Nokia Siemens wins $7 billion U.S. deal

HELSINKI (Reuters) - Nokia SIEMENS (SIE.XE)Networks (NSN) won an eight-year contract worth more than $7 billion in the United States, a deal analysts said could be the largest order ever placed in the mobile telecoms gear industry.

Under the agreement, NSN will build and operate a high-speed wireless network for Harbinger Capital's new LightSquared venture.

The deal comes a day after NSN said it would buy Motorola's telecom network equipment business for $1.2 billion.

Analysts said the deal, and the planned Motorola unit acquisition, would boost NSN in the North American market where so far it has struggled.

NSN generated just 6 percent of its revenue in the last quarter from the region.

"In the U.S., big operators have so far been skeptical to outsource their business. The deal is a great reference when this starts to change," said Hannu Rauhala, an analyst with Pohjola in Helsinki.

The deal is subject to final approval by both the Nokia Siemens Networks and the LightSquared boards.

The new nationwide Long Term Evolution (LTE) network will consist of some 40,000 cellular base stations and cover 92 percent of the U.S. population by 2015.

The LightSquared network build-out is expected to create more than 100,000 direct and indirect private sector jobs over the next five years, the company said in a statement.

LightSquared named former Orange executive Sanjiv Ahuja as its chairman and chief executive, and said it planned to raise up to $1.75 billion in debt and equity.

Harbinger Capital Partners and affiliates have invested $2.9 billion in the venture.

WATERSHED DEAL?

LightSquared, a newcomer to the U.S. wireless market, plans to build an open wireless broadband network using LTE, also known as fourth-generation (4G) technology.

"It has the potential to be a watershed moment in the U.S. wireless industry," said Dan Hays, partner at management consulting firm PRTM.

Hays said LightSquared was looking for mobile virtual network operator (MVNO) partners in wireless carriers, who could include Deutsche Telekom AG unit T-Mobile USA, MetroPCS, Leap Wireless and U.S. Cellular.

Well-known brands like Wal-Mart and Best Buy could also show interest, Hays said.

MVNOs are carriers that do not own infrastructure, but rent airtime from other network owners.

"We expect this announcement to be perceived as negative for Clearwire in particular and wireless providers in general as there is investor desire for fewer, not more, players in the space," Wells Fargo Securities analyst Jennifer Fritzsche wrote in a note to clients.

"We would note, however, that Harbinger is starting from nothing and it will take a long time before it is a presence in the market," she added.

NSN -- whose rivals include Ericsson, Huawei and ZTE -- is a 50-50 venture of Nokia and Siemens.

(Additional reporting by S. John Tilak in Bangalore; editing by Karen Foster, Vinu Pilakkott)