LightSquared reportedly has signed a 15-year contract with Sprint to jointly build an LTE network, according to reports from Bloomberg and The Wall Street Journal.
Harbinger Capital Partners, the venture capital firm backing LightSquared, is said to have sent investors a letter last week reporting the deal.
Sprint declined to remark on the reports. LightSquared could not be immediately reached for comment.
An excerpt of the letter published by Bloomberg states that “LightSquared and Sprint will jointly develop, deploy and operate LightSquared’s 4G LTE network.” Sprint will be a “significant customer” of LightSquared’s network, according to the document.
Rumors of the network sharing deal between Sprint and LightSquared, valued at $20 billion, surfaced in Bloomberg earlier this month.
If true, the deal could grant Sprint independence from Clearwire, on whom Sprint currently depends for its 4G strategy, as well as allow Sprint access to LTE as well as WiMAX.
The contract also marks a major vote of confidence in LightSquared, which is struggling to address GPS interference issues that threaten to derail its ambitious mobile broadband plans.
The FCC has said it will not allow LightSquared to launch its network until the company is able to prove that its network will not harm GPS systems used by the military, industrial sector and consumer electronics. Government tests show LightSquared’s network could cause widespread blackouts in GPS service if allowed to go live.
Some in the GPS industry say the interference is so severe it can only be fixed by moving LightSquared’s network spectrum further away from bandwidth used by GPS. It is not clear how close LightSquared is to solving the problem, but the company has said it is on track to begin commercial operations of its network early next year.
LightSquared already has signed on three official customers, including Leap Wireless, Best Buy and Cellular South.