Sprint Nextel’s deal with LightSquared to build and run its LTE network for more than US$13 billion in cash and credits all comes down to money. Sprint is partnering with the startup and getting $4.5 billion in purchase credits for its planned LTE (Long-Term Evolution) and satellite networks even though it already owns a majority stake in Clearwire, which has a national 4G WiMax network up and running. But the biggest reason Sprint is looking beyond Clearwire — though it may still play a role in Sprint’s LTE strategy — is that Sprint thinks LightSquared can better find outside funding. “LightSquared’s going to pay them a large pile of money, whereas Clearwire’s going to absorb a huge pile of money,” TMF Associates analyst Tim Farrar said. Sprint, laboring against much bigger rivals AT&T and Verizon Wireless, wants both the mainstream 4G technology and a strong new revenue stream, he said.Under the deal announced on Thursday, LightSquared will pay Sprint $9 billion over 15 years to host LightSquared’s spectrum on the multi-technology network that Sprint is planning to build under its Network Vision plan. Sprint would also get the credits to go back and buy wholesale capacity from LightSquared to market… Read full this story
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