Due to unresolved interference issues, Sprint has terminated its 15-year 4G network agreement with LightSquared. We heard rumors this might be coming, and now, Sprint has made it official. The announcement comes after LightSquared was unable to find a resolution to interference issues found by the Federal Communications Commission which cited tests that show interference between LightSquared’s proposed network and GPS. The agreement between Sprint and LightSquared was originally signed in June 2011. Sprint has said it would be open to future partnerships with LightSquared if the interference issues are resolved.
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.”