Report: LightSquared Signs 15 Year Deal with Sprint

Upstart network LightSquared has signed a 15 year agreement with Sprint in principle to deploy its nascent nationwide satellite-based LTE network according to a report by Bloomberg citing the letter of intent sent to LightSquare investors earlier today at the close of the deal. Financial terms were not disclosed other than the worth of the deal being as much as $20 billion being paid to Sprint, but the letter goes on to state that LightSquared will receive assistance from Sprint in the deployment of its LTE network, while Sprint moves one step closer to selecting LTE as its successor network to CDMA with LightSquared’s help by using its spectrum for LTE access on its own network by sharing expansion and equipment costs.

At issue currently is the viability of LightSquared’s satellite-based network, as multiple independent tests have found that the L-band spectrum leased to the company as the backbone of the network severely interferes with GPS transceivers and transponders for both consumers and military usage, with GM, John Deere and even government officials registering complaints that the network is a hazard and must not be allowed to deploy in its current form without extensive testing to ensure that it will not interfere with GPS services.

Currently, LightSquared is the subject of an FCC inquiry following the failure to turn in the results of its own internal test report, which is now expected on July 1st after the company requested an extension to file the report. Should the company’s own findings match those of the independent tests, it faces losing its waiver and risks losing its license to operate. The carrier deal with Sprint is thought to help LightSquared in order to avoid losing the waiver by using Sprint’s expertise in filtering, spectrum holdings and current network initiative to speed up deployment in order to meet its current coverage targets, but the new deal still hinges on the FCC’s positive conclusion of the LightSquared report.

LightSquared is the product of billionaire hedge fund manager Phillip Falcone, with his Harbinger Capital Partners hedge fund being the majority owner of the company. In addition to the Sprint deal, LightSquared also announced that it would open up sales of network access to governments as a backup solution in case of the loss of terrestrial network access due to natural or man made disaster for first responder organizations, though further information on the offering would not be made available at this time.