US operator Sprint confirmed its long-anticipated tie-up with LTE network start-up LightSquared, stating that the companies have entered into a “15 year agreement that includes spectrum hosting and network services, 4G wholesale, and 3G roaming.”
Under the terms of the deal, over an 11 year period LightSquared will pay Sprint around $9bn 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 $4.5bn.” The agreement is expected to lower network capital and operating expenses for LightSquared by more than $13bn over the next eight years, when compared to a stand-alone network build.
In a statement, Sprint said that LightSquared will pay it to “deploy and operate a nationwide LTE network that hosts L-Band spectrum licensed to or available to LightSquared.” Sprint will have the opportunity to purchase up to half of LightSquard’s expected capacity – “should Sprint elect to incorporate the L-Band LTE capability as part of its 4G offering.” It was also noted that the deal is “subject to LightSquared’s obtaining resolution and FCC approval of certain interference issues involving terrestrial use of the L-Band spectrum.” While Sprint is widely expected to announce plans to support LTE in the future, its only current network evolution path is based on WiMAX, in partnership with its affiliate Clearwire.
