With AT&T and T-Mobile looking to merge to usurp Verizon Wireless as the top mobile provider in the United States, it’s no secret that number three Sprint is going to have to make some serious moves if it hopes to remain a major player in the mobile industry. Sprint recently inked a $1 billion deal for wholesale access to Clearwire’s WiMax network and now Bloomberg is reporting Sprint may be on the verge of a 15-year deal that will see billionaire Philip Falcone’s LightSquared pay up to $20 billion in a broad network sharing and built-out plan.
Citing “two people familiar with the talks,” LightSquared could pay Sprint up to $2 billion a year in the early stages of the contract to help pay for build-out of network services to support LTE 4G mobile broadband; once the network is built out, LightSquared would pay Sprint for access based on the number of customers LightSquared brings to the network, as well as their overall usage patterns.
Reports of Sprint and LightSquared talking about an LTE partnership have been circulating for months. Sprint has committed to investing $5 billion over the next three to five years to upgrade its network of terrestrial base stations to support 4G services on multiple frequencies; the result may be that Sprint’s network could support both LTE and WiMax services with a single set of equipment on a cell tower.
LightSquared has been planning to launch wholesale 4G LTE services in the United States, and claims it is on scheduled to introduced commercial services in early 2012. The company agreed last year to FCC conditions that require the company to offer service to 100 million Americans by the end of 2012 as part of the Obama administration’s national broadband initiative. By 2016, that number needs to climb to 260 million. LightSquared’s existing network design involves using high-powered signals between satellites and ground-based stations, and has drawn criticism from the likes of the National Telecommunications and Information Administration and the U.S. Air Force Space Command over concerns it will interfere with low-power GPS systems that use nearby frequencies.
Industry reports have also had LightSquared in discussions with AT&T about leasing LTE network capacity.