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Lights Out for NSN's $7B LTE Deal

Nokia Siemens Networks had struck a $7B LTE network deal with LightSquared. Now it's gone

July 29, 2011

2 Min Read
Lights Out for NSN's $7B LTE Deal

When announced in July 2010, Nokia Networks 's $7 billion, eight-year Long Term Evolution (LTE) network deal with LightSquared was believed to be the single biggest mobile networks deal ever struck. (See NSN Lands $7B LTE Deal in US .)

But now that LightSquared has essentially outsourced its LTE network to Sprint Corp. (NYSE: S), NSN is left with just a shred of that original agreement and, to make matters worse, some of its fiercest rivals will benefit from LightSquared's change of heart. (See Sprint's $13.5B Jump to LTE With LightSquared.)

That's because the original deal was for radio access network (RAN) and core network equipment and a host of associated services. Now, though, Sprint is building out the RAN, and already has a trio of vendors -- Alcatel-Lucent (NYSE: ALU), Ericsson AB (Nasdaq: ERIC) and Samsung Corp. -- with which it is building out its "Network Vision" multi-mode infrastructure. (See Sprint Ready to Leapfrog to Multi-Mode.)

That leaves NSN with a core network deal -- evolved packet core (EPC), packet transport and various Service Provider Information Technology (SPIT) elements -- that, while no value has been placed on it, will be worth only a fraction of the original agreement.

NSN isn't commenting directly on the fate of the radio access portion of the $7 billion deal, saying only the following in an email to Light Reading Mobile: "LightSquared has a signed agreement with Nokia Siemens Networks for its independent Core network, which includes design, installation, testing and systems integration. In doing so, Nokia Siemens Networks will play a central role in LightSquared’s rollout of 4G-LTE. This is an extension of the two companies’ partnership as Nokia Siemens Networks has been actively involved in helping LightSquared build its first markets and enabling base station development activity."

NSN had been hoping to be a much bigger player in the U.S. market, with its acquisition of Motorola's wireless network assets and the original LightSquared deal as the foundations for a brighter future in North America. The Motorola deal is done, and generating revenues, but the multibillion-dollar next-generation network headline engagement is now just a memory. (See Moto Assets Help NSN's Q2 Growth.)

— Ray Le Maistre, International Managing Editor, Light Reading

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