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LightSquared Will Launch New Wireless Broadband Network in 2011

Written on July 27, 2010 by Japhet Writ

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Consumers and businesses will have a lot of options for a wireless broadband service provider starting next year. Will LightSquared be the next big thing?

Starting next year, U.S. consumers and businesses may get more options in services. Harbinger Capital Partners revealed on Tuesday the launch of its new network, . It aims to provide competition to the current phone companies.

However, the network have to overcome financial and regulatory obstacles first. LightSquared will just offer data, no conventional cell phone services yet. A user can send phone calls via data connections, but the technology is not yet standardized.

One reason why it’s rare for national wireless carriers to grow is because it’s difficult and expensive to acquire rights to nationwide airwaves. It is also impractical to place calls over satellites compared with cell towers.

With regards to this matter, FCC allows spectrum holders to back up their satellites with cell towers. This serves as another option for LightSquared in building out a conventional ground-based network of cell towers. But under FCC rules, all devices that uses LightSquared’s spectrum must have the ability to connect to a sattelite other than cell towers. That would add to the cost of devices and limits the selection. Therefore, the service provider needs to launch a satellite later this year to meet up with the condition that it must be able to provide satellite connectivity.

It’s also not clear if Harbinger will be able to raise sufficient funds needed to build the network and its other expenses. But the company will evaluate their fundings as they develop and grow their business, according to Tom Surface, a spokesperson for LightSquared.

Still, LightSquared represents a new venture in the wireless market using the fourth-generation network technology. LightSquared will not sell their services directly, instead they will sell wholesale access to other companies that can resell it to consumers. It hopes to attract phone companies and cable TV providers that don’t have wireless network of their own. This could provide a renewed opportunity for retailers and major brands such as Wal-Mart, Best Buy and Office Depot to offer wireless network services.

The network is planning to start providing service in the second half of 2011 in Baltimore, Denver, Las Vegas and Phoenix. will build, maintain and operate the network under a $7 billion, eight-year contract.

The launch of the new network would fit with the goal of FCC in creating more competition in the wireless market.

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