Two high-profile companies with major hurdles to overcome have teamed up; Sprint and LightSquared have signed a network-sharing deal that promises to transform the 4G wireless landscape.
Anticipated for some time, the 15-year deal gives Sprint $9 billion in cash -- handy news on the very day that the company announced a wider loss than anticipated -- and about half that amount in credits for LTE and L-band satellite equipment.
This is part of Sprint’s so-called “Network Vision” plan, a diversification of wireless utilization that allows the company to use the best of various spectra and standards such as the existing CDMA and upcoming LTE. The details of this deal come as reassuring news for Clearwire and its investors, who may have feared that Sprint was abandoning the 4G WiMax provider completely in favor of LightSquared’s LTE.
LightSquared has been moving fitfully since the company began its ambitious plan to offer a network of combined satellite and wireless broadband that will cover over 250 million Americans, most promisingly in rural and other under-served areas. Changes in the company’s approach and technology have been continually complicated by complaints of interference (most notably among GPS equipment), which have been borne out in testing.
For the time being, the assurances from LightSqaured have overridden the concerns of aviators, emergency personnel, and others who have experienced considerable disruption from LightSquared’s technology. The FCC has so far shown notable support for LightSquared, essentially telling GPS users that their technology must be strengthened and modified to make way for the as-yet unproven network, and one can assume that Sprint will begin to lend its weight to the debate as well.
"We believe LightSquared, in cooperation with the FCC and adjacent spectrum users, is taking proactive steps to address and resolve these issues in a timely manner," Steve Elfman, president of network operations for Sprint, said in a statement.
Getting access to Sprint equipment is estimated to allow LightSquared to save some $23 billion in equipment and operating costs in upcoming years, and allow the development of the company’s network to proceed “at an unprecedented pace," according to LightSquared Chairman and CEO Sanjiv Ahuja to CNET. However, Ahuja also goes on to confirm that LightSquared is maintaining its schedule of testing throughout the next year, with a commercial launch sometime before the end of 2012.
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