It’s official: Sprint has cancelled their contract with LightSquared, will repay $65 million

danhesse

Two years ago a scrappy newcomer called LightSquared announced plans to revolutionize the American wireless industry. Their plan was simple: Build a nationwide 4G LTE network that other companies would then lease so they could sell access to consumers. Think of it this way, back in the 1990s there were hundres of internet service providers that used the phone line already connected to your house to provide you with connectivity. LightSquared wanted to be the wireless version of that. The thing is though, LightSquared ran into some problems. Their spectrum, which is in the 1.6 GHz band, sits way too close to the same spectrum that makes GPS work. Early testing showed that GPS was effectively knocked out in any device that happened to be within a 20 mile radius of a LightSquared cell tower. That’s not particularly good news. Back in July 2011 Sprint said that they would help build LightSquared’s network, assuming that they fix their GPS interference issues. They never did, so today Sprint has announced that the deal they signed with LightSquared last summer is now officially dead:

Sprint has been and continues to be supportive of LightSquared’s business plans and appreciates the company’s efforts to find a resolution to the interference issues impacting its ability to offer service on the 1.6 GHz spectrum. However, due to these unresolved issues, and subject to the provisions of the agreement, Sprint has elected to exercise its right to terminate the agreement announced last summer. We remain open to considering future spectrum hosting agreements with LightSquared, should they resolve these interference issues, as well as other interested spectrum holders.”

None of this is surprising of course, now the big question is how exactly will Sprint use their limited resources to transition from WiMAX to TD-LTE? Oh and before you even start thinking of an answer to that question, note that Sprint has also said that they’re going to return the $65 million that LightSquared gave them less than a year ago.

Ouch.

Back to top ▴