Iridium, We Hardly Knew Ye by Joanna Glasner

3:00 a.m. Mar. 18, 2000 PST Long after its satellites are permanently pulled from orbit, Iridium will be remembered for two things. One is that its technology changed the face of the global communications. The other is that it was a miserable failure.

Those two themes form the crux of Iridium's history -- its conception a decade ago, the staggering cost of rolling out its 66-satellite network, and its short-lived effort as a satellite telecommunications provider in a world that saw little need for its pricey services.

The satellite network was to shut down at midnight Friday, after last-ditch searches failed to find a qualified buyer to save the struggling system. Now it will begin taking its satellites out of orbit, letting billions of dollars worth of communications gear burn up in the atmosphere.

A sad end for a system that, just 16 months ago, promised to revolutionize the communications world by offering the first phones able to call anywhere on Earth.

Iridium will take its place among the 20 largest bankruptcies in U.S. history, with little to show for its ambitions but a pile of $3,000 satellite phones that no longer work.

Iridium was forced to file for bankruptcy protection in August after failing to find enough subscribers to support the satellite network it spent close to $5 billion to build and maintain. In its first two quarters as a commercial service, Iridium attracted a scant 10,000 customers.

The problem wasn't so much that Iridium didn't work as that it didn't work well enough. Its handsets were clunky, it wasn't functional indoors, and its prices -- often several dollars per minute -- just weren't what customers were used to.

In a world accustomed to sleek cell phones and steadily falling calling costs, Iridium was an idea that arrived after its time was ripe. If Iridium's demise proves anything, it might be that in today's adrenaline-driven technological change, it doesn't take long to make a visionary idea obsolete.

Iridium's failure doesn't mark the death knell for the rest of the satellite communications industry, however. GlobalStar, the second satellite system to launch anywhere-on-earth phone service, is taking a beating among investors in the wake of Iridium's failure. The company has yet to disclose how many subscribers it has signed up.

Meanwhile, Craig McCaw, the telecom serial entrepreneur who backed out of a last-minute bid for Iridium, is going forward with plans to resurrect a less-costly satellite venture, ICO Global Communications.

But putting up a satellite network isn't the same as turning it into a viable business. Iridium's followers have yet to prove that their investments can stay aloft on Earth.

http://www.wired.com/news/business/0,1367,35043,00.html

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-- Martin Thompson (mthom1927@aol.com), March 18, 2000