US wholesale player Lightsquared has confirmed that it has entered into a partnership with Sprint Nextel that will see Sprint deploy an LTE network on Lightsquared’s behalf. The deal has put a serious dent in the US ambitions of Nokia Siemens Networks, which was named as Lightsquared’s network deployment partner last year.
As expected, the new deal means will see Lightsquared pay Sprint up to US$11bn in cash over an 11-year period to deploy and operate a nationwide LTE network using L-band spectrum. As a wholesale only player, Lightsquared will then be able to sell back capacity to other operators, including Sprint.
In 2010 NSN made much of its US$7bn deal to deploy and run an LTE network for Lightsquared. Following that annoucement, Martin Harriman, EVP at Lightsquared told Telecoms.com that: “It’s an extraordinarily complex deal as we try and capture an eight-year partnership that pretty much does everything. We’ll get there, but it’s a big, big deal, both for us and for NSN.”
Not any more. NSN confirmed to Telecoms.com on Thursday that it would no longer be involved in the running of Lightsquared’s radio access network, with that now in the hands of Sprint Nextel, which will use its own vendors.
However, an NSN spokesperson assured Telecoms.com that it was still involved with Lightsquared and that it has signed a new deal for the design, installation, testing and systems integration of the core network. “This means we will play a central role in LightSquared’s rollout of 4G-LTE,” the spokesperson said. However, in contrast to last year’s headline grabbing figure, the value of this latest contract has not been publicised.
As the only major US WIMAX player, Sprint has found itself out on a limb in the telecoms industry. Indeed, following the announcement of the Lightsquared deal today, Sprint announced losses of US$847m in the second quarter of 2011, reflecting how customers have either been drawn to the Apple iPhone on AT&T and Verizon, or to Android devices on the latter’s faster LTE network.
What’s more, while the tie-up with Lightsquared is crucial for Sprint, it is still dependant on Lightsquared successfully navigating its complex issues with the FCC, which it has to assure that its network will not interfere with terrestrial GPS signals.
In response to this, Steve Elfman, president of network operations and wholesale for Sprint said in a statement that, “We believe LightSquared, in cooperation with the FCC and adjacent spectrum users, is taking proactive steps to address and resolve these issues in a timely manner.”
With Amazon and Google launching smart home initiatives, have the telcos missed out on their chance to cash in on this market?
Total Voters: 62