Friday, 21 October 2016
Last updated 1 hour ago
Jul 28 2011 | 12:51pm ET
Harbinger Capital Management's wireless venture will pay Sprint Nextel Corp. some $13.5 billion over the next decade to build and run its planned nationwide network.
The two sides reached a 15-year deal last month. Under that deal, LightSquared will pay Sprint $9 billion in cash over an 11-year period. The company will also give Sprint $4.5 billion in credits which Sprint can use to pay for capacity on the LightSquared network.
The LightSquared network must cover 260 million U.S. residents by the end of 2014, the Federal Communications Commission has ordered. The FCC still must sign off on the company's plans; an array of global position systems users have warned that LightSquared's network could cause major interference problems.
“This agreement gives LightSquared a rapid and cost-effective radio access network build,” said LightSquared Chairman and CEO Sanjiv Ahuja. “With our next generation satellite already operational and our independent core network build underway, LightSquared is now well positioned to meet the fast-growing market demand for wireless broadband services with its wholesale-only integrated 4G-LTE and satellite network.”
LightSquared isn't the only player in the deal relying on it to turn its fortunes around: Sprint today reported its 15th-straight quarterly loss.