DOD out millions with Iridium BY Paula Shaki Trimble 03/21/2000 Most of the Defense Departments multimillion-dollar investment in the now-terminated Iridium satellite telephone system is a loss, according to a DOD spokeswoman.

Iridium LLC, which operated a network of 66 low-Earth orbiting communications satellites, terminated commercial service Friday after failing to find an investor to revive the bankrupt venture. The U.S. Bankruptcy Court for the Southern District of New York approved use by Iridium, backed primarily by Motorola, of its secured lenders cash collateral to begin bringing the satellites back to Earth and selling its assets, according to an Iridium news release.

The Defense Department in April 1999 awarded Motorola Inc. a $219 million contract to provide Iridium equipment, handsets, telephones, pagers, accessories and associated airtime services. The services would be provided to the federal government through its own Iridium gateway in Hawaii. About $140 million of that had orders written against it, said Susan Hansen, DOD spokeswoman.

"The department is continuing to assess what we can retrieve from our investment in the Iridium system," she said. "Some of the elements of the gateway, such as the high-quality, digital switching equipment at Hawaii, will have residual value and might be reused. The handsets are unlikely to find other applications. Most of the investment is probably lost."

Fortunately, DOD had not started to field the operation throughout the department, Hansen said. The governments gateway has about 3,000 registered users but only about 800 of those were military users, she said.

Iridium filed for Chapter 11 bankruptcy protection on Aug. 13, 1999

http://www.fcw.com/fcw/articles/2000/0320/web-iridium-03-21-00.asp

-- Martin Thompson (mthom1927@aol.com), March 21, 2000