Under reported construction plans, LightSquared would place its equipment on Sprint’s towers, and the deal could enable Sprint’s customers to access LightSquared’s proposed 4G LTE network.
LightSquared’s plans to build an LTE network that covers 92% of the population by 2015 has been described as ambitious by many industry experts considering the company’s attempts to integrate mobile technology with satellite-based services. Construction is due to begin in 2012 after a $7 billion deal was signed with Nokia Siemens Networks to design and operate the network.
The Financial Times reports there is now uncertainty around Sprint’s relationship with Clearwire as a result. The company is building a similar high-speed mobile network based on WiMAX technology and Sprint has an agreement to acquire capacity on its proposed WiMAX offering.
Sprint’s position in the US market has been under threat in recent months following the announcement by AT&T to acquire T-Mobile USA for $39 billion, but the tie up with LightSquared could work in the favour of both companies. Many of the 40,000 base stations proposed in the network build-out could be integrated within Sprint’s infrastructure which would accelerate the roll-out and cut costs for LightSquared, and it also provides Sprint with a new 4G strategy.
LightSquared’s wholesale strategy has also attracted scepticism within the industry considering it plans to sell capacity on its network to mobile operators that lack the radio spectrum or finance to build its own network. This strategy could also be directly affected by AT&T and its plans to acquire T-Mobile USA, considering it will target the same wholesale customers as LightSquared, and it will have access to significantly larger radio spectrum.
