LightSquared, Sprint in 15-Year, $13.5 Billion Deal

Billionaire Philip Falcone’s LightSquared struck a 15-year deal with Sprint Nextel to share network expansion costs and equipment in an effort aimed at making both stronger wireless competitors.

LightSquared will pay Sprint to build and operate a nationwide wireless network that uses high-speed long-term evolution, or LTE, technology. During an 11-year period, LightSquared will pay Sprint $9 billion in cash and credits valued at about $4.5 billion. Sprint can use the credits to acquire capacity from LightSquared, which plans to offer wholesale wireless service to consumer electronics companies and other telecommunications operators. The deal has potential advantages for LightSquared and Sprint as they attempt to challenge Verizon Wireless and AT&T, the two largest U.S. wireless operators. For LightSquared, the agreement is a way to build out its planned national network more rapidly with lower costs. The company said it now expects to be able to offer service to 260 million people in the U.S. by the end of 2014, a year earlier than required under its licenses with the Federal Communications Commission. For Sprint, the deal will provide a new source of revenue as the third-largest U.S. wireless company struggles to compete with bigger rivals.