Harbinger Capital partners has reportedly hired Sanjiv Ahuja, the former chief executive of Orange — the wireless unit of France Telecom — to run its proposed Long Term Evolution wireless network, according to the Wall Street Journal. Harbinger, a private equity firm, wants to construct a next-generation wireless network using both satellite and terrestrial components. SkyTerra, a Harbinger portfolio company, would provide the satellites, but Harbinger still needs a partner or billions of dollars to build out the terrestrial network.
According to the WSJ, Harbinger is in talks with potential investors such as Qwest Communications International and SK Holdings, and is attempting to raise between $1 billion and $2 billion to fund the venture, but there have been disputes over how much equity each partner will get in the entity. Harbinger has spent four years and more than $2 billion on the venture so far, and wants to keep as large a stake as it can, the Journal said. But without backing from industry partners, it’s unlikely that Harbinger’s ambitious project — estimated to require at least $6 billion — will get off the ground.
It’s not clear whether Qwest’s impending merger with CenturyLink would make it more or less likely to be a partner in the project. The deal creates a giant telecom company, but one without a wireless division to backstop its existing wired business. Getting access to wireless from Harbinger’s proposed LTE network would be one way of filling that gap, but CenturyLink’s CEO has said the company has no plans to get into wireless.
Harbinger has said that it plans to use its combined satellite and terrestrial network to offer wholesale wireless that telecom and cable companies can use to bolster their high-speed offerings in areas their existing networks don’t cover. In addition to the satellite network and all that entails, the plan would require a phone and data card that supported the service, as well as a terrestrial cellular network to handle the calls.
If Harbinger has hired Ahuja, a former IBM executive who ran the Orange mobile network from 2004 to 2007, it would help to show investors and potential partners that the venture has some operating experience at the helm. One of the biggest hurdles for Harbinger is the perception of satellite wireless as a money pit with a history of failure: the 1990s saw two companies — Iridium and GlobalStar — soak up billions of dollars trying to build satellite networks.
Post and thumbnail images courtesy of NASA