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Sprint Puts Investment in LightSquared on Hold, Hesse Says


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Migrated from Original Forum. Originally Posted 6 January 2012

 

 

I guess Sprint was beginning to install equipment for LSQ spectrum and decide to hold off on any future installations in case things go south. i think the end is near.

 

 

Jan. 5 (Bloomberg) -- Sprint Nextel Corp. put its investment in a partnership with LightSquared Inc. on hold as the wireless venture seeks an operating license from U.S. regulators, Sprint Chief Executive Officer Dan Hesse said.

The CEO told a Citigroup Inc. conference in San Francisco today that he hopes LightSquared, backed by billionaire Philip Falcone’s hedge fund, can resolve technology hurdles needed to gain regulatory approval.

“The companies have agreed to realigning our deployment timeline to coincide with potential FCC actions,” Scott Sloat, a spokesman for Overland Park, Kansas-based Sprint, said in an e-mail. Until approval is received, “both companies believe it is prudent to pull back on expenses,” he said.

LightSquared faces U.S. government scrutiny into whether its service interferes with global-positioning system gear used by cars, boats, aircraft and farm equipment. U.S. officials on Dec. 14 said LightSquared’s signals disrupt a flight-safety system that uses GPS to warn pilots of approaching terrain.

Last week, Sprint granted LightSquared a one-month extension, until Jan. 31, to obtain the regulatory approval. LightSquared gaining the federal license is a condition of their July agreement, under which Sprint would build and operate LightSquared’s so-called fourth-generation network during an 11- year period in exchange for $9 billion in payments and an additional $4.5 billion in service credits.

Network Construction

Sprint has agreed to network construction for LightSquared in exchange for advanced payments. Through the third quarter, Sprint received about $290 million from LightSquared, Sloat said today.

“Both companies remain optimistic that we will receive FCC approval early this year, and the deal between the two parties remains intact,” Reston, Virginia-based LightSquared said today in an e-mail. “LightSquared and Sprint collectively agreed that it is fiscally prudent to defer further capital spending on network deployment until the FCC authorizes LightSquared’s network.”

LightSquared has said GPS manufacturers should have planned to accommodate the company’s use of the airwaves. GPS makers have said LightSquared inappropriately plans to send powerful smartphone signals on airwaves previously reserved mainly for satellite traffic.

Sprint shares fell 3 percent to $2.24 at the close in New York. The stock tumbled 45 percent last year.

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Migrated from Original Forum. Originally Posted 6 January 2012

 

Sprint did have to do some preliminary work as part of the LightSquared prepayment that was made last year. I guess those funds have been exhausted now. I'm not holding my breath for LightSquared.

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