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Sprint to confirm LightSquared deal on July 28

updated 06:30 pm EDT, Wed July 13, 2011

Sprint waits for Q2 results to back Lightsquared

Sprint will wait until it reveals its latest fiscal results to confirm its LightSquared sharing deal, insiders explained Wednesday. The cell carrier should use its July 28 financials to confirm that LightSquared will be paying to use Sprint's cell sites while it grows its 4G LTE network. Terms weren't divulged to CNET but are rumored to involve $20 billion over 15 years.

The willingness to let LightSquared in stems mostly from Sprint's need to fund its Network Vision project. The move will consolidate CDMA, 3G, and 4G all into individual sites and will have the room for Sprint to switch to LTE if it decides to go that route. Sprint is spending between $4 billion to $5 billion to fund the upgrade and, while it will bank $10 billion to $11 billion in saved expenses, will want to recoup the investment as quickly as possible.

It may also want to reduce its dependence on Clearwire's WiMAX network. The struggling 4G-only service has been a financial risk for Sprint given the larger company's 54 percent. Were it to go bankrupt, it could create a ripple effect and leave Sprint without a key partner. LightSquared could serve as at least a backup.

LightSquared will have the advantage of large investments from its parent Harbinger Capital but is looking to offset as many of the costs as possible. A deal with Sprint also gives it much better coverage instead of having to set up separate towers in every area. It has already faced trouble and is trying to resolve GPS interference issues with its choice of frequencies.



By Electronista Staff
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