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Sprint to walk away from LightSquared deal, refund $65m

updated 09:10 pm EDT, Thu March 15, 2012

Carrier finally takes expected move

Corroborating recent leaks, Sprint has reportedly decided to put an official end to its collaboration with wireless broadband startup LightSquared. Unnamed sources have told (sub. required) The Wall Street Journal that Sprint will formally move to terminate the contract on Friday and refund LightSquared's $65 million prepayment.

The leak sheds light on the growing troubles that the startup faces, after its proposal for a terrestrial 4G LTE network was rejected by the FCC due to interference with existing GPS equipment. The company has made an effort to persuade the FCC and other regulators to reconsider, arguing that GPS hardware lacks sufficient filters to avoid interference with neighboring spectrum that has been lawfully allocated for other uses.

As part of a 15-year contract, Sprint committed to assist LightSquared in its LTE network expansion plans. The startup estimated that such deal would have saved approximately $13 billion compared to the cost of deploying the 40,000-tower network without help.

Amid lingering uncertainty surrounding the FCC decision and outside investments, LightSquared recently moved to halve its workforce and replace the CEO.

Sprint has yet to publicly confirm plans to drop its partnership, however details are expected to be revealed at the end of the week.



By Electronista Staff
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