LightSquared (Reston, Va., U.S.A.), a wholesale-only integrated 4G-LTE wireless broadband and satellite network, and mobile operator Sprint Nextel (Overland Park, Kan., U.S.A.) announced on Thursday they have entered into a 15-year agreement that includes spectrum hosting and network services, 4G wholesale, and 3G roaming.
Under the terms of the agreement, during an 11 year period, LightSquared will make payments to Sprint of approximately $9 billion in cash for spectrum hosting and network services as well as LTE and satellite purchase credits, which are currently estimated to be valued at approximately $4.5 billion, according to LightSquared.
LightSquared will pay Sprint to deploy and operate a nationwide LTE network that hosts L-Band spectrum licensed to or available to LightSquared, according to the company. As a wholesale-only carrier with separate core network operations, LightSquared can sell its 4G broadband capacity produced through this spectrum hosting relationship to Sprint, other wireless carriers, and retail partners.
The agreement will also allow Sprint to purchase up to 50% of LightSquared’s expected L-Band 4G capacity, according to the company.
LightSquared expects the agreement to lower network capital and operating expenses by more than $13 billion over the next eight years in comparison with the cost of a stand-alone network build, say LightSquared. The company expects the deployment of the nationwide 4G-LTE network to be completed more than one year ahead of the U.S. Federal Communications Commission (FCC) mandate to cover 260 million Americans by 2015.
The agreement is subject to LightSquared's obtaining resolution and FCC approval of certain interference issues involving terrestrial use of the L-Band spectrum.