LightSquared Responds to the FCC Rejection, Slashes Workforce in Half
posted Sunday Feb 26, 2012 by Nicholas DiMeo
In an age where spectrum and cash are king, wireless carriers need to be able to stay afloat financially, but also need to be able to innovate and move forward with the technologies. For companies like Clearwire, financial troubles have been plaguing them for over a year now. Sprint was going to leave them for 4G company LightSquared, except last week LightSquared ran into a roadblock called the FCC and it may put a permanent halt on rolling out a 4G LTE network.
This week we learned that LightSquared is trying to stay ahead of the financial troubles it will inevitably encounter due to no production as billionaire Philip Falcone, who backs LightSquared financially, is going to cut 149 of its 330 jobs, roughly 45 percent of the entire workforce. The majority of the jobs being axed are the ones who were going to be responsible for rolling out the actual network.
On what's going to happen during this downtime, check after the break.
While LightSquared may be down, they are certainly not out for the count. They are merely cutting costs while they try to work through the FCC rejection. So far, LightSquared has put in over $4 billion of private funds into the deployment of the 4G network, which the FCC pretty much asked LightSquared to build. This week, Falcone has asked the FCC for more time to respond to the rejection and has said that the decision was a "rush in judgement" and allow a 30-day extension on its ruling from March 1st to March 30th. This should give enough time for LightSquared and its partners to come up with a counter-attack for the FCC's battle they've started.
There are solutions to this problem that can and will address the needs of the GPS community. This was not a decision based on science or technology but was a politically motivated decision fueled by special-interest groups in the GPS and telecom industry.
Slightly related, LightSquared also skipped over a $56.3 million payment to British satellite operator Inmarsat Plc. While reasons weren't given, sources close to the matter stated that certain criteria were not met to merit payment.
Could that be part of LightSquared's cost-cutting measures? Should we fear that this $4 billion so far is a lost cause? I hope for the best for them, as they seem like the best competitor for Verizon's 4G LTE service to date.