As phones and wireless device become faster and more powerful, so increases the demand for networks and infrastructure to support them. The main telecom companies are expanding as best they can, but small privately-backed network companies like LightSquared have found opportunities to grab large amounts of the wireless network market.
Networks up to this point have been consolidated among the main providers, with seemingly insurmountable barriers to entry for new, less established companies. However, with the new 4G networks, infrastructure building is still on-going, leaving the market full of opportunity and potential.
LightSquared is taking advantage of 4G by offering a new choice for super-fast wireless internet–in select areas now, and with 95% coverage by 2015. With $7 billion in start-up cash from Harbinger Capital Partners, and Nokia Siemens to build the network, it looks realistic that they could do it.
Though such a large bankroll is uncommon with most of the ambitious new network providers, it’s LightSquared’s business model that really sets them apart. For starters, they won’t be offering 4G service to consumers.
Instead, LightSquared will be providing bandwidth to companies to offer 4G services to consumers. This allows them to reach a lot more people at once, leading to faster expansion. Offerings from LightSquared include white-label network branding–“Wal-Mart 4G wireless internet”–extra bandwidth to smaller telecoms like T-Mobile, and alternative internet sources for companies with wireless products such as the Nook from Barnes & Noble.
While this business model will not directly compete with the main network providers, it will still shake up the American wireless business structure. But LightSquared seesthis as a good thing, fostering more innovation and progress.