Mathematica implements MathLM as its license manager installed in a server which provides service to its clients through the TCP port.
If the math kernel asks for the license then either the math license manager is stopped at the server end or the connection to server is broken or the most probable cause for first time users is that the license server name is not provided.
To check whether the user has licensing information stored is to check for a file called "mathpass".
It is generally located in $HOME/.Mathematica/Licensing/mathpass
or in /usr/local/mathematica/Configuration/Licensing/mathpass
It should contain entries like ( for local installs )
machinename xxxx-xxxx-xxxx xxxx-xxxx xxxx-xxx-xxx:x:xx home user
or (for network licenses)
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