Nokia has announced that it will develop mobile devices for billionaire Philip Falcone’s LightSquared — an ambitious 4G cellular network venture meant to compete with established carriers like AT&T, Verizon, and Sprint, Bloomberg reports.
Falcone’s Harbinger Capital hedge fund is backing the project, and Nokia Siemens has committed $7 billion to building up the 4G network over the next few years. LightSquared plans to have 92 percent of the U.S. population covered with its network by 2015. Given the involvement of Nokia Siemens, it’s not a huge surprise that its parent company would be providing handsets for the project.
Unlike typical cellular carriers, LightSquared doesn’t plan to sell directly to consumers. Instead, it intends to wholesale its network to retailers and other network providers. As CNN mentions, a retailer like Wal-Mart could use LightSquared’s network to offer a branded wireless service of its own. Other mobile carriers like T-Mobile could also license the network for 4G coverage without the need to build their own infrastructure.
While it may seem crazy to attempt building up a new cellular network from scratch, LightSquared’s wholesaling ambitions may prove successful. It opens the door for more companies to offer wireless services of their own and has the potential to drive down costs of 4G network access nationwide.
The company plans to build its network in nine U.S. metro areas in 2011, and it is beginning trials early next year in Baltimore, Las Vegas, Phoenix, and Denver. LightSquared is also considering supplementing its cellular network with satellite coverage. It’s working with Qualcomm to develop chips that would allow phones to use both cellular and satellite networks.
Reston, VA-based LightSquared says it has amassed $1.75 billion in initial funding commitments.
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