Reports suggested it was imminent but today Sprint has officially confirmed that it has pulled the plug on its LTE 4G contract with LightSquared, which will return $65 million in repayments to the struggling wireless company.
The Wall Street Journal had reported that Sprint would terminate its 15-year contract with LightSquared, signed in June, which involved America’s third-biggest operator deploying and operating an LTE network on the 1.6 GHz specputrum.
However, when LightSquared didn’t adhere to interference issues (that were questioned by the FCC) regarding the use of the spectrum, Sprint invoked clauses in its agreement and walked away.
The company says it is open to working with LightSquared again in the future but the company would need to “find a resolution to the interference issues”:
“Sprint has been and continues to be supportive of LightSquared’s business plans and appreciates the company’s efforts to find a resolution to the interference issues impacting its ability to offer service on the 1.6 GHz spectrum. However, due to these unresolved issues, and subject to the provisions of the agreement, Sprint has elected to exercise its right to terminate the agreement announced last summer. We remain open to considering future spectrum hosting agreements with LightSquared, should they resolve these interference issues, as well as other interested spectrum holders.
LightSquared’s was more positive in its own statement:
“These regulatory delays are unfortunate because they will deprive the American people of the benefits of additional competition in the wireless industry,” said Doug Smith, chief network officer and interim co-chief operating officer of LightSquared.
“For LightSquared, Sprint’s decision will enhance our working capital and provide more flexibility,” he said.
At the end of last year, both companies agreed to delay the deployment of the LTE network, so Sprint could roll out its own projects.
The operator notes that as a result of the termination, Sprint customers remain unaffected and it looks forward to launching its 4G LTE network in the middle of this year.