SellTower Signals
LightSquared & Sprint:The New Odd Couple
Bloomberg reported June 18 that Sprint and LightSquared finally ink the highly anticipated Radio Access Network (RAN) share pact. This agreement should signal the start of the Sprint Network Vision upgrade program as well as an acceleration in the LightSquared network deployment. The value of the deal is estimated at $20 billion over 15 years which explains why the parties have taken their time to get the agreement done correctly. This pact pares a conservative Sprint who has already lengthened its network upgrade program schedule from 3 to 5 years with the upstart LightSquared who has a FCC mandated deployment schedule to meet. We will certainly have some Odd Couple moments as this relationship plays out over the next 15 years. Yet both companies should benefit from the strengths of the other partner.
The Bloomberg article also contained some interesting facts about about both Sprint and LightSquared:
- Falcone is betting 60% of his hedge fund on LightSquared. This means that every effort will be put into LightSquared’s success. Distractions like GPS interference complaints will not be allowed to get in the way.
- Sprint’s Network Vision upgrade plan is now being reported to take 3 – 5 years instead of early estimates of 3 years. Of course the addition of LightSquared is sure to add some complexity and thus schedule expansion.
- Clearwire is not reported to be in the Sprint-LightSquared agreement. There remains danger that Clearwire could be the odd man out.
On a final note, this agreement causes a big sigh of relief in the wireless vendor community who have been keeping their powder dry to service both Sprint and LightSquared once the network actions begin.
