LightSquared, Sanjiv Ahuja’s latest telecoms
venture, will be launching its wholesale-only LTE service in
four US cities in 2011, boosted by satellites to give rural
coverage. Ahuja promises it will never go to the retail market,
but device makers are a target
Ex-Orange boss Sanjiv Ahuja: LightSquared is the first in the
world that will provide wholesale-only broadband
Sanjiv Ahuja is about to launch the first LTE wholesale network
in the US, with a target of 92% population coverage in five
years via 40,000 base stations. "It’s an ambitious
plan, but a plan we’re comfortable executing on."
But LightSquared will have no retail customers of its own: it
will sell capacity only to other service providers or,
interestingly, device makers. The company plans to start
building out its network in December 2010, followed by some
trial customers at the beginning of 2011.
"We expect the company to be operational in the early second
half of 2011," says Ahuja in an interview with Global Telecoms
Business. It will launch in four cities: Denver, Phoenix, Las
Vegas and Baltimore. "They’re medium-sized cities
and we can test different characteristics," he adds.
LightSquared, based in Reston, Virginia, and backed by private
investment group Harbinger Capital Partners, has signed a
managed services contract with Nokia Siemens Networks to build
the network — a deal said in July 2010 to be worth $7 billion over
"We want to roll out fast and with very high quality, and NSN
is really helping us get it done," says Ahuja.
But who is going to use it? "You’ll never know
you’re using our network," he says. In some cases
LightSquared will be providing additional capacity to
operators, "but we may be the sole provider of 4G" to some
operators. "We are never going to build a retail presence of
LightSquared will be a pure-play network operator. "Our
economies are so compelling," he argues: "First, it is a
next-generation network, and second we are heavily leveraging
the outsourcing model." Third, LightSquared will be sharing its
resources across operators.
And it will be using existing resources wherever possible. "The
number of new towers we need to build in nominal," he says.
Towers are in place, and they have fibre to connect them, and
LightSquared’s spectrum means that their coverage
patterns will be similar to the existing patterns for the
towers, so there will be little need to build fill-in base
Ahuja is an Indian-born former IBM software engineer, who in
the 1990s helped to turn Bellcore into Telcordia, of which he
was president. Since then he’s been an inveterate
entrepreneur: in 2000 he led Comstellar, a New Jersey
start-up which backed companies in optical and wireless
technology and in digital signal processing. "Our goal was to
build and spawn technology
companies," he says today. "We had several successful companies
that we built out of it, including Leapstone and Mesh
Networks. These companies were sold to larger technology
From 2004 he went back to the big corporate world, spending
three years as CEO of Orange, and was a member of the group
management committee of the owner, France Telecom.
African WiMax project
He became an entrepreneur again in 2007, founding two companies
— Eaton Telecom, backed by France Telecom
and intended to own passive mobile infrastructure in Africa,
and Augere, a project to develop WiMax-based broadband in
places such as Pakistan, Bangladesh and east Africa —
and Harbinger is a backer of Augere as well as of LightSquared.
Harbinger is an investment company which describes itself as
specialising in "event/distressed strategies". Set up in 2001
by Philip Falcone, a Harvard economist who was head of high
yield trading at Barclays Capital, the company "seeks to invest
in alpha-generating ideas that are uncorrelated to investment
Harbinger has $9 billion of assets under management, and
according to LightSquared it has contributed $2.9 billion worth
of assets to Ahuja’s new project. Much of these
are in the form of a company called SkyTerra — MSV
until late 2008 — which for years has been nursing a
plan to build a mobile network using a mixture of terrestrial
and satellite services.
It’s not a new idea, though getting it to work has
been a challenge. The logic is that urban areas are relatively
easy to cover with conventional base stations — but
out in the countryside, particularly the wide open spaces of
North America, satellite is a better alternative.
In Europe there is a similar project: Solaris Mobile, owned
jointly by Eutelsat and SES Astra and headed by former BT
executive Steve Maine. But when the Eutelsat W2A satellite was
launched from Baikonur in April 2009, problems with the 12-metre diameter antenna created some
LightSquared has inherited SkyTerra’s strategy to
use satellites to fill in the gaps across the US where no fixed
base stations will ever reach.
"If you’re driving across the US the majority of
locations do not have physical wireless coverage," says Ahuja.
Satellite service is the only way.
SkyTerra already has a satellite operation, used by public
safety, security, fleet management and asset tracking in the US
and Canada, delivering slow-speed data, telephony and
push-to-talk. Harbinger bought the over-the-counter stock for
$262 million in cash in early 2010.
Under the new ownership and with its new name, LightSquared
will continue to serve existing customers using its mid-1990s
satellites, which it plans to replace with new satellites that
have already been built by Boeing and are due to be launched
over the next couple of years from Baikonur. Each will have a
"We’ll be launching the biggest commercial
satellites anywhere in the world," says Ahuja. "For the first
time you’ll be able to go from one end of the US
to the other" and say in range: the new satellites will use LTE
frequencies alongside those used by terrestrial base stations,
so terminals — for voice or data — will be
able to hop from the tower down the road to the satellite
36,000 kilometres above the equator.
LightSquared’s wholesale customers will be able to
choose terrestrial-only services, satellite-only services, or
services that include both, he says. Existing customers will be
moved to the new satellites.
For the integrated service, "the terminal devices will be like
a regular smartphone", says Ahuja. "The experience at device
level will be like that with a terrestrial wireless network."
With NSN in charge of the terrestrial network build,
LightSquared is shaping up to be a classic example of the lean
organisation that many believe to be the future of telecoms.
The company had 190 employees when Harbinger bought it as
SkyTerra, and now it has around 250, but NSN is bearing the
costs of the network roll-out, thought to be half the $7
billion quoted figure.
Wireline and cable operators
Which operators will use LightSquared? Ahuja remains quiet on
the details of any contracts under negotiation, but says the
company will be targeting a number of market segments,
"including existing market operators with no LTE" or wireless
operators without enough capacity. That includes wireline
operators and cable companies with no current wireless
offering, and a range of other potential providers, such as
retailers, device makers and gaming companies.
"We are the first in the world that will provide wholesale-only
broadband connectivity," says Ahuja. The US is "the core
market", he adds, "because the timing in the US is absolutely
perfect". That does not seem to mean that he has a secondary
plan to extend the project outside the US: if he does, he
"We are taking an existing business model" and completely
changing it. Service providers "are today vertically integrated
businesses that go from designing the network, providing the
network, operating the network to doing the retail and serving
the customer. Every single aspect is done by one single
Instead, "we are about providing the network, and
that’s all that we are", he says. "Our objective
is to take this broadband wireless connectivity and take it to
the market place with as many channels as we can," though not
with its own retail outlets. "We will never compete with our
customers." LightSquared "wants to be a very, very efficient,
big wireless broadband data supplier" with a plan to "build a
robust, industrial grade, high-quality network and make it
available to everybody, and let them take their own brand and
what it stands for".
Everybody means device makers as well as network operators.
Camera makers are aware that "80% of your digital pictures
never see the light of day", he notes. Put
LightSquared’s technology inside the camera "and
the instant you take the picture, the picture is uploaded
— and the camera manufacturer embeds it as part of the
service, just like the Kindle. You never see who is behind it."
LightSquared "will be providing the transport".
But wouldn’t existing network operators be
concerned about LightSquared competing with them for that
business? The US providers are experiencing a huge growth in
data, he says, implying that there is enough for all.
"We’ve seen a tenfold increase in wireless data
demand", and in the next five years it will grow a further 40
or even 60-70 times, he says. "Operators with spectrum will
have a hard time keeping up with demand," says Ahuja. "There is
not enough spectrum. All we’re trying to do is
fulfil some of that demand-supply gap."
LightSquared is "talking to separate categories of players",
though he does not name any. "There are several discussions
with several of them. Some do not have enough spectrum. And the
ones with spectrum still expect capacity shortages. We have a
model that will truly complement every player in the industry."
It is a US-only business, he confirms. "That’s our
focus, that’s our drive, that’s our
intent," because of "the demand-supply gap": the US "has more
of a spectrum shortage than western Europe", he adds: "In the
US it is much more acute than in the rest of the world."
LightSquared is believed to have reached the stage of
"significant term sheets with partners" but it is likely that
many will be reluctant for information about contracts to be
published — though if any start to claim
satellite-delivered LTE out in the prairies, it will be hard to
disguise that LightSquared is behind it. We’ll
have to see. GTB
GTB's NSN/LightSquared contract report
GTB interview with Sanjiv Ahuja about Eaton Telecom
GTB inteview with Sanjiv Ahuja about France Telecom
rebranding as Orange
GTB report on Solaris Mobile
Sites for LightSquared, Harbinger, Eaton
Telecom and Augere
Boeing factsheets about LightSquared's satellites, SkyTerra 1 and