Sprint Nextel will drop its planned 15-year 4G network partnership with would-be hybrid network operator LightSquared, the Wall Street Journal reported on Thursday.
The end of the Sprint partnership, which was due to expire on Thursday, would be nearly as big a blow to the foundering LightSquared as the U.S. Federal Communications Commission's proposal last month to revoke the carrier's authorization to build a land-based network.
Since the deal was announced last July, Sprint had been planning to host LightSquared's radio spectrum on its Network Vision infrastructure. LightSquared was to pay Sprint US$9 billion in cash for that hosting and said the plan would save it $13 billion over eight years.
For its part, Sprint had looked to the partnership for extra spectrum on which to run its own planned LTE network. It would get $4.5 billion worth of credits to use some of LightSquared's spectrum in addition to its own and that of longtime partner Clearwire. Sprint extended the deal twice to give LightSquared more time to win FCC approval for its network.
Sprint will terminate the LightSquared deal on Friday and return $65 million in prepayments by LightSquared, according to the Journal.
In moving to kill LightSquared's plan, the FCC cited tests it said showed harmful interference between the proposed network and GPS. Since the public notice of its proposal, which was followed by a public comment period that ends this week, two other carrier partners -- FreedomPop and Cricket -- have signed up with Clearwire for wholesale LTE capacity.
Meanwhile, LightSquared has been positioning itself for a possible legal battle that may be its only hope to resurrect its network plans. On Wednesday, the company said it had hired two prominent Washington lawyers. On Friday, the company is expected to file its own comments on the FCC's plan.