Sprint announced they struck up a 15 year deal with LightSquared, a wireless broadband communications network company with plans to develop a 4G network. However, LightSquared first needs Federal Communications Commission approval, and here’s why.
LightSquared LTE implementation plan interfered with aircraft and personal GPS functions. Therefore, the government put a ban on funding the company until these problems were resolved. The company said they had no intention to interrupt GPS signals and promised to shift its spectrum plan to rid of GPS interference.
LightSquared agreed to pay Sprint $9 billion cash over the course of 11 years and $4.5 billion in LTE and satellite purchase credits—which they can use to gain capacity from LightSquared.
Overall, the deal will save LightSquared more than $13 million and give Sprint a 4G LTE network in 2013, a year earlier then they planned to get one.
Sprint shares dropped 15%, and their stock fell as much as 20% on the New York Stock Exchange. This decline was the largest they’ve had since December 2008. Obtaining a 4G network couldn’t hurt!
So will LightSquared save Sprint? We can only hope for those great unlimited data plans! It seems like the one thing that is really hurting their business is the fact that they do not carry the iPhone. We’ll see what Sprint comes out with for their 4G network, but we are all hoping for Apple!
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