Is this the end for LightSquared? It just may be. Unfortunately the writing is on the wall.
LightSquared started out as a great American story. A hedge fund manager wanted to get into the real world and add something.
Phil Falcone looked around and saw something that everyone else missed. A looming shortage of wireless data spectrum. An opportunity. He had been working on this play for years before they started LightSquared one and a half years ago.
When the company was launched it made great sense. A year and a half ago AT&T Mobility was struggling through their most embarrassing period. The Apple iPhone was causing the loads of grief with wireless data demand.
Before that we had no wireless data problems. However in the four short years since the Apple iPhone and Google Android hit the marketplace, everything changed.
Suddenly the smaller carriers needed spectrum. They had little or none. LightSquared was their answer.
In the early days everyone was excited about LightSquared, and behind them. Even the FCC gave a conditional approval a year ago. That was the last good news for the company who has been battling the push back ever since.
The GPS industry has been the focal point. Does LightSquared interfere with GPS or not? If they do then they cannot be allowed to do so. If they do not they should be allowed to begin.
The demand for LightSquared service is there. The wireless industry is completely reversing itself over the last four years. It was mostly talk, however in the next few years, at the current pace of change and growth, wireless data is expected to use more than 97% and voice only 3%.
In that world companies need wireless data spectrum or they will simply be non competitive. That means countless smaller companies will either be forced out of business, or to simply compete in the 3% space.
Competition among a wide variety of companies is what has always worked. That is what LightSquared was going to do. It was going to offer wireless data capabilities to smaller carriers.
AT&T and Verizon are against LightSquared. They want to own the wireless data space on their own. Sprint Nextel, T-Mobile, C Spire, US Cellular and others need this kind of solution.
So the coming demise of LightSquared has two areas to watch. One is LightSquared itself. Two is what it will mean to the competitive wireless data space going forward.
Why is LightSquared being shut out? I have heard quite a few ideas from quite a few people. It will be interesting to see what happens next with this spectrum.
Either way, we have a big challenge ahead with spectrum shortages. LightSquared was going to help with that challenge. Without LightSquared the marketplace has a larger and more immediate challenge.
LightSquared has not said goodbye yet, but I fear it is only a matter of time.
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Please attribute to Jeff Kagan, Tech Analyst with www.jeffKAGAN.com
If you would like to discuss, call me at 770-579-5810 or send an email to jeff@JeffKAGAN.com
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Jeff KAGAN| Tech Analyst www.jeffKAGAN.com
Analyst sharing perspective on the changing industry for 25 years
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Contact InformationJeff Kagan
Title: Tech Analyst ~ Columnist ~ Industry Analyst ~ Wireless Analyst ~ Telecom Industry Analyst
Jeff Kagan Tech Analyst, Columnist and Author
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