How Many 4G Networks are Too Many?

LightSquared could spend between $1.25 billion and $1.5 billion on deploying its LTE network in the United States in 2011, according to Avian Securities LLC .

Catharine Trebnick, Avian's senior research analyst, estimates that LightSquared could start service in initial markets as early as June or July this year with nine Midwest markets expected to be lit up this year as well.

So a reasonable observer might ask "how many national 4G networks are too many?" Given that Verizon, AT&T, Sprint, Clearwire, T-Mobile USA and MetroPCS all plan or are building such networks now, LightSquared would make seven such national networks (whether each network is "4G" now is a marketing question, not a "technology" question, now that the International Telecommunications Union has said all such networks are, in fact, "4G," even if none of them actually matches the ITU's own standards).

Based on past experience, seven national mobile broadband networks is likely an unstable market condition. One might argue that three to four operators is about as many as can profitably exist in the U.S. market. Virtually nowhere are five to seven operators considered viable.

So consolidation is inevitable.

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