By Kate Knibbs | Wed Mar 07, 2012 2:31 pm
Sprint plans to cut ties with LightSquared, raising questions about how the carrier intends to weather the spectrum crunch.Bloomberg reports Sprint intends to end its network-sharing agreement with LightSquared after the Federal Communications Commission barred its planned network because of potential interference with crucial GPS networks. LightSquared is still trying to overcome its regulatory hurdles, but Sprint's decision indicates the potential partnership is finished, and the carrier will focus on more fruitful spectrum deals.
LightSquared received a 30-day extension to find a solution to its problems, but sources say Sprint is unwilling to extend it further. The carrier may be acting prudently by nixing the arrangement, as LightSquared has not made much progress finding a workable solution.
The LightSquared decision comes at a time when demands on Sprint's network are increasing, making its need for airwaves more urgent. Sprint still boasts an unlimited data plan, and uses the package to differentiate itself from leading carriers like Verizon and AT&T. The company also now carries the iPhone, which allows for greater data consumption, so boundless data use is likely to overwhelm the network.
The decision may also impact Sprint's scheduled 4G LTE rollout, since it leaves the carrier without a partner able to support the system. Sprint is expected to rely on its spectrum agreement with Clearwire to pick up the slack, but Clearwire's LTE system isn't set to debut until 2013.
The carrier is considering an agreement with T-Mobile, but the companies will have to tread carefully to avoid an FCC rejection. Last fall, AT&T's proposed acquisition of T-Mobile's failed to win regulator approval because of anti-trust concerns.
In the wake of the scuttled T-Mobile deal, AT&T joined Verizon in turning attention to smaller spectrum acquisitions as Sprint waited on LightSquared. Now Sprint faces a shrinking field of eligible allies, making the company's next moves especially crucial, as every major carrier scrambles to gain more spectrum.
Sprint's upcoming split with LightSquared leaves the carrier free to pursue other spectrum partners, as the company's promoted data plans will soon overwhelm its networks without added bandwidth. Sprint will be in a competitive marketplace in its spectrum search, joining other carriers trying to do the same thing, the very situation the company hoped to avoid with its prospective LightSquared partnership.
Thu Mar 08, 2012 1:17 pm | By Apple left Sprint out of the party once again with the launch of its new LTE-capable iPad, putting the carrier at a major disadvantage to attract data-hungry subscribers.
Tue Feb 21, 2012 2:14 pm | By LightSquared is in danger of defaulting on a large payment to one of its key partners as the company continues to face the fallout of its failed broadband network.
Wed Feb 15, 2012 3:11 pm | By Sprint is left scrambling for spectrum, inhibiting its long-term expansion, after the Federal Communications Commission rejected LightSquared's broadband network plan.
Wed Feb 08, 2012 3:58 pm | By Broadband startup LightSquared wants the Federal Communications Commission to set standards for GPS reliability, as it attempts to fast-track its own approval process with the regulator.
Wed Feb 08, 2012 12:31 pm | By Sprint gained customers last quarter but lost money from subsidizing iPhone sales, as its expensive gamble fell short of expectations.
Editorials & Opinion By Margaret Rock
A new set of badges are bringing young Boy and Girl Scouts into the 21st century, catering to an emerging group of "digital natives" integrating technological know-how into every aspect of their lives. 
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