European vendor Nokia Siemens Networks has revealed that it stopped work last year on LightSquared’s planned wireless broadband network.
An NSN spokesman said: “Since last year, while we have a contract with LightSquared, they previously asked us to…
European vendor Nokia Siemens Networks has revealed that it stopped work last year on LightSquared’s planned wireless broadband network.
An NSN spokesman said: “Since last year, while we have a contract with LightSquared, they previously asked us to put our activities related to the network build on hold while they resolve the GPS issues.”
In October 2010, the companies announced an eight-year agreement worth US$7bn that would see NSN install and operate LightSquared’s planned LTE network. However, a source close to the deal told SatelliteFinance that no future business with LightSquared had been built into NSN’s forecasting for some time.
Separately, US mobile operator Sprint Nextel is reportedly set to end an infrastructure-sharing agreement with LightSquared, possibly as soon as next week.
The news was reported by Bloomberg, citing two people familiar with the deal. Spokesmen for both LightSquared and Sprint declined to comment.
Under the agreement made by the companies in July 2011, LightSquared would pay Sprint US$9bn, as well as “satellite purchase credits” valued at US$4.5bn, to deploy and operate an LTE network that would host LightSquared’s L-Band spectrum.
The agreement originally had a deadline of 31 December 2011 for LightSquared to get regulatory approval to deploy its network.
But LightSquared has struggled to get this approval, due to the interference caused by its technology on GPS systems. In February, the FCC said that it would not lift its prohibition on LightSquared beginning commercial operations while the GPS interference issue remains unresolved.
Sprint extended the deadline for LightSquared twice, with a Sprint spokesman saying in January that LightSquared would have until “mid-March” to get approval.
Wells Fargo analyst Jennifer Fritzsche said that LightSquared had so far paid Sprint US$319m. Citing a contact, she said that Sprint would only be required to return around US$70m, given the expenses and other commitments the mobile operator has put into the network deployment.
Fritzsche said that the news could impact Sprint’s longer-term spectrum requirements.
“When the deal was originally announced, part of the agreement called for Sprint to be able to use LS spectrum for longer term as it moves to LTE. In the absence of other spectrum sources, we believe Sprint will continue to have to find ways to work with its main spectrum partner, Clearwire,” Fritzsche said.
