What is billionaire investor Carl Icahn doing snooping around LightSquared's debt? That's what reports are saying, apparently he and Andrew Beal and David Tepper have purchased $300M of the prospective LTE upstart builder. Buying up debt at a company's weakest moments is a common way for Icahn to gain control of troubled assets.
LightSquared is sitting on spectrum worth $4B that it can't use for LTE without final FCC approval that the potential for interference with GPS is solved. That approval seems increasingly unlikely now, but for an owner with more staying power and a new plan for the spectrum I suppose it could be an opportunity. As I've been saying, the GPS industry may succeed in stopping LightSquared, but spectrum is scarce and sooner or later they're going to have to compromise.
But Icahn buying more telecommunications stuff? A reader sent in thoughts that he might combine it with XO, which itself is sitting on a pile of higher frequency backhaul spectrum and quite a lot of metro fiber in urban areas. A wholesale wireless network built on top of those assets might be an overall better idea than what Falcone conceived. It's an interesting vision
But I just don't buy it for the simple reason that it's hard, and Icahn doesn't do hard. That scenario would require him to invest or raise many, many more billions of dollars in a project that is definitely not a sure thing, create jobs, actually build something new, and nurse it into something that makes a profit.
It's just far less likely than the idea that he thinks he can get spectrum cheap now that he knows AT&T is going to need badly enough to fight the GPS industry for in a couple of years, and that all he has to do is get a piece of it now and sit on it.
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