Analyzing LightSquared’s revised deployment plans

Posted in LightSquared, Operators, Regulatory, Spectrum at 7:10 pm by timfarrar

Today, it was reported that LightSquared has revised its deployment plans, and now expects “field trials in the third and fourth quarter this year in Baltimore, Las Vegas and Phoenix” followed by “a ‘full-blown commercial’ launch…scheduled for early next year” rather than “by the end of this year” as was indicated in April. Even that was slower than in January, when LightSquared suggested that it was “testing LTE in Baltimore, Denver, Las Vegas and Phoenix now” and was “expected to launch up to nine Midwest markets this year”.

Back in January, LightSquared was granted a waiver by the FCC, based on commitments that the company was “confident that this [GPS interference] issue can be resolved without delaying deployment of wireless broadband, generally, or the LightSquared network specifically” and that “LightSquared was cognizant of this issue when we made the buildout commitments that served as the basis for the Commission’s own requirements in its March 2010 Order”. Indeed LightSquared also indicated that it would not “continue to roll out our network and meet the rigorous construction timetable that the Commission has made a condition of our authorization” unless the FCC takes “quick, favorable action” to approve its updated business plan.

However, despite the FCC acceding to LightSquared’s waiver request, based on these assurances, it now seems that LightSquared will delay the rollout of its network and blame the GPS interference issue, saying that “the company is watching the FCC before fully rolling out its ground-based network”. It would be understandable if in these circumstances the FCC was becoming somewhat impatient with LightSquared’s progress, and LightSquared’s CEO has recently been doing the rounds of FCC Commissioners, presumably with a view to shoring up LightSquared’s support at the FCC.

UPDATE: LightSquared has told DSLReports that “they’ve always planned their first commercial launch to be in early 2012″. Of course that’s not what LightSquared told the FCC in March 2010, who quoted as part of their public interest rationale for approving the Harbinger takeover that “Service will begin in two trial markets with a commercial launch commencing before the third quarter of 2011, providing service for up to 9 million POPs”.

Looking at LightSquared’s latest statements in more detail, it also appears that Denver has been dropped from the original deployment plan (indeed back in March 2010 LightSquared told the FCC that “service will begin in two trial markets, Denver and Phoenix, with a commercial launch before the third quarter of 2011 providing service to up to 9 million POPs”). It isn’t terribly surprising that the initial rollout will now take place in Las Vegas, because that is basically the easiest major city in the entire US to cover with a wireless network, due to the lack of foliage and the flat terrain. Indeed, ICO (now DBSD) was able to cover the city very well (albeit without the intention to provide indoor coverage) with only 3 base stations, during trials of its MIM service in 2008, as shown in the diagram below.

In Phoenix, I’m told that LightSquared’s site acqusition partner shut down its operations back in January, and at that point the tower companies were no longer being paid rent for the 20 site leases that had been signed. In Baltimore I understand that only a very limited proof of concept deployment was planned (with a handful of base stations at most), to determine the extent of interference with Inmarsat’s maritime safety services. Given this information, unless something significant has changed in the last few months, it seems that at best only a minimal deployment effort is taking place ahead of the potential network sharing agreement with Sprint, and associated contract with Ericsson, that everyone expects to emerge soon (and which today’s Clearwire agreement with Ericsson presumably provides a template for).

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