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Summary:

LightSquared, the company trying to build a wholesale 4G wireless network using a mix of FCC waivers, satellite spectrum, a to-be-built terrestrial network and a helluva lot of gumption may have signed a deal with Sprint.

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LightSquared, the company trying to build a wholesale 4G wireless network using spectrum gained through a mix of FCC waivers, satellite airwaves, a yet-to-be-built terrestrial network and a helluva lot of gumption may have signed a deal with Sprint, according to a report out from Bloomberg. The article quotes a letter sent by Harbinger Capital Partners’ head Phil Falcone to investors in Harbinger Capital Partners’s fund, which holds a huge stake in LightSquared.

Falcone told Harbinger Capital Partners investors about the accord in a letter today obtained by Bloomberg News. The companies were discussing a deal valued at as much as $20 billion, people familiar with the matter said earlier this month.

“LightSquared and Sprint will jointly develop, deploy and operate LightSquared’s 4G LTE network,” according to the letter. “Sprint will become a significant customer of LightSquared’s 4G LTE network.”

I emailed Sprint for comment, but have not heard back. Sprint is in the middle of a network modernization plan that could also see it transition from using WiMAX as its 4G standard to LTE. While it makes sense that Sprint would have to do something as its existence is threatened by AT&T’s attempts to gobble up T-Mobile, taking on LightSquared’s myriad issues seems like someone running away from a murderer right into the arms of a mugger.

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  1. Yes, LightSquared has issues with the spectrum it wants to use for LTE, but what if Sprint decides to license its 4G-capable spectrum to LightSquared as part of the deal? (I don’t know if that is possible)

    Their WiMax is horrible. I have a Sprint 3G/4G modem (U301), and in the last two months, I have visited 4 locations that their map says has 4G coverage. I have not been able to connect on any of them. When I get home from the current trip, I am canceling my Sprint 4G modem service, and will return when they have an LTE plan.

    1. @KenG
      This is Virgin Tech which will only get better over time and more palatable over time. LTE is faster no doubt, but how many people are signed up and using it? Witness Verizon giving away free Wifi Hotspot ability with the purchase of a Thunderbolt. You can also get Thunderbolt for pennys on the dollar online. Sprints advantage is clear, “All-You-Eat-Data!” And if you are stationary it works well for most (6 mb/s -9 mb/s).

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