It had to happen. Sprint is quitting the spectrum-hosting agreement it inked with LightSquared less than a year ago, opting to activate the clause giving it “the right to terminate the agreement if certain conditions were not met by LightSquared.”
The Kansas-based carrier also returned $65 million in prepayments LightSquared made to cover costs “that were not ultimately incurred by Sprint (click here for more information).
In the original agreement signed in June 2011, Sprint agreed to deploy and operate an LTE network capable of utilizing the 1.6 GHz spectrum licensed to or available to LightSquared. The agreement contained contingencies related to possible interference issues with LightSquared’s spectrum (click here for more information).
“Sprint has been and continues to be supportive of LightSquared’s business plans and appreciates the company’s efforts to find a resolution to the interference issues impacting its ability to offer service on the 1.6 GHz spectrum,” the Number Three U.S. wireless carrier said in a statement earlier today. “However, due to these unresolved issues, and subject to the provisions of the agreement, Sprint has elected to exercise its right to terminate the agreement announced last summer. We remain open to considering future spectrum hosting agreements with LightSquared, should they resolve these interference issues, as well as other interested spectrum holders.”
It continued, “Late last year, both companies agreed to halt deployment design and implementation of LightSquared’s network to ensure that Sprint’s Network Vision project remained on schedule. While unfortunate, termination of the agreement will have no impact on Sprint’s current customers and is not material to Sprint’s ongoing business operations. Network Vision remains on schedule and on budget, and we look forward to begin launching our 4G LTE network mid-year.”
"These regulatory delays are unfortunate because they will deprive the American people of the benefits of additional competition in the wireless industry," said Doug Smith, chief network officer and interim co-COO at LightSquared.
He continued "For LightSquared, Sprint’s decision will enhance our working capital and provide more flexibility.Sprint has been a valued partner to LightSquared and we look forward to working together in the future."