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LightSquared Puts Out CEO's Torch

LightSquared Puts Out CEO's Torch

The management shuffling now going on at LightSquared may represent a last-ditch effort to retool the company's strategy as it teeters on the brink of collapse. Its CEO has stepped down, and multibillion-dollar investor Philip Falcone has joined the board. "What stops he can pull out, what changes he can make -- it's hard to say right now," said tech analyst Jeff Kagan.

By Erika Morphy E-Commerce Times ECT News Network
02/29/12 2:19 PM PT

There has been a shakeup in LightSquared's executive ranks following the Federal Communications Commission's refusal to let the company launch its high-speed wireless network due to potential disruptions to devices that rely on the Global Positioning System.

LightSquared's chief executive, Sanjiv Ahuja, has stepped down. Doug Smith, the company's chief network officer, and Marc Montagner, its chief financial officer, will serve as interim co-chief operating officers until a permanent CEO can be found. LightSquared has said that the search for a CEO will be completed in the near future. Ahuja will continue to serve as chairman of the board.

Joining the board will be Philip Falcone, CEO and CIO of Harbinger Capital.

LightSquared declined to provide further details.

Fighting Words

The musical chairs game in upper management does not mean the company is giving up on its mission of offering a 4G wireless alternative.

The company will continue to move ahead, Falcone said, despite the setbacks. It is committed to working with appropriate entities to find a solution to the recent regulatory issues.

One reason Ahuja stepped down may be that the way he addressed the GPS controversy was considered too combative. He insisted that LightSquared's 4G wireless network would pose no risk as evidence mounted --and then mounted some more -- that it would indeed interfere with GPS functionality.

Prior to the FCC's damning decision, the lowest point for the company was perhaps when tests conducted by the U.S. Air Force's Space Command reached that conclusion. LightSquared decried the results, claiming the tests were rigged.

LightSquared didn't come off looking good from this episode, but it is hard to know what else Ahuja could have done, telecom analyst Jeff Kagan told the E-Commerce Times.

"LightSquared has been battling an array of forces that would have done in a less nimble company already," he said.

A Happy Ending?

As it is, the startup is surely in the process of dying a slow death, Kagan added. Its only saving grace is Falcone's determination to see the mission through, having already invested billions of dollars in the company.

However, "what stops he can pull out, what changes he can make -- it's hard to say right now," Kagan remarked. "If he is able to pull it off, it will go against every logical instinct that says otherwise."


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