Sprint and LightSquared decided on a 15 years deal that will give Sprint $9 billion over the first 11 years. Sprint will provide LightSquared with spectrum hosting, LTE network hosting services and on a lower scale, satellite purchase credits. The deal also stated that Sprint will have the option to purchase up to 50 percent of LightSquared’s 4G LTE capacity while LightSquared will be allowed to use Sprint’s existing 3G network for roaming data services.
The deal offers tremendous benefits to both companies by dividing the cost of deployment. LightSquared announced that the joint network deployment will save $13 billion in capital investment over the next eight years and be a significant step forward in its ambitious goal of covering 260 million Americans by 2014.
Originally, the discussion was oriented towards increasing Sprint’s 4G WiMAX network but the market pressure for LTE adoption pushed Sprint to adopt a dual 4G technology implementation. Sprint announced that it will unveil its 4G Network Vision Plan and Strategy on October 7, at its inverstors’ day. This will be the opportunity to learn more about how Sprint will manage the WiMAX/LTE dual offering.
LightSquared’s press release is available here.