Teledesic contemplates early market entry to scoop struggling LEOs
October 1, 1999
By Antony Bruno
While the bankruptcies of Iridium L.L.C. and ICO Global
Communications have cast doubt on the mobile satellite services market,
fixed satellite services provider Teledesic L.L.C. believes it may find a
way to benefit from these difficulties.
Teledesic is wireless visionary Craig McCaw?s idea for an ??Internet in the
sky,?? a satellite-based global broadband network not expected to offer
service before 2004.
But the company said it is examining possibilities that may allow it to
launch service sooner by taking advantage of Iridium?s and ICO?s plights.
??Teledesic has decided to explore a variety of early-entry opportunities,??
said Bill Owens, Teledesic?s co-chief executive officer. ??We believe these
new opportunities may enable Teledesic to more quickly establish a
leadership position in the satellite communications marketplace while also
generating early revenue.??
The company did not specifically mention Iridium or ICO, but Owens
made reference to struggles experienced in the satellite industry.
??Despite current conditions in the satellite communications market,
Teledesic is in an enviable position,?? he said. ??We have money in the
bank. We have the time necessary to evaluate opportunities created by
the unfortunate difficulties of others.??
The company has raised $1.5 billion in private financing to date, and is
backed by the big names of McCaw and Microsoft Corp. Chairman Bill
Gates. Also listed as an investor is Motorola Inc., which has the largest
exposure to the faltering Iridium and may be leveraging its contractor
relationship with Teledesic to lessen its financial risk.
??We remain fully committed to Teledesic?s vision of delivering global,
broadband communications, but we believe it is prudent for us to continue
the review of our proposed system with Motorola,?? Owens said.
It is unclear what opportunities the Iridium and ICO bankruptcies might
provide Teledesic. Both low-earth-orbit satellite companies built or are in
the process of building narrowband voice networks. Teledesic requires a
lot more bandwidth and spectrum than the existing constellations can
provide.
Analysts speaking on background said they can?t see what opportunities a
narrowband satellite system can provide a broadband data system. Short
of uploading new software into the satellites themselves, there is no way to
alter the satellites once they have been launched and placed in orbit.
Neither Teledesic nor Motorola are commenting on exactly what potential
opportunities exist as a result of the recent bankruptcies, nor are Iridium
and ICO.
In other Iridium news, Japanese Iridium investor and carrier DDI Corp.
and Iridium handset provider Kyocera Corp. reportedly plan to contribute
$46 million to the Iridium restructuring effort.
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October 1, 1999
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