Lightsquared changes plans because of GPS clash

US Telecom start-up Lightsquared has had to come up with new plans to build its high-speed wireless network because its technology interferes with GPS.

Philip Falcone and his Harbinger Capital Partners’ have gambled billions on the success of Lightsquared and now it has to use a different block of wireless airwaves for its network than originally planned.

The outfit still needs billions of dollars more funding to build its network and might suddenly find that investors are not returning their calls, some analysts told Reuters .

Lightsquared needed to launch fairly soon but now it will be delayed until next year.

Harbinger has put $3.1 billion into Lightsquared and is the largest single equity investor.

Lightsquared has written a cheque to satellite provider Inmarsat for an additional $40 million to prepare the alternative spectrum for use by early next year on top of its earlier agreement to pay Inmarsat $337.5 million.

Under the revised plan, Lightsquared’s CEO Sanjiv Ahuja told Reuters that customers would be able to test its service in early 2012 and launch commercial services around mid 2012.

But there is no guarantee that the new spectrum band it plans to use would not kill off GPS services. Ahuja said that they will be “largely free” of interference from more than 99 percent of GPS devices. It expects to find a way to fix the interference with remaining gear.

Ahuja said he would also try to fix the larger GPS interference problems in the original spectrum in time to use that spectrum in a few years.

GPS operators are still unhappy with the plan fearing that the alternative spectrum would still interfere with “many critical GPS receivers.”

Under the new plan, Lightsquared will use half the power to transmit wireless signals in its network to provide additional protection to GPS.