LightSquared | Right Idea, Wrong Company? | Jeff Kagan Tech Analyst

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Atlanta, GA, September 17, 2011 — When LightSquared introduced itself to the marketplace about a year and a half ago the idea sounded great. At that time AT&T Mobility was hurting themselves with slow wireless data connections. The need was growing and LightSquared had an answer.

They were a young company with a slightly arrogant attitude. They looked like they might be the wireless data solution for companies like AT&T Mobility, Verizon Wireless, Sprint Nextel and T-Mobile. They could also serve the many smaller competitors in the space like MetroPCS, Tracfone, Cellular South and US Cellular.

Since then a lot of water has passed under the bridge.

AT&T’s problems got worse. They decided to merge with T-Mobile. They think it will solve their capacity problem, but it will only be a temporary solution. Over the next couple years it would return as more customers signed up and used more wireless data.

In addition every wireless carrier would likely experience the same capacity problems.

This said to me we need to solve this growing industry wide problem or we would all be suffering capacity problems like we did in the 1990’s with America Online. Remember that? Slow connections if you could even get connected.

The need for a solution is growing. LightSquared has a solution. So far, so good, until the last few months anyway.

Since then the GPS industry has raised the flag of caution. Apparently LightSquared technology will negatively impact the GPS segment, which we depend on.

Through all this noise of the last few months LightSquared has taken the wrong attitude. They see this GPS problem as something the GPS industry should solve. They chose to do nothing. This is the wrong path for a new disruptive company.

It is the time for LightSquared to be making friends, but instead they are making enemies.

That was a mistake as the talk in the industry was about LightSquared as the bad guy. No one is talking about what they do, just the trouble they are causing.
In addition, this is entering the political spectrum. This was being talked about on radio talk shows all day Friday and was even talked about by Bill O’Reilly on The O’Reilly Factor on Fox News, Friday night.

This is a disaster from a public relations perspective. The view of the company may be wrong, yet they have done nothing to change this view.

As the story enters the public arena, and is not positioned well, they will lose. Simple as that.

We have seen several problem areas crop up for the company in the last few months. This past week there was a hearing in Washington DC and it whipped the anti-LightSquared noise up into a frenzy.

A General testified. The FCC Commissioner was a no-show. It was all very embarrassing for the company and their idea. This was a disastrous week for the company. They firmly now look like the bad guy.

There is an old saying about catching more flies with honey than with a hammer, or something like that. LightSquared doesn’t seem to understand how to win and they are using a hammer and all that is doing is pounding down their chances for success.

We need a solution like LightSquared wants to provide. That is certain. However if LightSquared is not the right company, others can jump in.

One way or another we need a solution to the growing capacity problem. That is real. We can’t take our eyes off that goal.

If LightSquared will wake up and handle this the right way they may have a chance. If not let another company step up to provide a solution.

One thing is for sure, the company that can provide a workable solution to our growing problem will do very well indeed.

Contact:

Jeff Kagan

Telecom Industry Analyst

Colorful industry analyst sharing perspective on the changing industry for 25 years

770 579 5810

jeff@jeffkagan.com

www.jeffkagan.com

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