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Sprint to hit the eject button in LightSquared deal today

Light at the end of the tunnel winks out

5 things you didn’t know about cloud backup

The Wall Street Journal reckons Sprint is going to pull out of its deal with LightSquared later today, leaving the box-of-frogs mobile broadband biz with nothing but $65m and a top-flight legal team.

The news comes as no surprise, even though it has not yet been confirmed by either party, only by the newspaper's contacts at Sprint. The infrastructure-sharing deal was always dependent on LightSquared getting FCC approval, something it has comprehensively failed to do, despite Sprint granting it two deadline extensions. This time around it seems that Sprint's patience has run out.

The previous extensions, granted late last year and early 2012, were both justified because the FCC was still dithering about whether it would permit LightSquared to deploy an LTE network in a frequency band where it could interfere with some high-precision GPS equipment. The dithering stopped last month when the FCC said "no" and while LightSquared is still planning to challenge that decision, the time is right for Sprint to get out.

LightSquared had given $65m to Sprint to seal the deal, money which Sprint will have to return now it wants out – but that's pocket change when one is taking about satellite launches and national networks.

At an investors' call just before the last extension, LightSquared was bullish about being able to build a network without Sprint, claiming that the use of Sprint sites would make life easier but wasn't necessary to balance the books.

It's hard to see how that can be true: using Sprint's infrastructure LightSquared put the cost of the network at $9bn, which is still $2bn more than it originally estimated and less than half the $25bn figure proposed by some industry analysts. It's worth noting that LightSquared never had the $9bn, which was to be paid over the next 11 years.

The winner here is ClearWire, pioneers of the WiMAX standard which proved a duff bet. ClearWire is busy deploying LTE these days, and has been mopping up LightSquared customers as they jump ship, so we'd expect to see a triumphant press release from them pretty soon if Sprint is hitting the eject button.

The Wall Street Journal points out that today is also the last day for LightSquared to raise objections to the FCC process, and reckons the company has 150 pages of said objections to be filed. Once the FCC has digested those LightSquared will, no doubt, be chucking its new litigation team into the mix while piling on the political pressure in the hope that the US Army will lend it some military spectrum - which is probably LightSquared's last best hope to challenge the mobile industry. ®

5 things you didn’t know about cloud backup

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