The bad news is piling on for embattled network LightSquared, as the company has missed a key payment to satellite network operator Inmarsat as it scrambles to remain in business following last week’s FCC decision to reject the network rollout until the company can reassure the regulator that its planned LTE network will not interfere with the functionality of the GPS network for automotive, marine or government use.
As a result of the missed payment, the company as also been forced to layoff 45% of its own staff as it reorganizes pending its planned suit against the FCC for rejecting and ultimately denying its provisional approval for the long-planned LTE network rollout. While the company reorganizes, CEO and majority investor Phillip Falcone is also facing his own legal troubles as the majority shareholders in Harbinger Capital Partners are suing him for alleged deception in regards to the investment in the network, which has lost tens of millions of dollars for every day that it is not operational.
With LightSquared missing the required payment to Immarsat, time is running out before the company is forced to liquidate or shut down due to litigation on both sides as it also has to contend with the various carrier and virtual operator agreements that have been previously signed that were originally agreed to based on the idea that LightSquared would have been approved by this time and taken steps to become operational. For it’s part, Sprint has given LightSquared until the middle of March before it officially terminates its currently standing agreement and returns the initial payment made to bind the network hosting and sharing agreement.
This situation may even be a blessing in disguise for both Sprint and Clearwire, as both companies continue to work on their respective LTE networks and focus on allowing virtual operators to lease access on both networks as a way to raise additional revenue, much as both networks are currently doing at the moment with the recent launch and announcement of multiple MVNOs within the past few weeks on both Sprint and Clearwire.