Bloomberg reported late Friday afternoon that it has seen a letter indicating that Sprint and the Harbinger Capital Partners LP -backed venture have inked a deal. The newswire says that the 15-year deal could be worth up to $20 billion and will see the pair "jointly develop, deploy and operate LightSquared's 4G LTE network."
This means Spring would get access to LightSquared L-Band spectrum for a 4G LTE deployment and would become a major customer of LightSquared. The operator is said to be in similar talks about network sharing with its 4G WiMax partner, Clearwire LLC (Nasdaq: CLWR). (see Sprint Gives Clearwire $1B Boost.)
Sprint can do this kind of network sharing because it is planning to deploy base stations that can support 3G CDMA, WiMax and -- potentially -- LTE over different frequencies. The operator hasn't yet said that it will actually support LTE; more news on that is expected this summer. A extensive network revamp for Sprint could take 12 to 18 months. (See Sprint CEO: More LTE Info Coming This Summer.)
Why this matters A network sharing deal with Sprint would be good news for the battered, Philip Falcone-supported LightSquared. The would-be 4G wholesale operator is mandated by the Federal Communications Commission (FCC) to cover 100 million people by the end of 2012 but hasn't started deploying terrestrial base stations yet.
A Sprint deal would likely be bad news for Nokia Networks . The vendor has a $7 billion infrastructure deal with LightSquared, but Sprint has said that it is using Alcatel-Lucent (NYSE: ALU), Ericsson AB (Nasdaq: ERIC) and Samsung Corp. for its "Network Vision" update. (See Sprint Ready to Leapfrog to Multi-Mode.)
The main stumbling block to any joint development is the so far unresolved issue of L-Band network equipment interference with earthbound GPS receivers. LightSquared just got an extension from the FCC to deliver its working group report on any interference found, so the clamor about this issue from the military, the GPS industry and other interested parties continues unabated. (See LightSquared Gets a GPS Extension.)
For more Read up on Sprint and LightSquared's 4G dance:
- Sprint/LightSquared Deal Expected Soon
- Sprint's Hesse on LightSquared & Clearwire
- Sprint's 4G Options in Flux
- LightSquared Needs Sprint in its Race to 4G
- What is Sprint Playing at With 4G?