* LightSquared says wins wireless deal with Best Buy
* To spend $14 bln over 8 years on network, operations
* Also in talks with a major consumer electronics maker
* Not yet given up on T-Mobile deal
(Adds executive comments, byline)
By Sinead Carew
ORLANDO, Fla., March 23 Wireless broadband
network company LightSquared has won a deal to help Best Buy Co
Inc <BBY.N start its own wireless service, which could help
make up for possibly missing out on sales to T-Mobile USA.
The deals follows a similar agreement with Leap Wireless
announced earlier in the week and shows the Harbinger
Capital-backed company starting to score deals that could help
pay for its multibillion dollar investment in a high-speed
Chief Executive Sanjiv Ahuja said in an interview on
Wednesday that there will be more to come.
"You'll see a wide variety of customers being announced,"
Ahuja said on the sidelines of the CTIA wireless show where he
was a keynote speaker.
Ahuja said the company will need $14 billion over the next
8 years to build its high-speed network. He did not say where
that money would come from besides revenue from customers.
The business model for LightSquared, formed by high-profile
hedge fund manager Philip Falcone, is centered around selling
wholesale wireless services to companies such as Best Buy,
which then offer mobile services under their own brand.
The Best Buy announcement came days after T-Mobile USA, one
of LightSquared's biggest potential customers, chose to be
bought by AT&T Inc (T.N) instead of looking to LightSquared to
expand its access to wireless airwaves.
LightSquared executives said they had not given up on
signing up T-Mobile USA as a customer even though the carriers
have said the main reason for the merger was access to more
"If they needed spectrum before, they'll still need it
after (the deal)," said Ahuja. "They're potential customers
AT&T, however, would be restricted to no more than 25
percent of LightSquared spectrum because of U.S. government
Chief Marketing officer Frank Boulben said LightSquared has
already signed a deal with a maker of tablet computers and
smartphones that could start using LightSquared's network as
soon as the fourth quarter. He said the customer did not want
to be named for competitive reasons.
LightSquared is also in "advanced talks" with one of the
top three global consumer electronics companies about providing
connections for services such as wireless photo uploads and
wireless multiplayer gaming, Boulben said.
"We're in negotiations for 15 contracts," he said.
Ahuja said LightSquared and Best Buy would start a trial of
the retailers wireless service in early 2012.
Best Buy already has a deal to buy wireless services from
No. 3 U.S. mobile service Sprint Nextel Corp (S.N) and
Clearwire Corp CLWR.O in which Sprint has a 54 percent
Ahuja said Best Buy could offer services from different
networks on different devices or it could combine the
technologies on some devices.
Several analysts had hoped Ahuja would announce a network
agreement with Sprint at the CTIA. It could share Sprint's
wireless towers and possibly its network equipment with a view
to cutting costs, they said.
Such a deal could be completed as soon as late March,
according to a source familiar with the talks between Sprint
and LightSquared. Ahuja declined to acknowledge or comment on
The executive said during his keynote speech that there is
room for a company such as LightSquared, even in the fiercely
competitive U.S. mobile market, because it takes a new approach
and will not compete with its service provider clients.
"It opens up the wireless industry to new entrants who
could never before offer wireless service," Ahuja said
referring to Best Buy as an example.
(Reporting by Sinead Carew and Barbara Liston; editing by
Gerald E. McCormick, Derek Caney and Andre Grenon)