How LightSquared’s Best Buy deal could kick off wireless-broadband mayhem

Best Buy, the electronics retailers, will begin offering mobile broadband to their customers in a service called Best Buy Connect. The service will use part of the spectrum from LightSquared’s LTE network, LightSquared CEO Sanjiv Ahuja announced during his keynote speech at CTIA Wireless 2011.

Ahuja did not reveal many details of the Best Buy Connect partnership, but did outline similar agreements with other companies, including providing 4G connectivity to Leap Wireless’s Cricket service and a joint partnership with Open Range to provide wireless access to rural areas.

Open Range will also provide access to LightSquared’s satellite-broadband services to the same rural areas, Ahuja said.

LightSquared provides wholesale access to its wireless broadband network — for now, it doesn’t appear interested in providing direct service to individual customers the way Sprint and AT&T do.

It also means all revenue generated by LightSquared can go directly into improving the network instead of subsidizing expensive smartphones, conducting expensive marketing campaigns, or running customer service.

Ahuja used many examples of industries who could purchase access to its network, but by far the most interesting of these was the potential for wired broadband providers, like cable operators, to extend their offerings to wireless. Cable companies like Cox, Comcast, and Time Warner Cable have long been interested in offering wireless service, but they’ve struggled to turn partnerships into marketable offerings.

Were wireless offerings cable providers to finally gain traction, it could definitely eat into the profits of AT&T, Verizon Wireless, and Sprint, at least for customers who only require local wireless access on their mobile devices. Combine a wireless phone service from a cable provider using LightSquared’s spectrum with Google Voice, the search giant’s Internet-calling service, you could easily see road warriors dropping expensive voice-and-data plans in favor of something more cost-effective.