Outsourcing Age

Harbinger venture signs NSN in $7B outsourcing deal

Author: OutsourcingAge Editor

Fresh off its agreement to buy Motorola Inc.’s networks business, Nokia Siemens Networks said it will build Harbinger Capital Partners’ LTE network in an eight-year deal valued at $7 billion, marking NSN’s biggest North American contract and the largest outsourcing deal in the United States.

Harbinger, meanwhile, released more details about its plan to build out a nationwide LTE network under a wholesale model, selling to wireless operators and other companies that want to offer branded wireless service. The company said it is launching LightSquared and announced it management team, led by former Orange executive Sanjiv Ahuja, who will become chairman and CEO.

“As the nation’s first wholesale-only integrated wireless broadband and satellite network, LightSquared will provide wireless broadband capacity to a diverse group of customers, including retailers; wireline and wireless communication service providers; cable operators; device manufacturers; web players; content providers; and many others,” the company said in a press release. “The LightSquared network will allow these partners to offer satellite-only, terrestrial-only, or integrated satellite-terrestrial services to their end users. This wholesale-only business model ensures LightSquared has no conflict of interest with its customers. LightSquared seeks to transform the wireless broadband industry to one that fosters innovation, creativity, and freedom of choice via the first truly open and net neutral wireless network.”

The concept of being a carrier’s carrier is not new, but has yet to be wildly successful. Perhaps the most famous example is NextWave Telecom Inc., which bought PCS licenses in the 1990s only to find it couldn’t pay the government for the spectrum. Ultimately, a Supreme Court battle ensued, and in the end, the court ruled in favor of NextWave against the Federal Communications Commission over the nonpayment. NextWave shareholders made out nicely once NextWave sold the majority of its licenses to Verizon Wireless – but the model of a carrier selling wholesale services to other carriers was never realized. However, times change and the LightSquared concept is seen as a way for smaller and rural providers, as well as wireline operators without spectrum, to continue to offer next-generation services without having to make significant investments in technology. Further, LightSquared has been mentioned as a way for T-Mobile USA Inc., which doesn’t have enough spectrum to be able to offer LTE service, to get in the 4G game.

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Tags: Business Process Outsourcing, Infrastructure Issues, IT, Outsourcing Provider, Outsourcing Services

This entry was posted on Thursday, July 22nd, 2010 at 1:01 am and is filed under Company News, Outsourcing News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.