Sprint is reportedly planning to end its network-sharing agreement with LightSquared as early as next week, another setback for the struggling company.
The decision comes ahead of a mid-March deadline Sprint set for LightSquared to sort out problems with GPS interference, problems which drove the FCC last month to pull the company’s waiver, leaving its wireless plans dead in the water.
Sprint agreed in February to push out the deadline to this month to give LightSquared extra time to come up with a solution to the GPS mess.
Unnamed sources told Bloomberg that Sprint doesn’t plan to give LightSquared any more extensions.
A spokesman for Sprint declined to comment on the report. LightSquared also declined to comment.
The cancellation of the network-sharing contract would be the latest blow for LightSquared, which was depending on Sprint to host its LTE network. The two companies forged a 15-year agreement last July for Sprint to deploy and operate LightSquared’s LTE network on its equipment.
LightSquared planned to pay Sprint $9 billion in cash and $4.5 billion in credits for service during an 11-year period as part of the deal, which would have saved LightSquared an estimated $13 billion over the cost of building its own standalone network.
But the arrangement ran into trouble when the launch of LightSquared’s network was delayed by its inability to fix the GPS problem, which led to Sprint’s original deadline extension.
LightSquared’s planned LTE network ran in spectrum next to airwaves used by GPS receivers. Government tests found that many of the sensitive devices were knocked out by LightSquared’s transmissions.
The NTIA decided there were “no practical ways” to address the issue, prompting the FCC to bar LightSquared from using its spectrum for its proposed wholesale mobile broadband service.
LightSquared is still working to find a way to move forward, but it hasn’t announced any concrete plans to advance its network. CEO Sanjiv Ahuja resigned last month, and the company has laid off about 45 percent of its staff to preserve cash. LightSquared also skipped a $56.3 million payment to Inmarsat for the use of the satellite provider’s spectrum.
LightSquared’s downward spiral also had an impact on its vendors and the 30-plus customers who signed up for the wholesale network. Nokia Siemens has halted work on the project, and LightSquared customer FreedomPop jumped ship, signing to use Clearwire’s WiMAX network instead.
Filed Under: Industry regulations