Hedge fund Harbinger Capital bets big on 4G wireless

We don't usually associate hedge funds (hedge fund news) with taking full control of companies, bent on directly managing them. We tend to think of them as firms that invest and get out with a quick profit--unless they want to agitate against management. So how should we regard Philip Falcone's Harbinger Capital Partners' $500 million deal for SkyTerra Communications?

The purchase seems to be a risky bet that the fund can become a near-instant power in the emerging 4G wireless Internet market. Bloomberg notes that the hedge fund's filings with the Federal Communications Commission lays out "a plan to build 36,000 radio towers and send up two satellites. The spectrum Harbinger picked up in the deal could be worth up to $7 billion." 

But there are some daunting milestones it must hit. To get FCC approval, Falcone agreed to build a wireless network "that can serve 100 million Americans by the end of 2012. By 2016 the network must cover 260 million people. If Harbinger misses these targets, the FCC can declare its rights to use SkyTerra's spectrum 'null and void,' according to a March FCC filing." So the pressure is on.

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