Although Sprint brought us the first 4G network on a national carrier, AT&T and Verizon’s choice to go with LTE as their 4G technology has made critics skeptical of Sprint’s early investment in WiMax. In rather unexpected news, a wireless data provider known as LightSquared has just struck a reported $20 billion deal with Sprint to deploy and offer a 4G LTE network. According to the report from Bloomberg, LightSquared wrote a letter to their investors claiming that: “LightSquared and Sprint will jointly develop, deploy and operate LightSquared’s 4G LTE network … Sprint will become a significant customer of LightSquared’s 4G LTE network.”
This is very interesting news indeed. What’s even more interesting is that it appears LightSquared is actually paying Sprint the $20 billion, not the other way around.
This is great news for Sprint, who was in a rather difficult financial position trying to protect their investment in WiMax. The strange part is that it appears they’re practically being paid to use someone else’s LTE network. What is LightSquared getting out of this? I can imagine getting help rolling out their towers from a national carrier is nice, but is that worth $20 billion?
Then, someone pointed out the following headline from nextgov.com: Key House lawmaker asks FCC to kill LightSquared network.
According to the article, Rep. Mike Turner, R-Ohio, chairman of the House Armed Services Subcommittee on Strategic Forces, called on FCC to rescind the conditional operational waiver it granted LightSquared in January. He cites that the LightSquared LTE network operates a particular radio spectrum dangerously close to public safety GPS systems, radios, dispatch networks, and emergency 911 calls. The claim is that operating this LTE network interferes with these public safety systems. The date on that article is actually two days before LTE’s announcement to work together with Sprint. This is not a coincidence.
Here’s what many people don’t realize: Sprint bought Nextel years ago, only to find they’re now stuck with a failing network . They’ve tried to pawn it off many times, but no one was interested. This has been hurting Sprint financially for years. Guess what frequency Nextel’s iDen network operates on? 800 Mhz. That means Sprint has all this spectrum they regretted buying, already commissioned for wireless consumer telecommunication, and it’s exactly the same spectrum LightSquared needs to continue operating! Therefore, it is in LightSquared’s best interest to actually pay Sprint $20 billion to not lose their network, all the while allowing Sprint to have access overnight to an LTE network they can continue rolling out instead of starting from scratch.
How’s that for a twist of irony? The very Nextel network that everyone thought was killing Sprint might just end up giving them a healthy advantage.
Meanwhile, all you WiMax users have no fear – Sprint has no plans at this time to cut off the WiMax network. They will likely stay active until long after your current contract and phone is finished. They might not aggressively roll out new 4G WiMax towers anymore, but the truth is that was already happening due to Sprint’s rocky relationship with WiMax provider Clearwire.
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