In what could be a big blow to billionaire Philip Falcone's LightSquared, Sprint Nextel Corp. (S: Quote) intends to dump a 15-year network-sharing deal with the privately-held firm. According to the Wall Street Journal, the contract termination follows the Federal Communications Commission's plans to block LightSquared from developing its fourth-generation wireless network, dubbed 4G LTE.
The report elaborated that the FCC sought to address fears that LightSquared's service, which aimed to establish a ground network by employing satellite wireless airwaves, could interfere with GPS (Global Positioning Systems) signals.
LightSquared anticipates filing its defense with the FCC on March 16, 2012, the report added, citing a spokesman for LightSquared.
LightSquared had paid Sprint $65 million as part of a proposed 15-year infrastructure development and spectrum-sharing deal. The journal says Sprint may refund the prepayment.
The loss of the contract with Sprint, which was estimated to result in $13 billion of cost savings for LightSquared by the end of the decade, affects LightSquared's plans of installing 40 thousand cell towers. Also hit is LightSquared's ambition of rivaling AT&T Inc. (T) and Verizon Wireless (VZ) as a capacity provider.
Sprint Nextel is currently trading down by 0.71 percent, or 0.02 cents, at $2.78 per share on the NYSE.
by RTT Staff Writer
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