Iridium Heading Out of Orbit? : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

Iridium Heading Out of Orbit? by Joanna Glasner

5:30 p.m. Mar. 16, 2000 PST Iridium, the staggeringly costly and ambitious satellite network designed to provide phone service anywhere on Earth, may be hours away from permanently shutting down.

The company will hold a hearing Friday afternoon in Bankruptcy Court for the Southern District of New York to put forth any final plans to save its 66-satellite network. If no new bids are accepted, Iridium service is expected to shut down by midnight.,1367,35009,00.html

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-- Martin Thompson (, March 17, 2000



Iridium Shutdown Set; No White Knight

Story Filed: Friday, March 17, 2000 5:30 PM EST

NEW YORK (Reuters) - Iridium World Communications Ltd. has failed to attract a qualified, last-ditch offer to rescue it from liquidation and now will begin pulling its satellites out of orbit, letting billions of dollars worth of space-age communications gear burn up in the atmosphere.

``No bid was received which was a qualified bid,'' Iridium attorney William Perlstein told the U.S. Bankruptcy Court in Manhattan on Friday afternoon.

Perlstein told the court the company had been in discussions with three bidding groups through Thursday, but no deal could be reached that met its requirements. He did not identify the potential buyers.

The attorney's statement to the court essentially marked the end of an ambitious, $5 billion project to provide telephone service to any spot on the globe through a system of 66 low-earth-orbit satellites.

After what seemed a promising launch, Iridium fell into bankruptcy protection in August 1999 after sales of its phones and service proved hugely disappointing. Critics said the service and equipment were too costly, the phones were too bulky and the service was too erratic.

A $600 million plan by cellular phone pioneer Craig McCaw to rescue the company fell apart earlier this month when McCaw and his investment group backed out of the deal.

The bankruptcy judge approved a liquidation budget of $8.3 million to cover expenses through April 30 as Iridium brings the satellites out of orbit and sells off the company's remaining assets.

The satellites will literally burn up as they are pulled from orbit.

Telecommunications equipment maker Motorola Corp. (MOT.N), which conceived of and built the system, has been operating the satellites. Motorola has said the system will cease functioning at 11:59 p.m. (04:59 GMT) on Friday if no buyer were found.

Copyright ) 2000 Reuters Limited.

-- (, March 17, 2000.

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Iridium Wants To End Phone Service

Story Filed: Friday, March 17, 2000 6:21 PM EST

NEW YORK (AP) -- Iridium LLC gave up its search for new backers on Friday, and a bankruptcy judge gave the mobile phone company permission to cut off service to 55,000 customers and burn its satellites in the Earth's atmosphere.

``We do not have a qualified bid,'' William Perlstein, a lawyer representing the debt-plagued company, told U.S. Bankruptcy Judge Arthur Gonzalez at an afternoon hearing in Manhattan. In all, more than 80 parties had been contacted in the futile search for new investors, he explained.

With that, Judge Gonzalez granted the company permission to begin ``de-orbiting'' its $5 billion constellation of 66 satellites by sending them to burn up in the Earth's atmosphere, a process that may begin in the next two weeks.

The ruling capped a stunning corporate embarrassment for Motorola Corp., Iridium's lead investor, and other major companies who funded the often quixotic quest to link up the remotest reaches of earth with powerful mobile phones.

Iridium's tortured saga began looking hopeless two weeks ago when wireless phone pioneer Craig McCaw scrapped plans to expand his budding satellite empire with a bailout of the company.

While Motorola has said it will shut off the mobile phone service at midnight on Friday, pulling down the satellites is a longer process that may take up to two years, Perlstein said. The satellites would be moved four at a time into a lower orbit, where they would ultimately burn up in the earth's atmosphere, he said.

Iridium filed for bankruptcy court protection from its creditors last August, unable to make payments on some $4.4 billion of debt, but hoping to reorganize and turn profitable.

While Iridium has more than tripled its subscriber base since last summer, the customer count was still well shy of the levels needed to keep the company afloat without another cash infusion from Motorola and its other hesitant backers.

The service, launched in late 1998, stumbled out of the starting gate amid complaints about large clunky phones and prohibitive prices -- as much as $3,000 per phone and up to $7 per minute for calls.

Prices for the phones and calls were cut sharply last summer, but too late to restore customer confidence, especially with an aggressive new rival named Globalstar introducing service in recent months.

``There was a substantial issue as to whether there was a sufficient market for satellite telephone service,'' said Joseph Bondi, the chief restructuring officer for Iridium said. ``It just hasn't been demonstrated there would be sufficient demand.''

Discussions with possible purchasers for Iridium had continued through early Friday, but no big-name corporate saviors had come forward. The only known bidder was Gene Curcio, owner of Los Angeles- based Crescent Communications Inc., a privately held telecommunications company.

On the Net: Iridium at

Iridium bankruptcy filing: case--doc?416,2637 (Adobe Acrobat Reader needed to read documents)

Copyright ) 2000 Associated Press Information Services, all rights reserved. cb=200&dx=2006&sc=0#doc

-- (, March 17, 2000.

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