Sprint plans to ditch its deal with Phil Falcone and LightSquared

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We’re waiting to see what the optimists have to say about this one.

Bloomberg reports that Sprint Nextel Corp. plans to end its spectrum sharing agreement with hedge fund manager Phil Falcone’s telecom start-up, LightSquared.

Since Falcone’s main problem in getting clearance to launch his company’s services is the fact that LightSquared’s own spectrum interferes with GPS system spectrums, it’s not hard to imagine how bad this is for the start-up.

From Bloomberg:

Sprint will take the step as LightSquared approaches a March 15 deadline to meet certain conditions under the agreement, said the people, who wouldn’t be identified because the information isn’t public. Sprint and LightSquared struck an 11-year deal to share network expansion costs and equipment in June provided LightSquared secure regulatory approvals for its wireless service by December. Though Sprint pushed the deadline back, it doesn’t plan more extensions, the people said.

You’ll recall that Flacone has invested $3 billion of his own money in this venture, so we’re wondering how wealthy he is now. Does he still make the Forbes 400? The list will come out soon so we’ll find out in short order.

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