LightSquared said it plans to cut nearly half of its workforce to save money, according to a Reuters report..
The report notes that LightSquared plans to cut 45% of its current 330 employee base, citing the need for a “prudent and necessary cost savings measure to ensure the long-term success of the company.”
Last week the Federal Communications Commission refused to grant LightSquared access to its 1.6 GHz spectrum assets needed to fuel its planned LTE-based mobile broadband network due to potential interference with certain GPS systems. This came one year after the FCC initially granted LightSquared permission to add the terrestrial component to its operation plans.
The job cuts also followed a statement from LightSquared that it was holding up payment to Inmarsat in regards to a spectrum re-banding plan that was to free up spectrum assets to be used by both companies.
“LightSquared has received a notice of completion from Inmarsat relating to the first phase of the companies’ 2007 multi-phase agreement to reallocate spectrum resources,” LightSquared noted in a statement. “As part of the first phase, Inmarsat is required to fulfill certain obligations important to the deployment of LightSquared’s 4G-LTE integrated terrestrial and satellite network and protection of their respective customers. LightSquared has raised several matters that require resolution before the first phase comes to a close. The terms of the agreement allow for additional time to resolve pending questions before phase one is complete and the final payment is due.”
LightSquared’s previous incarnation as SkyTerra Communications and Mobile Satellite Ventures reached an agreement with Inmarsat in late 2007 to re-band spectrum assets that would allow both operators to offer hybrid mobile satellite services. The initial phase of that re-banding was triggered in mid-2010 when LightSquared agreed to make payments totaling $337.5 million over an 18-month period to Inmarsat. LightSquared moved forward with “Phase 2″ of the re-banding in early 2011 that called for Inmarsat to make additional spectrum available to LightSquared at an annual cost of $115 million that will increase at a rate of 3% yearly. That deal would have freed up 59 megahertz of spectrum for LightSquared to access.