Did Sprint really get in bed with LightSquared?

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 (s S), 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 (s t) 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.