After a rough few months, 4G Internet service provider LightSquared may be on the verge of bankruptcy. Philip Falcone, founder of Harbinger Capital hedge fund and LightSquared, told Reuters that he is seriously considering a voluntary bankruptcy to keep creditors at bay while LightSquared tries to figure things out.
According to the Reuters report, Falcone wants to buy some time so LightSquared can overcome the GPS interference problem that has plagued the company. Recent studies have shown that LightSquared’s mobile broadband network interferes with commercial GPS. LightSquared challenged these findings saying they were tainted, but the government sided with the GPS companies and rejected LightSquared’s proposed 4G network.
After the US government sent its rejection letter to LightSquared, the company lost its biggest supporter Sprint. Sprint was on board with LightSquared and planned to use the network as part of its future 4G rollout. When LightSquared’s 4G plans collapsed, Sprint hit the road and announced it will use Clearwire and its own spectrum to deploy its LTE network.
[Reuters]