NSN wins US$7B contract to build US LTE network

Big win for NSN in the US and probably the world's largest LTE contract to date

GSMA Business Briefing
July 20, 2010

US hedge-fund Harbinger has moved forward with its plans to build a wholesale LTE network in the US by awarding a massive US$7 billion contract to Nokia Siemens Networks (NSN) to deploy the network. The new network – now known as 'LightSquared' - will launch in the second half of next year and is aiming to provide near-nationwide coverage using terrestrial spectrum owned by the satellite networks that Harbinger controls. According to a Financial Times report today, NSN has signed an eight-year contract with LightSquared to design, build and maintain the new network. The new network will consist of 40,000 base stations that will cover 92 percent of the US population by 2015. It is the second major deal for NSN in as many days after yesterday announcing its US$1.2 billion acquisition of Motorola’s networks business. Both deals will strengthen the European vendor's position in the US, where it has traditionally been weak. The Harbinger deal is also arguably NSN’s highest profile LTE contract win. CEO Rajeev Suri said the company was “proud to have been selected for the largest outsourced deployment of a wireless network in the US.”

The award of the network contract to NSN is the first major sign that Harbinger is making progress with its ambitious plan. LightSquared will be led by Sanjiv Ahuja, former head of France Telecom’s Orange mobile businesses, who told the FT that LightSquared would be a “disruptive force in the US wireless landscape.” Meanwhile, Harbinger founder Philip Falcone noted that possible wholesale customers for the network are likely to include prepaid operators such as Leap Wireless and MetroPCS, as well as T-Mobile USA, Deutsche Telekom’s US subsidiary (the two largest US mobile operators – Verizon Wireless and AT&T – are expected to have restrictions imposed on the amount of capacity they can rent on the new network). Service is set to begin in two trial markets - Denver and Phoenix - with a commercial launch before the third quarter of 2011 providing service to a potential market of around 9 million.