Wireless network carrier Sprint has struck a $13 billion deal with telecommunications firm LightSquared which will run over 15 years.
According to Bloomberg, the Virginia-based LightSquared Inc will pay $13 billion to Sprint Nextel Corp distributed in $9 billion cash and credits worth $4.5 billion over a period of 11 years to aid it in building a Long Term Evolution (LTE) wireless network to power the telecommunication and electronics industry.
“The benefit this provides is an acceleration of our build out and at very efficient costs. This is very, very significant for LightSquared’s ability to build its business,” the chief executive and chairman of LightSquared, Sanjiv Ahuja stated.
Ahuja also added that the deal will prove beneficial to Sprint and may give it more opportunities to set a benchmark for innovation in the wireless industry.
The company also revealed its plan to become a leading network provider and compete with current American ginats Verizon Wireless and AT&T Inc. Ahuja said that LightSquared is working towards offering the service to 260 million users in the US by 2015, a year before the Federal Communications Commission has demanded.
Sprint has revealed that the company will not begin working on the deal until the FCC has certified the spectrum.