LightSquared rumored to be in network talks with Sprint Nextel, AT&T

LightSquared continues to draw media attention with competing reports this week claiming the company is close to signing network deals with Sprint Nextel Corp. (S) and AT&T Mobility (T).
Bloomberg is reporting that LightSquared is in preliminary talks with AT&T Mobility to purchase capacity on the carrier’s soon-to-launch LTE network.
The potential deal, which was attributed to two people with “knowledge” of the conversation, would call for LightSquared to purchase capacity on AT&T Mobility’s network to augment LightSquared’s own LTE network plans. Those plans, which are to include both a satellite and terrestrial component, have run into a bit of a snag due to potential interference issues with ground-based GPS equipment.
AT&T Mobility last week named the first five markets it plans to cover with its LTE network on its way to covering approximately 75 million potential customers by the end of the year.
Over at Reuters people again familiar with the situation are reporting that LightSquared is “close” to signing an eight-year networking sharing arrangement with Sprint Nextel that will see LightSquared pay $2 billion per year to rent space and equipment on Sprint Nextel’s 40,000 cell towers that are currently being upgraded as part of the carrier’s Network Vision initiative. LightSquared would use its own spectrum as part of the deal.
Sprint Nextel has said it expects to spend around $5 billion upgrading its network, which will allow the carrier to consolidate its current iDEN and CDMA networks as well as its diverse spectrum holdings.
As Reuters points out, there is also the matter of where LightSquared will get $2 billion per year to pay for this arrangement as the company has to date raised just over $1 billion and is sort of still on the hook with Nokia Siemens Networks for a $7 billion contract to build out its planned LTE network.
LightSquared noted this week that it was still on track to begin LTE network trials by the end of the year, with its network ready to begin accepting wholesale customers by early next year. The company has announced wholesale and roaming agreements with a number of wireless operators, including Cellular South and Leap Wireless International Inc.