11.19.10

Was NSN LightSquared’s second choice?

Posted in Financials, LightSquared, Operators, Regulatory at 10:34 am by timfarrar

Back in March, we noted the rumors that Huawei could end up building and vendor financing the LightSquared network to the tune of $1B+ and highlighted the potential security concerns that would be associated with such a move. Today the Wall St Journal’s story on Huawei appears to confirm this rumor, stating that Huawei’s “acquisition attempts since [2008], including an attempt to buy into Harbinger Capital LLC’s high-speed wireless network, have been quashed due to security-related concerns as well, according to a report by the U.S.-China Economic and Security Review Commission”.

This raises the interesting question of whether Huawei was one of the potential funding sources that Harbinger was counting on when it decided to buy SkyTerra in 2009, and whether Nokia Siemens Networks (NSN) was actually the second choice as prime contractor to build the LightSquared network, after the Huawei deal fell through. It also leads us to wonder whether NSN will eventually provide substantial vendor financing for LightSquared, and at what stage that will be announced. With Reuters reporting last week that Nokia and Siemens were making “little progress in efforts to find a deep-pocketed partner for their ailing telecom gear venture” it might now be more difficult for NSN to make a major funding commitment to LightSquared in the near term.

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