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Sprint Officially Kills LightSquared 4G LTE Deal, Pays Back $65M

by Todd Haselton | March 16, 2012March 16, 2012 7:45 am PST

Sprint center

Sprint announced on Friday that it has officially canceled its plans to partner with LightSquared as it begins to roll-out its 4G LTE network. Sprint was been patient with LightSquared while the company has battled the FCC for approval to activate its network — pushing back LightSquared’s deadlines several times. Unfortunately, however, the FCC has ruled that LightSquared’s technology doesn’t play well with GPS networks. To LightSquared’s defense, the company has argued that its network was unfairly tested at levels much higher than it would actually operate.

“Sprint has been and continues to be supportive of LightSquared’s business plans and appreciates the company’s efforts to find a resolution to the interference issues impacting its ability to offer service on the 1.6 GHz spectrum,” Sprint said in a statement Friday. “However, due to these unresolved issues, and subject to the provisions of the agreement, Sprint has elected to exercise its right to terminate the agreement announced last summer. We remain open to considering future spectrum hosting agreements with LightSquared, should they resolve these interference issues, as well as other interested spectrum holders.”

“Late last year, both companies agreed to halt deployment design and implementation of LightSquared’s network to ensure that Sprint’s Network Vision project remained on schedule,” the company continued. “While unfortunate, termination of the agreement will have no impact on Sprint’s current customers and is not material to Sprint’s ongoing business operations. Network Vision remains on schedule and on budget, and we look forward to begin launching our 4G LTE network mid-year.”

Sprint has agreed to return $65 million in prepayments to LightSquared.

LightSquared’s CEO Sanjiv Ahuja argued earlier this year that the FCC’s failure to approve its network will harm the American public. Ahuja recently stepped down but remains on the board. The company has also said it will eliminate 45% of its workforce.

“For LightSquared, Sprint’s decision will enhance our working capital and provide more flexibility,” Doug Smith, chief network officer and interim co-chief operating officer of LightSquared, said.

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Sprint Elects to Terminate Spectrum Hosting Agreement with LightSquared

OVERLAND PARK, Kan. (BUSINESS WIRE), March 16, 2012 – Sprint (NYSE: S) today issued the following statement regarding the spectrum hosting agreement it signed with LightSquared in June 2011. Per the agreement, Sprint agreed to deploy and operate an LTE network capable of utilizing the 1.6 GHz spectrum licensed to or available to LightSquared. The agreement contained contingencies related to possible interference issues with LightSquared’s spectrum, including Sprint’s right to terminate the agreement if certain conditions were not met by LightSquared.

“Sprint has been and continues to be supportive of LightSquared’s business plans and appreciates the company’s efforts to find a resolution to the interference issues impacting its ability to offer service on the 1.6 GHz spectrum. However, due to these unresolved issues, and subject to the provisions of the agreement, Sprint has elected to exercise its right to terminate the agreement announced last summer. We remain open to considering future spectrum hosting agreements with LightSquared, should they resolve these interference issues, as well as other interested spectrum holders.

“Late last year, both companies agreed to halt deployment design and implementation of LightSquared’s network to ensure that Sprint’s Network Vision project remained on schedule. While unfortunate, termination of the agreement will have no impact on Sprint’s current customers and is not material to Sprint’s ongoing business operations. Network Vision remains on schedule and on budget, and we look forward to begin launching our 4G LTE network mid-year.

“Per the terms of the agreement, Sprint has returned $65 million in prepayments LightSquared made to cover costs that were not ultimately incurred by Sprint.”

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Todd Haselton

Todd Haselton has been writing professionally since 2006 during his undergraduate days at Lehigh University. He started out as an intern with...

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