LightSquared has reportedly garnered a 30-day extension from potential network host Sprint Nextel (S) to gain governmental approval to use its controversial 1.6 GHz spectrum holdings.
The Wall Street Journal is reporting that Sprint Nextel has extended the deadline for LightSquared to win approval from the Federal Communications Commission to use those spectrum assets until the end of January. That initial agreement included a clause that the deal could fall apart if LightSquared did not receive government approval by the end of 2011, a scenario that did indeed play out despite a last-minute attempt to force the issue.
LightSquared signed the network and spectrum hosting agreement with Sprint Nextel last year. The deal was seen as crucial for LightSquared to get its network plans to market in a cost-effective and timely manner, and was touted by Sprint Nextel as part of its LTE plans. The deal calls for Sprint Nextel to “host” LightSquared’s controversial L-band spectrum assets in the 1.6 GHz band across the carrier’s evolving Network Vision network upgrade program. As part of that agreement, LightSquared is to pay Sprint Nextel $9 billion over an 11-year period for the spectrum hosting and network services as well as about $4.5 billion in credits for LTE and satellite wholesale usage. Sprint Nextel will also have the option to purchase up to 50% of LightSquared’s L-band capacity. Sprint Nextel touted LightSquared’s spectrum assets as allowing the carrier to extend its traffic capacity from 2014 with its own holdings to 2015 when including the LightSquared spectrum.
However, LightSquared’s attempts to show that its network plans won’t interfere with some GPS systems has run into countless tests that have shown continued issues with at least some systems. LightSquared was initially gracious in trying to work through the issues, though that tone seemed to become more aggressive as last year went on.
Sprint Nextel’s extension might have been a no-brainer for the carrier as its spectrum needs are currently being trumped by its own fiscal constraints as well as aggressive moves by its competition to lock up unused spectrum assets.
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