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
RE: Jason Mick = Fail
5/16/2012 2:39:20 AM
As I've said a few times before, I'm not defending RIM or their stupid decisions over the past few years. Its expected and healthy for writers to call out a company that isn't performing up to snuff. My issue with Jason Mick is that he takes it to a level that bypasses absurd. This article isn't even about RIM, yet he finds a way to sneak it in. My point to Jason is this: bash RIM if you so choose, but stop letting it poison your other articles. And STOP citing yourself as a source!
There. I didn't use expletives that time. Let the flames begin.
RE: Jason Mick = Fail
5/16/2012 9:33:13 AM
Maybe he's just adding tags to increase hits. I understand the annoyance, I don't understand the hatred. I'd just stop reading his blogs if it bothered me that much.
RE: Jason Mick = Fail
5/16/2012 4:36:13 PM
I have DailyTech in my RSS. Believe me if there was a "show all DailyTech posts except those from Jason Mick" I'd be the first person to sign up for it. It pops up in my RSS and gets my attention. I'll give him credit for writing about interesting topics. Unfortunately I don't realize until its too late that the article has been written by a monkey who has had his ass shaved and taught to walk backwards. By that point the damage is done and Captain Fantastic Journalist has added to his page hit count :(
“We do believe we have a moral responsibility to keep porn off the iPhone.” -- 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
AT&T Defeats Purpose of New Apple SIM, Locks iPad Air 2 Users to Its Network
October 24, 2014, 2:17 PM
Get Ready for "Microsoft Lumia" Smartphones in Next Few Months
October 24, 2014, 12:26 PM
Report: Samsung Galaxy S5 to Receive Android 5.0 Lollipop in December
October 24, 2014, 11:26 AM
Dreadful Fire Phone Sales Lead to $170M Writedown for Amazon
October 24, 2014, 8:55 AM
Xiaomi Moves Data Out of China to Woo EU, America, Escape Security Concerns
October 23, 2014, 5:11 PM
Android Wear’s First Major Update Brings GPS, Offline Music Support
October 23, 2014, 1:34 PM
Most Popular Articles
Chinese Government Declares Digital War Against America's Top Tech Firms
October 20, 2014, 12:07 PM
Report: 2015 Ford Focus Electric MSRP Slashed by $6,000, Will Retail for $29,995
October 18, 2014, 6:23 PM
Apple Releases iOS 8.1; Adds Apple Pay Support, SMS Relay, Instant Hotspot
October 20, 2014, 1:00 PM
Windows 8.1 + Android "Sell Mini PC" w/ Bay Trail Creates New PC Form Factor
October 20, 2014, 5:07 PM
Update: Motorola Droid Turbo Coming Oct 28, 48-hour Battery Life Confirmed
October 19, 2014, 9:19 PM
Latest Blog Posts
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
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information