![]() ![]() On February 17, 2012, a LightSquared investor filed a lawsuit against Harbinger Capital Partners and Phil Falcone. Obviously, LightSquared investors aren’t happy about how their money was squandered. Although LightSquared owns its satellites for satellite-to-earth communications services, they are relying heavily on Sprint’s infrastructure for its terrestrial service. If Sprint pulls out, LightSquared is in a really tough spot. MSS industry expert Tim Farrar called the $236M “the most expensive press release in the world” stating that Sprint had done “basically nothing in terms of deployment apart from some initial network planning.” Sprint’s SEC filing last month stated that if LightSquared doesn’t achieve FCC approval by the agreed date (now March 15), Sprint is allowed to keep all but $74M of LightSquared’s deposit. To date, LightSquared has paid Sprint $310M in prepayment for work. ![]() Rumors are circulating that Sprint is done granting extensions. At the end of January, Sprint granted another extension, this time for 45 days, to March 15. Sprint agreed to grant a 30-day extension, some speculating for ~$20M. The original agreement expired December 31, 2011. The LightSquared-Sprint agreement is contingent on LightSquared gaining FCC approval. Building its own towers from scratch would be prohibitively expensive and would not allow LightSquared to meet the roll out schedule detailed in the January 26, 2011, FCC order. LightSquared had planned to use 31,000 Sprint towers, in addition to contributing 3,400 of its own towers, to roll out their system. Yesterday (March 6), Bloomberg reported that Sprint will opt out of its infrastructure sharing agreement with LightSquared. Inmarsat isn’t the only vital partner not happy with LightSquared. ![]() LightSquared has paid Inmarsat a total of $420M under their agreement, of which $260M was paid in 2011. Inmarsat is a vital partner as LightSquared needs rights to certain MSS spectrum that Inmarsat has rights to. Inmarsat issued a notice of default, starting the 60-day clock in which LightSquared has to resolve the issue. While LightSquared stated that Imarsat hadn’t completed it’s obligations, Inmarsat said it was negotiating with LightSquared but didn’t know if or when a payment would be made. In the week prior, on February 20, Reuters reported that LightSquared missed a $56.25M payment due to satellite partner Inmarsat. I am confident that working together, we can solve this problem…,” said Falcone. We, of course, agree that it is critical to ensure that national security, aviation and the GPS communities are protected. “We are, furthermore, committed to working with the appropriate entities to find a solution to the recent regulatory issues. Amid the announcement, Falcone remained steadfast that LightSquared is focused on finding a solution. Chief Network Officer Doug Smith and Chief Financial Officer Marc Montagner will serve as interim co-chief operating officers while the search for a new CEO is underway. LightSquared announced that Harbinger Capital Partners CEO Phil Falcone was appointed to the LightSquared board of directors. Forbes reported that Ahuja will remain as LightSquared board chairman. On February 28, 2012, LightSquared announced that CEO Sanjiv Ahuja and Executive VP Martin Harriman resigned. Meanwhile, the FCC is accepting public comments on the NTIA’s recommendations. This week, Bloomberg reported that Sprint will end its infrastructure sharing deal with LightSquared. The LightSquared machine continues to implode as CEO Sanjiv Ahuja and Executive Vice President Martin Harriman resigned last week in the wake of the NTIA recommendations against LightSquared rolling out their system. ![]()
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