LightSquared already has a spectrum leasing agreement with Inmarsat, which controls the lower 10MHz band that the company would start using under the new plan. Last year the company announced it would pay Inmarsat a total of US$337.5 million to cover the first phase of that deal. LightSquared had planned to move into that lower band as demand for capacity grew over the next few years.
If it can win approval to operate the network, LightSquared plans to sell service only through other service providers, on a wholesale basis. Its satellite network would provide coverage in many rural areas where the nation's major carriers haven't deployed towers, while the LTE system would deliver a faster service in metropolitan areas. But some observers are skeptical about the profit in this scheme.
"I really struggle with the business model they're pursuing," Marshall said. "They haven't changed the business model sufficiently for it to work in many of these environments where large-scale service providers are challenged," Marshall said.
One component that might help LightSquared succeed is a reported long-term partnership with Sprint Nextel, under which Sprint would resell services on the LTE network. LightSquared declined to comment on the reports. It's not clear how Clearwire, which is majority-owned by Sprint and sells wholesale capacity to that company, would be affected by such a partnership.