updated 06:35 pm EDT, Fri June 17, 2011
Companies to share cost of network expansion
LightSquared, a wireless provider backed by Harbinger Capital, has reportedly signed a deal with Sprint, outlining terms for cost sharing as the companies collaborate to launch and expand a 4G LTE network in the US. Recent rumors suggest the deal may be worth a total of $20 billion and span 15 years, during which time Sprint will be able to take advantage of LightSquared's wireless broadband service.
"LightSquared and Sprint will jointly develop, deploy and operate LightSquared's 4G LTE network," Harbinger co-founder Philip Falcone told investors in a letter, which was posted by Bloomberg. "Sprint will become a significant customer of LightSquared's 4G LTE network."
The recent rumors suggested LightSquared will pay Sprint approximately $2 billion each year in the beginning of the deal, however in later years the compensation will vary based on subscriber numbers.