14 DAY TRIAL // Mobile phone carrier Sprint and LightSquared have just announced a partnership aimed at the deployment of a 4G LTE network in the United States.
The 15 years agreement the two signed implies that Sprint will roll-out a 4G LTE network that hosts the L-Band spectrum LightSquared has already licensed.
Moreover, under the agreement, LightSquared will be able to sell its 4G broadband capacity to Sprint, other wireless carriers in the US, as well as to retail partners.
LightSquared will pay Sprint around $9 billion in cash for a period of around $9 billion in cash, involving spectrum hosting and network services, as well as LTE and satellite purchase credits that are currently valued at around $4.5 billion.
“The agreement also provides Sprint the opportunity to purchase up to 50 percent of LightSquared’s expected L-Band 4G capacity,” the two companies announced.
“The wholesale purchase credits will provide Sprint the option to obtain cost-competitive access to 4G capacity by offsetting Sprint’s purchases of 4G capacity from LightSquared, should Sprint elect to incorporate the L-Band LTE capability as part of its 4G offering.”
The agreement between the two is also expected to result in lower network capital and operating expenses for LightSquared by around $13 billion for the next eight years.
The 4G-LTE network deployment will be completed in 2014 or earlier, it seems.
“LightSquared expects the deployment of the nationwide 4G-LTE network to be completed more than one year ahead of the Federal Communications Commission (FCC) mandate to cover 260 million Americans by 2015,” the company announced.
The two also entered a 3G nationwide roaming agreement. LightSquared’s wholesale customers will benefit from access to Sprint's 3G network, and will benefit from 4G/3G data services when LightSquared launches its first 4G markets in 2012.
“This spectrum hosting agreement with LightSquared allows Sprint to more efficiently use its Network Vision platform,” said Steve Elfman, president of Network Operations and Wholesale for Sprint.
“In addition to improving our cash flow, it provides additional options and flexibility in how we meet our customers’ future capacity needs.”