Sprint and LightSquared are both facing an incredibly tricky situation. Starting with Sprint, they were America’s first operator to launch a “4G” network, but they made the mistake of betting on WiMAX technology while the rest of the world chose to wait for LTE equipment to hit the market. It took a few years, but Sprint finally decided to switch to LTE after seeing that the industry couldn’t have cared less about supporting WiMAX. If everything goes according to plan, Sprint should have several cities blanketed with LTE coverage by the end of the summer. Now as for LightSquared, they announced their intent to build a 4G LTE network back in July 2010. The problem is that the spectrum they want to use to build said network sits way too close to the same spectrum that GPS devices use to get a satellite fix. Early testing showed that anything using GPS within 20 miles of a LightSquared cell tower simply stopped working.
Now how are these two companies related? LightSquared initially wanted to build their own network with the help of Nokia Siemens Networks, but in the summer of 2011 they changed their mind and signed a deal with Sprint. Under the terms of the agreement Sprint would build LightSquared’s network in exchange for $9 billion in cash. Sprint also agreed to become a LightSquared customer, with the added bonus that they would get $4.5 billion in “credits” to use LightSquared’s services. In other words, LightSquared and Sprint merged without merging. This contract came with a clause however, and a mighty big one at that. None of what we just explained would happen unless LightSquared got the FCC’s approval regarding their spectrum. Thing is the FCC has delayed their decision numerous times, which in turn has caused Sprint to delay working with LightSquared. Sprint’s obviously had enough of this and yesterday they announced that they’ll be giving LightSquared one more extension. After that, forget about it.
The new deadline? Mid-March.