I'm not even that smart and can see these guys did not get much right!?
cbs.marketwatch.com
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The fate of Iridium, the world's first global satellite phone service, may have been sealed Friday when cellular pioneer Craig McCaw decided not to bid for the satellite carrier's assets. Iridium, the brainchild of Motorola (MOT: news, msgs), is now in bankruptcy protection.
Iridium was sunk in large part by a lack of demand and sky-high costs, though bulky phones, poor marketing and manufacturing snafus also played key roles.
McCaw, through his venture firm, Eagle River Investments, dropped his pursuit of Iridium after deciding that the carrier's satellite system is not suitable for McCaw's aim of creating a high-speed data and Internet service.
The wonder is that it got this far. Iridium's $5 billion satellite system, a decade in the making, is quite capable of providing adequate phone service. Yet the low-orbiting network clearly was not designed to handle high-speed or data-intensive applications required by Internet use.
McCaw considered using the satellites, which he would have purchased at a heavy discount, as a bridge technology until the more ambitious Teledesic project is launched in 2004 or so. The aim of Teledesic, another multibillion-dollar effort, is to provide global high-speed access, especially for businesses.
Teledesic itself, interestingly, could face the same problems that Iridium encountered if the project ever gets off the ground, predicts Herschel Shosteck Associates. The research firm was the first and earliest of Iridium's critics, arguing as far back as 1992 that the venture was doomed to failure.
Iridium was sunk in large part by a lack of demand and sky-high costs, though bulky phones, poor marketing and manufacturing snafus also played key roles.
With terrestrial cellular networks rapidly expanding around the globe, the need for a satellite phone has lessened. Land-based high-speed networks could also expand quickly, thereby reducing demand for satellite access, skeptics say.
Still, McCaw is not deterred. He's rescuing another bankrupt satellite carrier, ICO Global Communications, on the promise that the company's developing network is better suited to high-speed and data traffic. ICO still has not launched any satellites.
"After careful examination of Iridium's technologies, we determined that there are closer synergies between ICO and Teledesic and the services they will provide customers worldwide," said Dennis Weibling, president of Eagle River Investments. See press release. |
