LightSquared Vows 50% Lower Data Bills

LightSquared’s proposed wholesale wireless network will let retail partners cut customers’ mobile-data costs in half, the company’s chief executive said.

Pricing will begin at $7 a gigabyte for the high-speed Internet service, which now has more than 30 partners including Sprint Nextel and Best Buy, LightSquared CEO Sanjiv Ahuja said. That may help lower monthly bills to about $50 a month from about $100, he said. While the promise of a lower-cost mobile service at a time of surging data demand is significant, an even larger issue for LightSquared is whether it can put all the pieces together soon enough, said Jonathan Chaplin, an analyst with Credit Suisse Group AG.

“Seven dollars isn’t bad, but it’s less disruptive than we expected,” said Chaplin, adding that the market rate is about $10 a gigabyte. Chaplin said he estimates the company has until April to get more cash. “Their real issue -- 100 percent of it -- is time, because they have so much debt,” he said.