US mobile operator Sprint Nextel is set to end an infrastructure-sharing agreement with LightSquared, possibly as soon as next week, according to a Bloomberg report citing two people familiar with the plan.
Spokesmen for both LightSquared and Sprint…
US mobile operator Sprint Nextel is set to end an infrastructure-sharing agreement with LightSquared, possibly as soon as next week, according to a Bloomberg report citing two people familiar with the plan.
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 to deploy and operate an LTE network that would host LightSquared’s L-Band spectrum, as well as “satellite purchase credits” valued at US$4.5bn.
The agreement originally had a deadline of 31 December 2011 for LightSquared to get regulatory approval to deploy its network.
This was subsequently extended twice, with a Sprint spokesman saying in January that LightSquared would have until “mid-March” to get regulatory approval.
But in February, the FCC said it would not lift its prohibition on LightSquared beginning commercial operations until the problems of LightSquared’s technology interfering with GPS systems remained unresolved.
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.
