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Sprint venture with LightSquared put on hold

Plans with LightSquared for hosting a network are stopped pending federal backing.

By MARK DAVIS
The Kansas City Star

Sprint Nextel Corp. is putting on hold the groundwork for its network-hosting venture with LightSquared, chief executive Dan Hesse told Wall Street analysts Thursday at a San Francisco telecommunications conference.

He said the companies halted the activity pending an update on federal consideration of LightSquared’s plans.

Sprint is building and will operate a wireless network for LightSquared, assuming the Reston, Va.-based company resolves signal interference issues raised during the Federal Communications Commission’s review. Sprint recently gave LightSquared until the end of January to win FCC approval.

The work stoppage on LightSquared’s network isn’t slowing down Sprint’s own massive network upgrade.

In the analyst briefing, Hesse said customers in 10 cities would receive better conventional wireless service and access to Sprint’s faster 4G service using Long Term Evolution technology as the upgrade reached their markets by midyear. Sprint is building its own LTE network as part of the upgrade.

Hesse promised the company’s next financial report, due in about a month, would include new details, including how many iPhones it sells. It also will report how many of those iPhone customers are new to Sprint and how many are existing customers upgrading from different phones.

Hesse, however, cautioned that future reports would show the strains of the network changes and iPhone rollout.

He said the network investment and the price subsidies it gave customers on their iPhones would hold down the company’s financial margins. Sprint has previously said the moves ultimately would pay off for Sprint with stronger financial performance.

Hesse told analysts that it was coincidence that both events were hitting now.

Sprint couldn’t win access to Apple Inc.’s popular iPhone lineup until it improved its own brand image, Hesse said. And the network upgrade was waiting on science.

“We couldn’t do the network any sooner. The technology just wasn’t there,” he said.

To reach Mark Davis, call 816-234-4372 or send email to mdavis@kcstar.com.

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