Bernard and all,
Motorola Cancels Celestri to Join Teledesic Dream Team
By Sheridan Nye
21-MAY-98
Motorola has folded its broadband satellite project Celestri into Teledesic to become its former rival's lead industrial partner. Satellite manufacturer Matra Marconi Space will also join the consortium as Teledesic's first European partner.
Craig McCaw, Teledesic chairman and co-ceo, described the new line-up as his "dream team. The globalization of this effort has begun in earnest," he said.
Motorola will become prime contractor, joining Boeing Co. which has worked on a blueprint 288-satellite constellation for the Internet-in-the-Sky system since April 1997. For a total investment valued at $750 million, Motorola will receive a 26% stake, diluting other holdings including that of Microsoft chief, Bill Gates. The investment includes an undisclosed proportion of cash and design and development contracts.
Motorola ceo Chris Gavin said the company would contribute experience gained from the Iridium global mobile satellite system which now has its full 66 satellites in low Earth orbit.
Asked about the financial risk involved in such an ambitious system, Gavin said demand for global broadband connectivity remained "overwhelmingly compelling".
McCaw has had close ties with Motorola for several years, firstly though McCaw Cellular Communications, which he sold to AT&T in 1994, and through Nextel Communications where he is leading shareholder. Both Boeing and MMS have been involved in Iridium; Boeing supplying Delta II launch vehicles and Matra as a manaufacturer.
All the parties denied that today's deal would effectively restrict the award of Teledisic contracts to the founding group, although Boeing confirmed it is likely to take the bulk of launch and software integration work.
Gavin insisted Motorola had not incurred any significant losses from its contractors by cancelling the $13 billion Celestri system. Of the few already awarded most were for research and development work that would be folded into Teledesic, he said.
But analysts pointed out that any cross-fertilization between Teledesic and Celestri's complex system of 63 Leos and up to nine Geos would amount to a significant redesign. This would require a refiling to the US regulator which could hold up the whole project, said Jeremy Rose of Comsys consultancy, St Albans, UK. He also questioned the necessity for consolidation. "If there is enough demand for one system, there is enough for two," he said.
Fern Jarmulnek, chief of the Federal Communications Commission's satellite policy branch confirmed that any significant changes to the Teledesic system would require a resubmission. This could take several months to process depending on the number of comments received and whether the redesign raised interference issues, she said.
Boeing was rumored to have unearthed additional costs associated with Teledesic's planned 288-satellite constellation that would push its costs well above the $9 billion originally projected. But president and coo, Harry Stonecipher, said the world's largest aerospace company had "never been more confident" about Teledesic.
However, McCaw refused to pin down a figure saying the system would be scaled up or down according to demand. Motorola has facilities in Arizona already equipped for satellite mass production which would reduce the time to service, he pointed out.
One casualty of the deal could be Hughes Electronics whose vice chairman Steven Dorfman revealed just two weeks ago that the company was in preliminary discussions about joining Teledesic. Boeing's Stonecipher said today that talks with Hughes were continuing, but the aerospace company looks to have been cut out of the loop for the time being.
It's not been a good week for Hughes, which built the PanAmSat Galaxy IV satellite which failed earlier this week taking out most of the US paging networks and several broadcast services.
Hughes is also embroiled in the political row over the export of US satellite technology to China.
Brian H.
|
