LightSquared CEO abruptly resigns amid uncertainty over company’s future

LightSquared logoSanjiv Ahuja, CEO and co-founder of LightSquared, resigned his position with the mobile broadband provider today. The decision comes after months of controversy regarding the company’s satellite-augmented wireless broadband, which would operate on a spectrum adjacent to GPS. The surprising move casts serious doubt over the future of an innovative technology that promised to revolutionize the wireless broadband industry.

LightSquared first won approval from the FCC in 2001 to use a combination of spot-beam satellites and ground base stations to introduce nationwide 4G broadband, while relying only on existing wireless spectrum. Quickly, however, GPS-sensitive industries such as defense and aviation, signaled concerns that the wireless technology could interfere with current GPS equipment.

Those concerns may be well founded: After a series of government tests confirmed LightSquared’s technology did indeed have a significant impact on GPS telemetry, the FCC threatened to withdraw LightSquared’s license to operate entirely. “Based on NTIA’s independent evaluation of the testing and analysis performed over the last several months, we conclude that LightSquared’s proposed mobile broadband network will severely impact GPS services and that there is no practical way to reduce the potential interference at this time,” The National Telecommunications and Information Administration said in a letter to the FCC, according to Wireless Industry News. Initially calling the government’s testing methodology “severely flawed,” LightSquared has since admitted to GPS signal interference, but says it has developed an inexpensive workaround for the issue. The government has set the middle of March as the time by which LightSquared must have its GPS ducks in a row.

If the company is indeed forced to go dark in March, it would essentially mean invalidating the 30 or more broadband contracts Mr. Ahuja has spent the past decade inking – such as a reported $9 billion deal with Sprint for that wireless carrier to purchase up to 50 percent of LightSquared’s 4G wireless bandwidth. LightSquared has also committed an estimated $7 billion to Nokia Siemens to build-out its ground base stations over the next eight years. It would seem an unusual time for the CEO to resign if LightSquared indeed expected to be granted approval to continue operations after next month. Mr. Ahuja’s hasty departure seems to point to a more ominous prediction within the company.

“During my tenure at LightSquared, we all worked tirelessly to create the nation’s first open wireless broadband network and provide consumers with a new wireless broadband experience,” Mr. Ahuja said in a press release. “That work continues and I wish the company and its fine management team well as they work to achieve this important goal.” Mr. Ahuja will be replaced in the short-term by both the chief network officer, Doug Smith, and chief financial officer, Marc Montagner.