Sprint and LightSquared recently announced a 15-year deal that will give Sprint $9 billion in cash in exchange for spectrum hosting and LTE network services as well as LTE and satellite purchase credits it will provide LightSquared. The deal is expected to speed up the completion of LightSquared’s 4G LTE network. Under terms of the agreement, Sprint has the option of purchasing 4G capacity from LightSquared. With this option, Sprint gets the option of moving beyond its current 4G offering, WiMAX, to LTE.
Sprint Nextel and LightSquared Announce Spectrum Hosting and Network Services Agreement
RESTON, Va. & OVERLAND PARK, Kan. (BUSINESS WIRE), July 28, 2011 - LightSquared™, the nation’s first wholesale-only integrated 4G-LTE wireless broadband and satellite network, and Sprint Nextel (NYSE: S) announced today they have entered into a 15-year agreement that includes spectrum hosting and network services, 4G wholesale, and 3G roaming.
This spectrum hosting arrangement leverages Sprint’s investment in its innovative, multi-year Network Vision plan. Under the agreement, LightSquared will pay Sprint to deploy and operate a nationwide LTE network that hosts L-Band spectrum licensed to or available to LightSquared. As a wholesale-only carrier with separate core network operations, LightSquared can sell its 4G broadband capacity produced through this spectrum hosting relationship to Sprint, other wireless carriers, and retail partners.
Under the terms of the agreement, during an 11 year period, LightSquared will make payments to Sprint of approximately $9 billion in cash for spectrum hosting and network services as well as LTE and satellite purchase credits which are currently estimated to be valued at approximately $4.5 billion. The agreement also provides Sprint the opportunity to purchase up to 50 percent of LightSquared’s expected L-Band 4G capacity. The wholesale purchase credits will provide Sprint the option to obtain cost-competitive access to 4G capacity by offsetting Sprint’s purchases of 4G capacity from LightSquared, should Sprint elect to incorporate the L-Band LTE capability as part of its 4G offering.
This agreement is expected to lower network capital and operating expenses for LightSquared by more than $13 billion over the next eight years in comparison with the cost of a stand-alone network build. LightSquared expects the deployment of the nationwide 4G-LTE network to be completed more than one year ahead of the Federal Communications Commission (FCC) mandate to cover 260 million Americans by 2015.
LightSquared has also entered into a 3G nationwide roaming agreement with Sprint. With access to Sprint’s 3G nationwide network, LightSquared’s wholesale customers will be able to offer combined 4G/3G data services as soon as LightSquared launches its first 4G markets in 2012.
“This spectrum hosting agreement with LightSquared allows Sprint to more efficiently use its Network Vision platform,” said Steve Elfman, president of Network Operations and Wholesale for Sprint. “In addition to improving our cash flow, it provides additional options and flexibility in how we meet our customers’ future capacity needs.”
“This agreement gives LightSquared a rapid and cost-effective radio access network build,” said LightSquared Chairman and CEO Sanjiv Ahuja. “With our next generation satellite already operational and our independent core network build underway, LightSquared is now well positioned to meet the fast-growing market demand for wireless broadband services with its wholesale-only integrated 4G-LTE and satellite network.”
The agreement is subject to LightSquared's obtaining resolution and FCC approval of certain interference issues involving terrestrial use of the L-Band spectrum.
“We believe LightSquared, in cooperation with the FCC and adjacent spectrum users, is taking proactive steps to address and resolve these issues in a timely manner,” said Elfman.
So Sprint will have 5 nation wide networks if this goes through? Hummmm....
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Interesting to say the least. So Sprint has 2G, 3G, just under half of Clearwire, Half of Light Squared, a Wimax 1 network, and now a 4G LTE network too. That is 6 networks or parts of and a Satellite national broadband as well as whatever is still existing from the Nextel network. I see about 8 networks here or substantial portions thereof of 8 networks anyway.
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