IRIDIUM CEO BOASTS OF SUCCESSES BUT STAYS QUIET ABOUT PROBLEMS (via I* thread)
(Satellite News; 03/15/99)
Mar. 15, 1999 (SATELLITE NEWS, Vol. 22, No. 11 via COMTEX) -- Iridium LLC
[IRID] CEO Ed Staiano tried to put a positive spin on the company's slower-than-
expected pace in gaining subscribers by boasting about the 66-satellite
system's improved performance during a news briefing last week.
The ground rules established by Staiano for the briefing only allowed
questions about Iridium's attempts to sell its global mobile services to
"vertical markets," avoiding talk of problems that have hurt the pioneering
global, mobile satellite voice services provider. The vertical markets that are
expected to become the best niches are those with the heaviest mobile
communications users, such as government, the oil and gas industry and
utilities companies, said Staiano, who also likes the potential of the aircraft
market.
To boost Iridium's sagging reputation, Staiano said the system now offers 99.9
percent satellite and Earth station availability, 96 percent connection of all
calls attempted and a 4 percent dropped-call rate. Those performance figures
mark an improvement from last November when Iridium began commercial service
without resolving all of its various technical challenges.
Those early performance problems with the Iridium system, slower than expected
sales and the need to renegotiate terms of a bank loan recently have driven
down the company's stock price. However, Staiano said that "technically" the
constellation no longer had "any problems of substance."
The delay in the availability of Kyocera Corp. [KYO] handsets also could be
resolved by this week [Note: 11/1/98 to mid-3/99 delay], Staiano said, as lingering software problems with the
devices are corrected. Motorola Inc. [MOT], the other handset supplier and
Iridium's main contractor and financial backer, already is shipping phones.
Robert Kaimowitz, a satellite analyst with ING Baring Furman Selz, issued a
report on Iridium last week suggesting prices, not a lack of handsets, were
slowing sales. Iridium's retail price per minute of satellite use is between
$6-7 for handsets priced at $3,000 to $4,500 each. In contrast, the Inmarsat
Planet-One/Mini-M service costs $2-3 a minute for similarly priced terminals.
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