Game Over: LightSquared Goes Bankrupt
May 14, 2012 7:44 PM
comment(s) - last by
Death of satellite LTE project essentially sealed the firm's fate
economics grad and billionaire venture capitalist, has seen his hopes to deliver 4G satellite LTE crash and burn. Despite his fortune, Mr. Falcone had to dig deep to scrounge up $5B USD in extra venture capital to pay for the world's largest communications satellite in history -- the 5.4 ton SkyTerra 1.
Launched in 2010, all was going glorious for Mr. Falcone and his new venture LightSquared. Soon they had
worked out a $9B USD deal
with Sprint Nextel Corp. (
) to deploy a terrestrial LTE network to complement the satellite offerings. Together the terrestrial + satellite solution was expected to dominate the LTE market when it launched sometime around 2013.
But optimism surrounding the
U.S. Federal Communications Commission
's conditional approval of LightSquared's satellite LTE turned to dismay when the U.S. Air Force revealed that it would interfere with
an estimated 75 percent of commercial and government GPS units
LightSquared's doomed LTE bid involved a record-setting 5.4 ton satellite. [Image Source: Boeing Comp.]
And just in case rendering navigation useless across the continental U.S. wasn't enough of a death sentence, the SkyTerra 1 bid became
an intensely politicized issue
when it was revealed that LightSquared's legal team had pressured the White House chief of staff, reminding him of the millions Mr. Falcone had raised for President Barack Obama's election bid. Many believe those donations led to a hasty conditional approval by the FCC, overlooking interference concerns.
But in the end those contributions were for naught because even the friendly Obama administration was
forced to kill LightSquared's proposal
. Sprint, upset at losing a key part of the service, also terminated its contract with LightSquared.
With no terrestrial deployer, billions in debt, and a defunct multi-ton hunk of metal floating in orbit, the latest entry in this story is perhaps a predictable one -- LightSquared has filed for Chapter 11 protection in
New York's Southern District Court in New York
The bankruptcy spells dire news for hedge fund Harbinger Capital Management, as well as Mr. Falcone. The perhaps ironically named hedge fund was a deep investor in LightSquared and joined Mr. Falcone in trying to propose stop-gap deals to placate creditors who grew increasingly unsettled in the wake of the satellite deal collapse.
The LightSquared failure is the first major defeat for venture capital whiz Phillip Falcone.
[Image Source: Jacob Kepler/Bloomberg/Getty Images]
Most of LightSquared's staff has already jumped ship, so at this point creditors may be left picking at a carcass.
LightSquared's marketing chief Frank Boulben has gone from one bankruptcy candidate to another, becoming the
new chief marketing officer (CMO) for money-losing Canadian phonemaker Research in Motion
, Ltd. (
). CEO Sanjiv Ahuja, stepped down in February.
With the bankruptcy filing LightSquared and its ambition to become a fifth major American wireless service provider are -- for all intents and purposes -- dead. The company's meteoric rise and bizarre fall stand as a cautionary tale to those who might wish to cut corners to establish themselves as a competitive service provider.
This article is over a month old, voting and posting comments is disabled
Jason Mick = Fail
5/14/2012 11:41:00 PM
And here we have yet another non-RIM article infected with Jason Mick's unhealthy desire to have every article he writes take a pot shot at RIM, deserved or otherwise. No point in being civil anymore...
Hey Jason! F*uck you! Learn to write a decent article you no-talent ass clown!
"We’re Apple. We don’t wear suits. We don’t even own suits." -- Apple CEO Steve Jobs
RIM Puts LightSquared Castoff in Charge of Marketing; Airs Vague Ad Pitch
May 8, 2012, 4:10 PM
LightSquared's GPS-Crippling 4G Bid is Sunk by the FCC
February 15, 2012, 1:18 PM
LightSquared Wireless Service Signals Interrupt 75 Percent of GPS Receivers
December 12, 2011, 1:00 PM
Sprint Enters Agreement to Deploy LTE Services, WiMAX Left in Limbo
July 28, 2011, 4:32 PM
Retiree Sues Apple For $7,500 for Wiping Honeymoon Photos From His iPhone
November 30, 2015, 10:23 AM
iPhone 7 May Pack 3-4 GB Memory, More Storage; 4-Inch Comeback is Rumored
November 20, 2015, 10:12 PM
OnePlus One, OnePlus 2 Will Receive Android Marshmallow in Q1 2016
November 16, 2015, 9:58 AM
Lenovo Whoa: Motorola Droid MAXX 2 and Turbo 2 Break Cover in Leaks
October 26, 2015, 3:12 PM
Leak: Apple Preps for First Real Android App Foray With New Apple Music App
October 24, 2015, 1:59 PM
Pepsi Smartphone? Empty Calories Coming Soon to the Midrange
October 12, 2015, 11:41 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information