The number three wireless carrier in the US, Sprint Nextel Corp. (NYSE: S), is reported to be on the brink of cancelling its network-sharing deal with Lightsquared, the networking company controlled by private equity firm Harbinger Capital Partners. The report from Bloomberg News says that the deal will be cancelled next week.
Under the terms of the agreement the two companies signed in June 2011, Lightsquared was required to secure regulatory approvals by December 31st. The company ran into problems with existing navigation equipment, and the decision was delayed until last month when the FCC rejected the company’s plans.
Sprint needs to build out its 4G network to compete with Verizon Wireless, a joint venture between Verizon Communications Inc. (NYSE: VZ) and Vodafone Group plc (NASDAQ: VOD), and AT&T Inc. (NYSE: T), and the deal with Lightsquared seemed to be the company’s best hope.
Although it’s possible that Sprint will grant another extension to Lightsquared, such a deal is not expected. This could be lights-out for Lightsquared.
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