A new and independent mobile network called LightSquared declared bankruptcy due to interference with GPS airwaves. The FCC eliminated LightSquared from the network last winter, after the value fell due to the shared field with GPS.
LightSquared acquired SkyTerra, a satellite provider for businesses that is a wireless broadband network. While GPS navigator units did not struggle without the SkyTerra provisions, the FCC did not agree with the plan.
According to The Washington Post, the firm’s Chapter 11 filing with the U.S. Bankruptcy Court reads that LightSquared is in debt to both Alcatel Lucent and Boeing for $7 million each, Burson-Marsteller for $264,000 and Level 3 for $169,000. In the midst of system repairs, the company accumulated $1.6 million in debt.
LightSquared’s ultimate plan was to buy AT&T and Verizon Wireless, but LightSquared has its own smaller business that will continue to run. The Washington Post reports that this company has $30 million in revenue and 300,000 customers, for its provisions of wholesale spectrum and satellite services.
Philip Falcone, the hedge-fund chief of LightSquared remains optimistic as he predicts that the firm’s time in bankruptcy will provide it with more time to resolve. Chief Financial Officer Mac Montagner said that it will also give the company more time to accrue the money it has lost.
But analysts do not see the LightSquared venture being a successful one, as they do not predict FCC approval for the company.
“So long as there is a GPS interference issue with LightSquared L-band frequencies, the value of the company’s spectrum asset will likely remain diminished,” said Jeff Silva, analyst at Medley Global Advisors research.