Teledesic 'in limbo' as partners waver
By Theresa Foley
07 June 1999
Motorola Satellite Communications, of Chandler, Arizona, confirmed last month that it has
reassigned workers from the Teledesic broadband satellite venture to other projects.
Observers say the move is a sign of serious trouble for the broadband satellite project,
backed by Bill Gates and Craig McCaw.
Motorola has been negotiating for a prime contract to oversee manufacturing and
deployment of the entire system from Teledesic LLC, Kirkland, Washington, since last May
when the partnership was announced. At the time, Motorola said it would commit $750
million to the venture, but as chief backer of troubled Iridium LLC, Washington DC,
Motorola's ability to contribute to Teledesic apparently is now in question.
"We're still in negotiations with Motorola. The less said the better," said Teledesic
spokesman David Bowermaster. Karen Culver, spokeswoman for Motorola, confirmed that
negotiations were still in progress, adding: "The relationship is not broken."
But an industry official from one of the companies hoping for a subcontracting role on the
project described the project as in limbo. "The big picture doesn't look good, but ... people
are still working on Teledesic, although I'm not sure it's sensible," he said. "The other point
of view is that Motorola is playing hardball with Teledesic and making a point to the people
in Kirkland that they had better cut a deal."
But Tom Watts, vice president at Merrill Lynch & Co., New York, said Teledesic is "almost
better off without Motorola." He added: "Motorola, because of Iridium, said it would
provide no financial support to Teledesic.
If your prime contractor can't provide that, it makes it almost unfinanceable."
Motorola's Culver said she did not know how many employees have been taken off the
Teledesic project, describing the move as "a small internal realignment."
Matra Marconi Space SA, which is providing the satellite platforms for the project, has also
shrunk its Teledesic workforce. In mid-May the company recalled around 15 engineers from
Phoenix, Arizona, and transferred Toulouse-based engineers onto different work. "A big
part of the team working on Teledesic have been reassigned to other projects," confirmed
Remi Roland, a company spokesperson.
The company has also redoubled its efforts to build two alternative broadband systems,
the West Early Bird (WEB) and the Wideband Satellite System (WEST), as part of a
European Space Agency initiative. WEB, a regional Ka-band system for multimedia
applications, is expected to be operational by 2003.
Matra has already applied for an orbital position for WEST, an ATM-based routing satellite
incorporating technology from Nortel Networks, Roland said.
Niall Rudd, broadband consultant at Communications Systems (Comsys) of St. Albans,
England, said there is sufficient interest in satellite broadband projects among other
potential sponsors for Teledesic to survive a Motorola pull-out. "There is an amount of
hysteria over Iridium affecting the situation, and Motorola needs to put all the resources
they can into that," he said. Information : info@total.emap.com
URL : totaltele.com
© EMAP Media 1999
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