Sprint terminates LightSquared deal

19 March 2012 |


Sprint has terminated its $13.5 billion spectrum hosting and network services agreement with troubled telco LightSquared.

The move had been widely anticipated since February when the FCC revoked its conditional approval of LightSquared’s LTE network.

A condition of the 11 year agreement, finalised between the two companies in July 2011, was that LightSquared obtained FCC approval of “certain interference issues” involving terrestrial use of satellite spectrum.

LightSquared had failed to meet its original deadline in December 2011 for this condition and could not meet its extended deadline of March 15.

“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 1.6GHz spectrum,” said a statement on Sprint’s website.

Sprint has returned $65 million in prepayments made by LightSquared, which may prove useful considering the company’s troubled financial situation. “For LightSquared, Sprint’s decision will enhance our working capital and provide more flexibility,” said Doug Smith CNO and interim co-CEO of LightSquared.

After failing to pay satellite company Inmarsat $56.25 million for the use of its spectrum, LightSquared laid off 330 members of staff to cut costs. It is also in search of a replacement for former CEO Sanjiv Ahuja, after he stepped down last month.

Despite all these setbacks, LightSquared has said that it is still committed to continuing to pursue its right to use its spectrum as originally approved by the FCC.