THz time-domain spectroscopy (TDS) is a promising tool for quality control purposes in industrial applications, but the high cost and the relatively large laser sources still make it difficult to use the full potential of the technology for a decent price. In this work, a THz TDS system, which uses a commercially available Fabry–Perot laser diode emitting at 1550 nm, is presented. By dispersion compensation, pulses with a duration of 544 fs were generated, resulting in THz radiation with a bandwidth of 1.4 THz and a peak dynamic range of 56 dB with state-of-the-art ErAs:In(Al)GaAs photoconducting antennas. These results are compared with those of a conventional and expensive fiber laser system with a 90 fs pulse duration.