Report: LightSquared eyes former Nextel chief Donahue for CEO spot

LightSquared is considering hiring former Nextel CEO Tim Donahue as its new chief, according to a Reuters report. The report, which cited an unnamed source, did not indicate how close LightSquared was to hiring Donahue, a long-time telecom industry veteran. 

Sanjiv Ahuja said Tuesday he would step down as the CEO of LightSquared. Two other LightSquared executives, Doug Smith and Marc Montagner, were named as the company's interim co-chief operating officers while LightSquared searches for a new CEO. Importantly, the company said it is not abandoning its plan to build out a nationwide wholesale LTE network.

A LightSquared spokesman declined to comment on the Reuters report. A spokesman for Harbinger Capital Partners, the hedge fund backing LightSquared, also declined to comment.

Donahue is an industry veteran who had to deal with spectrum rebanding issues related to Nextel's deployment, and could help LightSquared navigate the challenges it faces at the FCC. LightSquared has been unable to convince regulators that its network operations will not interfere with GPS receivers. LightSquared was dealt a crippling blow last month when, based on testing evaluated by the National Telecommunications and Information Administration, the FCC said it would not allow LightSquared to build its planned wholesale LTE network.

Meanwhile, Republican lawmakers in Congress have asked the FCC for documents related to LightSquared's acquisition of its L-band spectrum licenses as well as the FCC's approval of a conditional waiver that allows LightSquared's wholesale customers to offer terrestrial mobile broadband service. The waiver was conditioned on concerns over GPS interference being resolved before LightSquared could launch commercial service.

In July 1999 Donahue became CEO of Nextel, just months after it recorded its 3 millionth customer. Under Donahue, Nextel recorded nine straight quarters of positive net income, and through the introduction of services like two-way messaging in 2000, began steadily picking up even more customers, reaching 6 million subscribers by the third quarter of 2000. In December 2004, Donahue maneuvered Nextel into a blockbuster $35 billion merger with Sprint. The deal merged a traditional cellular company in Sprint with one that was geared more toward enterprise and public-safety workers in Nextel. In hindsight, the challenges of integrating two different networks (CDMA and iDEN), cultures and companies proved to be far more difficult than either company likely imagined, and the deal wound up being one of the worst wireless mergers of all time from a financial perspective. Donahue retired as Sprint's chairman in December 2006. 

For more:
- see this Reuters article
- see this Multichannel News article
- see this The Hill article
- see this Politico article

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