Sprint Bets Big on LightsSquared to Roll Out 4G LTE
Sprint just made a big bet on its 4G future, and it's not without risks. The carrier has announced a deal with LightSquared to deploy a satellite-based 4G LTE network starting in 2012. The 15-year agreement is designed to get Sprint back in the 4G race--Verizon is way ahead in terms of speeds--while minimizing costs. What remains to be seen is whether LightSquared can adequately address concerns that its satellites interfere with the GPS system.
A report allegedly prepared by the Federal Aviation Administration's Navigation Services division says that the LightSquared LTE system could cause 794 deaths and over $72 billion in additional costs to U.S. taxpayers. LightSquared countered to PCMag.com that this report is based on "outdated technical information." The FAA isn't alone when it comes to serious concerns over interference. Everyone from GPS device manufacturers to car makers and farm equipment makers have come out against LightSquared.
According to Sprint, LightSquared will make payments to the carrier of approximately $9 billion in cash for spectrum hosting and network services as well as LTE and satellite purchase credits. While the ambitous startup will be permitted to sell access to its network to other carriers, the agreement enables Sprint to purchase up to 50 percent of LightSquared’s expected L-Band 4G capacity.
LightSquared has also entered into a 3G roaming agreement with Sprint, which means that LightSquared's wholesale customers will be able to access 4G/3G services. Best Buy has already struck a deal to provide 4G service through LightSquared, so it's possible that the retailer could offer both 4G and 3G in the future.