Harbinger Wireless Venture In Deal With Sprint

Jun 20 2011 | 2:05am ET

Otherwise wracked with difficulties, Harbinger Capital Management's ambitious wireless broadband venture has struck a crucial deal.

LightSquared and Sprint Nextel Corp. signed a 15-year agreement to both build and run the nationwide network—one that has drawn criticism, and negative test results, over possible interference with global positioning systems. Under the deal, Sprint will both help LightSquared set up its network—which must cover more than 200 million customers by 2015 to meet Federal Communications Commission guidelines—and become a major, long-term customer.

"LightSquared and Sprint will jointly develop, deploy and operate LightSquare's 4G LTE network," Harbinger said in a letter to investors. "Sprint will become a significant customer of LightSquared's 4G LTE network."

The deal, first reported by Bloomberg News, could be worth as much as $20 billion.

The Sprint agreement is the most important made by LightSquared, which plans to sell space on its network to other providers as well as Sprint. The company accounts for a substantial chunk of Harbinger's $6 billion in assets; the hedge fund recently paid out more than half of its first-quarter redemptions in the form of in-kind distributions of LightSquared shares.

LightSquared is set to deliver its own report on possible interference issues on July 1.


In Depth

The Benefits Of Private Debt Investing

May 7 2015 | 10:43am ET

Jeffrey Haas is chief operating officer of Old Hill Partners Inc., an SEC-registered...

Lifestyle

Yale Receives $150 Million Gift from Blackstone’s Schwarzman

May 12 2015 | 12:10am ET

Yale University announced it has received a $150 million gift from Blackstone Group...

Guest Contributor

How To Generate 6% Yield In A Volatile World

May 22 2015 | 6:41am ET

Private credit comes in many different flavors, all with the common themes of over...

 

Editor's Note