Iridium Unveils New Strategy; Announces Lower Phone and Service Pricing
Business Wire - June 21, 1999 09:39
WASHINGTON--(BUSINESS WIRE)--June 21, 1999--Iridium (NASDAQ: IRID) unveiled today
a revamped marketing strategy, which has as its cornerstone significantly reduced and simplified
service and equipment pricing. The new strategy focuses on delivering tailored communications
solutions to customers in the industrial marketplace that have the greatest immediate need for satellite
communications services. The aggressive new strategy aims to position Iridium as a key player in the
market and to drive sales worldwide.
"The feedback from the market provided two essential messages -- lower and simplify the pricing and
focus on the customers who have the greatest need for the service," said John Richardson, Iridium
Chief Executive Officer. "We have responded with price reductions that will allow our service
providers to offer service price reductions of up to 65% of the original price. We have also simplified
pricing so each customer will enjoy a flat per minute rate for international calls. In doing so we have
repositioned Iridium as a competitively-priced telecommunications solution for our customers --
whether they are industrial users in mining, maritime, oil and gas, or individual users on business travel
or vacation - any customer that has a need to communicate from remote locations."
Motorola and Kyocera have also announced significant reductions in the wholesale prices of their
satellite subscriber product for the Iridium system. Motorola is introducing new pricing on the entire
portfolio of Satellite Series(TM) handsets, pagers, and select accessories. Kyocera plans to reduce the
price of its satellite voice handset. Effective July 1, Iridium customers will be able to purchase Iridium
system equipment at extremely competitive and affordable rates.
In addition to pricing, Iridium is rolling out a more customer-driven approach to the marketplace. By
creating service packages tailored to specific market segments, including both the industrial and
personal markets, Iridium will provide solutions to the unique communications needs of its customers.
"We have a number of specialty products, including antennas for a variety of applications, solar
chargers and portable docking stations for the phones, not to mention the cellular cassettes and pagers,
that allow each service provider to deliver precisely the service its customers need," said Sue
Kennedy, Vice President of Marketing and Distribution. "With reductions in both the equipment and
service prices, our service providers will now have even greater flexibility and our customers will now
be able to benefit from Iridium services at less than half of the original cost."
Iridium gateway distribution is being strengthened worldwide. In support of this effort, for example,
Motorola, under the direction of its Global Satellite Solutions Group, is putting trained salespeople on
the street to sell Iridium services and Iridium system products in an effort to reach the important
industrial markets. Motorola will have a direct sales force of 200 in the United States by the end of this
month. Motorola has also engaged its other product distribution teams around the world to assist
gateways and service providers with sales of Iridium services and Motorola Satellite Series products.
Additionally, Iridium is working with existing satellite service providers that currently sell to these
industrial customers across multiple markets.
Iridium LLC recently received from its lenders a 30-day waiver of the financial covenants relating to
customers and revenues under its $800 million Senior Secured Credit Facility. Iridium has taken
advantage of this extension to make these important changes in its marketing and distribution strategy.
Iridium is continuing to work with all its lenders to restructure its financing.
With regard to the impact of the pricing changes on Iridium's long-term effort to meet its business plan,
John Richardson said, "These significant reductions have a short-term impact on our bottom line;
however, we believe that the combination of attractive pricing and customer-driven service will
ultimately help us to load the customers, and see the usage we need to make this business a financial
success."
The overall health of the constellation remains excellent. Iridium recently celebrated its 20th
consecutive successful launch, deploying two satellites that will act as spares for the Iridium
constellation. With the network performing at a high level of quality, subscriber equipment now widely
available and a comprehensive new equipment and service offering, Iridium is truly entering the
commercial phase better prepared to address its customers' needs.
Iridium LLC became the world's first global satellite phone and paging company on November 1,
1998. Its network of 66-low earth orbiting satellites, combined with existing terrestrial cellular systems,
enables customers to communicate around the globe. Iridium World Communications, Ltd.
(NASDAQ: IRID) is the public investment vehicle of Iridium LLC.
This release contains forward-looking statements, including statements regarding projected revenues
and subscribers, service enhancements to the Iridium system and equipment availability. These
forward-looking statements are based on a number of assumptions and actual results may be materially
different from those expressed or implied by such statements. For a description of factors which may
cause results for Iridium to differ materially from those expressed or implied by such forward-looking
statements, please consult the Securities and Exchange Act filings of Iridium World Communications
Ltd. (Nasdaq: IRID).
Iridium is a registered trademark and service mark of Iridium IP LLC.
MOTOROLA SATELLITE SERIES are a trademark of Motorola Incorporated.
CONTACT: Iridium
Michelle Lyle, 202/408-3818
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