Sprint Scuttles LightSquared Deal

Sprint Corp. (NYSE: S) said Friday it has terminated its spectrum hosting deal with LightSquared and will return $65 million in prepayments that the carrier never spent. (See Sprint Kills LightSquared Deal.)

Sprint inked the deal in June 2011 and made plans to build and operate a Long Term Evolution (LTE) network on the 1.6GHz spectrum licensed or available to LightSquared. But LightSquared's fortunes took a bad turn when the Federal Communications Commission (FCC) blocked LightSquared's proposal because of GPS interference issues.

Sprint said it's executing a contingency that allows it to terminate the deal if LightSquared can't live up to the conditions of the agreement.

Why this matters
Sprint's decision isn't unexpected, but it takes away one of LightSquared's key partners as it looks to resolve its interference problems. Sprint left the door open to a new spectrum sharing deal should LightSquared find an allowable fix, but noted that the decision to back out "is not material" to Sprint's ongoing business operations. Sprint added that its Network Vision plan is on schedule, and it expects to launch its own LTE network by mid-year.

LightSquared, meanwhile, is fighting for its life. Its original CEO and a chunk of its workforce is now gone as the company appears to be gearing up for possible legal action against the FCC.

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— Jeff Baumgartner, Site Editor, Light Reading Cable

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