LightSquared: GPS Fix to Cost Industry $400M

San Diego–Start-up wireless provider LightSquared said today it will cost the commercial GPS industry as much as $400 million for gear that will eliminate the interference potentially caused by its planned next-generation network.

LightSquared Chief Marketing Officer Frank Boulben told CNET that there are roughly 500,000 commercial precision GPS devices in the U.S. that could be disrupted by its network. But the company has developed a device, which costs between $300 and $800 and will protect GPS devices from such disruptions.

LightSquared is aiming to build its own 4G LTE wireless network, which the company plans to offer to other providers on a wholesale business. But the company has been hamstrung by concerns over crucial GPS equipment powering everything from planes to farming equipment. The company is working to appease the concerns as it seeks government approval to begin its network rollout.

But LightSquared and the GPS industry remain far apart on a resolution. LightSquared wants the GPS players to pay for the components; the company has argued that the GPS industry should have vacated the spectrum years ago, and is responsible for the upgrades. The GPS players have balked at the request, noting that its equipment is too crucial to risk interference.

Boulben said that the GPS industry’s stance has steadily changed over the past few months, from outright denial of LightSquared’s right to exist to refusing to pay for the new components. He added he believes that the GPS companies will eventually change their minds and come to an agreement.

LightSquared has already committed to spending $50 million on component to ensure government GPS equipment is properly protected. The company previously showed off a full developed and protected GPS unit, as well as a smaller component that mounts on top of existing GPS antennas.

LightSquared is still awaiting the results of a final test of the components. Boulben said he was confident the tests would yield positive results.

"I would be extremely surprised if there was a different result," he said.

The components only deal with the 0.5 percent of GPS devices that remain vulnerable after LightSquared laid out its plan to move to different part of its spectrum, which removed the risk of disruption to 99.5 percent of GPS devices.

The company is also undergoing a final test for its alternate plan, which Boulben said would be completed by November.

Boulben also backed the company’s target of going live with its network–if it gets its approval–by the second half of 2012, with full completion by 2014.

Boulben, who was taking a few meetings at the CTIA Enterprise & Applications show today, also brought along a team from Sharp, who will be supplying LightSquared’s reseller customers with smartphones and tablets.

Sharp marketing executive Takashi Shirasaki said that LightSquared provided the company with a chance to expand its presence in the U.S. Despite being a top supplier in Japan, it has never broke into the U.S. market, with the exception being the old T-Mobile Sidekick messaging phones.

"The partnership with LightSquared is a good opportunity for Sharp," Shirasaki said.

While the network isn’t up yet, Shirasaki said he is talking to LightSquared’s customers now about future phone plans. He said that the company would be able to accommodate a wide number of price ranges.

For now, LTE phones have largely been premium devices. Verizon Wireless’s LTE phones have all began above the standard $200 benchmark for high-end devices.

Boulben said the attractive 4G LTE wholesale rates LightSquared plans to charge will allow its customers to pass the savings along to consumers. He added the rates will allow for the explosion of a prepaid 4G business.

Source: CNET