Sprint May Cancel LightSquared Deal

Posted by at 11:27 am on March 7, 2012

Sprint may simply drop its deal with LightSquared next week after its partner’s troubles grew too large, a leak indicated Wednesday morning. Bloomberg had heard from sources that Sprint’s extension to mid-March for the multi-billion dollar 4G deployment deal would likely be the last. Barring a last-minute reprieve, LightSquared would have to deploy its LTE network on its own after March 15.

Neither side has commented on the claims.

The incumbent Sprint, under the proposed deal, would help expand LightSquared’s network for the next 11 years, putting some of LightSquared’s LTE network nodes into its Network Vision cell sites. LightSquared would have to pay $9 billion over the course of those years, in addition to $4.5 billion in service fees from using Sprint’s locations.

An FCC determination that LightSquared was inherently interfering with GPS has been widely interpreted as fatal for the young network’s ambitions. Short of either persuading the FCC to change its mind, which may take months, the company would have to significantly reinvent or scale back its plans.

It has already settled in for a protracted fight, cutting 45 percent of its jobs and seeing an ousting of its CEO. Going without Sprint’s help could end the firm

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