Ailing LightSquared fails to pay Inmarsat; sacks 45% of workforce

22 Feb 2012

LightSquared, the ill-fated USD7 billion open-access Long Term Evolution (LTE) venture backed by billionaire hedge fund manager Philip Falcone, has reportedly failed to pay the USD56 million it owes to British satellite partner Inmarsat for the use of its radio spectrum in the US. With the first phase of their deal drawing to a close, Inmarsat has issued LightSquared a default notice, giving it 60 days to pay before it terminates the deal. Inmarsat was due to receive USD175 million – a quarter of expected earnings – this year from renting its spectrum to LightSquared. However, LightSquared said the payment was not due until Inmarsat replies to several issues it had raised. In a terse statement on its website the stricken US company explains: ‘LightSquared has raised several matters that require resolution before the first phase comes to a close. The terms of the agreement allow for additional time to resolve pending questions before phase one is complete and the final payment is due. LightSquared is committed to fulfilling its business plan to bring world-class wireless broadband connectivity to millions of Americans and believes that Inmarsat will remain an important partner in the company’s future endeavours’.

In other news, Reuters reports that the controversial start-up has said that it plans to lay off nearly half of its employees to save money. The Virginia-based company has said that it will cut 45% of its 330-employee workforce, and called the planned move a ‘prudent and necessary cost savings measure to ensure the long-term success of the company’.

As previously reported by TeleGeography’s CommsUpdate, last week LightSquared, which planned to build out a nationwide hybrid LTE network using terrestrial and satellite networks to provide nationwide coverage, saw its plans overruled by the Federal Communications Commission (FCC), which declared that the non-traditional spectrum in the 1.4GHz and 1.6GHz bands interfered with GPS satellite navigation devices and aircraft flight safety equipment.

United States, Inmarsat, Ligado Networks (formerly LightSquared)