownership in companies Sky Terra, and Terra Corp, which have launched and operated satellites for next generation communication. These companies have acquired (since the late 1980’s) over 50MHZ of spectrum in the 2Ghz band for satellite as well as terrestrial use. Over 20MHZ of spectrum is continuous across the Continental US, Hawaii, Alaska, Puerto Rico and Guam.

Terrestrial player Nokia Siemens Networks stand as the premier piece to this puzzle. Together (through mergers and acquisitions) NSN has assembled a strategic niche in the mobile market by not only providing hardware sales and deployment, but also managed services for major companies such as Century Link (formerly Embarq, which was formally Sprint Landline) and Sprint/Nextel.  Their expertise in not only operating and maintaining these networks for optimum performance and cost savings to carrier is coupled with DECADES worth of intellectual property in the feasibility/scalability of nationwide network deployments, microwave backhaul, andkey mobile network usage projections, traffic optimization and ultimately ROI.

LEADERSHIP
The leadership team at LIGHTSQUARED has Sanjiv Ahuja serving as Chief Executive Officer. Ahuja has served as CEO most recently at Orange, where (under his leadership) the company added service from 17 to 23 nations, and increased users by the millions and revenues by the billions. In addition to the board of Orange, he also is currently serving on the board of the IEEE. Ahuja has seen the growth of mobile data and decided to join LIGHTSQUARED in March 2010
"LightSquared will be a disruptive force in the U.S. wireless landscape by democratizing wireless broadband services; we're not only delivering exciting opportunities for manufacturers and retailers, but also real change for consumers.”
The team behind Ahuja is peppered with well seasoned telecom veterans from companies such as Time Warner, Ericsson, Clearwire, Sprint/Nextel, Marconi, Orange, as well as many other international leaders in the industry.
While many may challenge the ideas and solutions that will come from a startup wireless company (watch for a subsequent article in the coming days) one thing is certain: wholesale success has been seen in the wireline industry for many years, from the likes of so many both in the copper and fiber optic business models. We have not seen a company offer only wholesale services of its wireless network, so the ultimate question which I will answer later is ARE WE READY FOR A WHOLESALE 4G NETWORK?

The possibilities can start to fill the mind pretty quickly; auto, consumer electronics and consumer appliance manufactures can have their own link to their products and their users. Governments and the military will have access to citizens, soldiers, and (potentially) even subsidized residential broadband connections.  Major Healthcare providers can now provide access (subsidized through private insurance as well as potentially government dollars) linking patients and health care pro’s for increased health care monitoring. So, included with your insurance premium would be a triple bypass, which will then monitor your health care metrics directly to a database at the hospital when you’re at home or traveling. Game and Web developers can now offer your WOW subscription to INCLUDE broadband access…Wal-Mart can now offer “Sam’s Wireless” as a cheap prepaid internet alternative. The possibilities are just too much fun to think about. According to LIGHTSQUARED’s press releases, the company should (directly and indirectly) create more than 100,000 jobs over the next 5 years.  I am a firm believer in competition in the market place, as well as healthy job creation based on demand. This product and this company are a positive step in that direction, as well as a giant leap in consumer choice, healthy competition, and broadband end user experience.