Comment (0)Under the terms of the deal, LightSquared will pay Sprint about $9 billion in cash, and provide "satellite purchase credits" currently valued at about $4.5 billion, to deploy and operate a nationwide Long Term Evolution (LTE) network that hosts L-Band spectrum licensed to the new operator. Sprint CFO Joe Euteneuer said on the company's second-quarter earnings call that the Harbinger Capital Partners LP -backed operator has already paid Sprint $290 million towards the network. (See Sprint Confirms LightSquared Deal, Losses Grow.)
"The spectrum-hosting deal with LightSquared is one more piece to our network evolution," said Sprint CEO Dan Hesse on the earnings call.
Sprint will deploy the LTE capabilities using the "Network Vision" multi-mode base stations from Alcatel-Lucent (NYSE: ALU), Ericsson AB (Nasdaq: ERIC) and Samsung Electronics Co. Ltd. (Korea: SEC) that can support LTE, WiMax, 3G and push-to-talk over CDMA. (See Sprint Ready to Leapfrog to Multi-Mode.)
Unanswered questions Sprint isn't saying yet when it expects to be ready with its initial LTE markets using the LightSquared spectrum. The Federal Communications Commission (FCC) , however, has mandated that LightSquared cover 100 million Americans by the end of 2012.
Sprint promises to update its Network Vision strategy on October 7. (See What Will Sprint Reveal of its 4G Plans?)
The GPS interference issue stills hangs in the air for Sprint and LightSquared as well. "We will not turn on the network until this issue is resolved," Hesse said, noting that Sprint itself is a GPS provider.
In fact, under the terms of the deal, Sprint has the right to terminate the agreement with LightSquared if certain conditions aren't met, Sprint CFO Euteneuer noted.
LightSquared has proposed moving lower in its L-Band frequencies to alleviate the GPS issues. Its plan is currently with the FCC. (See LightSquared Spends $100M on Proposed GPS Fix and LightSquared Claims It Has Answer to GPS Problem.)
CEO Hesse also wouldn't comment on whether Sprint is in similar network-sharing talks with Clearwire, beyond reiterating that Sprint has a wholesale deal through 2012 with its WiMax partner.
Sprint also confirmed that it could sign up other partners for network sharing. Hesse and Euteneuer, however, didn't offer any names on the call.
For more Read up on Sprint's path to LTE:
- Sprint Maintains Silence on LightSquared Deal
- Network Polygamy Ahead for Sprint?
- LightSquared Reportedly Seals Sprint Deal
- 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?
