ICO reports first quarter 1999 results
Presswire - June 21, 1999 14:26
M2 PRESSWIRE-21 June 1999-ICO: ICO reports first quarter 1999 results (C)1994-99 M2
COMMUNICATIONS LTD
* Programme progressing for start of service in third quarter 2000
London -- ICO Global Communications, the global mobile communications company, reported
financial results for the first quarter ended 31 March 1999 and updated its progress toward the start of
its global mobile satellite communications system next year.
As a development-stage company with no significant operating revenues expected until the end of
2000, ICO reported a net loss of $(23.8) million or $(0.11) loss per ordinary share for the first quarter
1999, compared with a net loss of $(35.9) million or $(0.19) loss per ordinary share for the first
quarter 1998. The first quarter 1998 included one-time costs associated with a proposed financing and
the termination of a contract, which if excluded, would have resulted in a net loss for the first quarter
1998 of $(10.4) million or $(0.05) loss per ordinary share. Excluding these one-time costs, the higher
expenses and net loss in the first quarter 1999 compared to the prior year's first quarter were in
support of the company developing its global mobile satellite telecommunications system and ground
network. The details of the results are shown in the accompanying table.
The company continued to invest in the construction of its constellation of 10 medium Earth orbit
satellites (plus two in-orbit spares), 12 satellite access nodes, two satellite control centres, connecting
ground network and two network control centres, and business operations support systems. Capital
expenditures were $192 million during the quarter and the cumulative capital expenditures since
inception stood at $2.2 billion as of 31 March 1999.
Mr. Olof Lundberg, ICO's Chairman and Chief Executive Officer, said, "Third party estimates indicate
that the total demand for mobile satellite services will be between 30 and 40 million subscribers
worldwide. Based on our own recent primary and secondary market research, we believe that the total
number of mobile satellite services end users by 2005 will be at least as high as these third party
estimates. We also believe that ICO will be the global mobile satellite services provider best positioned
from a cost and technological perspective to target all major segments of the mobile satellite services
market."
Mr. Olof Lundberg said, "We are making good advances toward the start of our global mobile satellite
telephone services next year. Three of our satellites are in an advanced stage of their system level
integration and test. Two additional satellites are in their system level integration and test phase. Hughes
is in the process of constructing our remaining seven satellites."
Mr. Lundberg continued, "Our first satellite is scheduled for launch aboard a Proton rocket from
Baikonur, Kazakhstan, in June or July. We have scheduled four additional launches during the third
and fourth quarters of this year. Our remaining seven satellites are scheduled for launch in 2000. We
expect to begin offering our global mobile satellite telecommunications services in the third quarter of
next year."
Mr. Lundberg added, "Before year end, we expect to test voice calls through satellites. Those tests will
validate the design and operation of our key communications components we have proven in our
ground and aircraft tests. In addition, the construction and installation of our satellite access nodes,
control centres, and business system are all proceeding according to plan."
Mr. Lundberg said, "We also have achieved a significant milestone in our ground segment. We have
connected the switch in our satellite access node in Germany with the public telephone network and
have successfully passed telephone traffic with it, so we have validated that our network switching
subsystems for interconnection will work as planned. Similar switching connections are underway at
two additional satellite access nodes and planned at the remaining nodes."
During the first quarter, ICO added two manufacturers for maritime fixed terminals, JRC and Furuno.
Manufacturers of ICO's handheld telephones will include Hughes Network Systems, Mitsubishi, NEC,
Panasonic, and Samsung. Nera will manufacture boat kits and ruggedized marine handsets. Satellite
payphones will be manufactured by Landis & Gyr. A number of other specialised and handheld
terminal contracts are under negotiation. Operating prototypes for many of ICO's handsets and user
terminals will be delivered to ICO this year, and production units will be delivered in quantity to service
partners and service providers next year.
Wavecom has completed development of the ICO engine technology (an electronic module that
contains most of the essential functions of an ICO phone) and is testing a preliminary model of an ICO
phone, including the chipset and radio frequency circuits. Recently, ICO entered into a contract with
De La Rue for ICO subscriber identification module cards and a contract with The Technology
Partnership for ICO phone software.
"Distribution of ICO's services remains vital to our success," said Mr. Lundberg. "Our strategic
investors (telecommunications and technology companies around the world) have formally expressed
interest in distributing our products and services in 186 markets. We believe those markets represent
substantially all of the estimated potential global mobile satellite services markets in the world. During
the quarter we advanced our distribution commitments by signing four additional pre-launch
agreements, bringing the total to 23. Since the end of the quarter, four more have been added. The
pre-launch agreements precede the final distribution agreements. We expect to progressively roll-out
the marketing of our satellite services starting in the third quarter next year and ultimately to distribute
our services in all 186 markets."
Mr. Lundberg said, "We continued to extend our first commercial service, ICOroam, during the
quarter, achieving sales of $ 468,000. Today, five telecommunications companies - KPN of the
Netherlands, Cellnet of the UK, Pacific Cellular of Taiwan, TMN of Portugal, and Eircell of Ireland -
are offering our international inter-protocol roaming service."
ICOroam allows GSM cellular users to access the popular cellular standard (ANSI-41 - AMPS) in
the United States. Before travelling, an ICOroam subscriber receives an AMPS-capable handset -
either by renting or buying it. All calls to the subscriber's home cellular number are automatically routed
through public and cellular networks to the handset. The airtime charges appear as part of the
subscriber's billing from his home cellular network operator.
Mr. Lundberg said, "I am especially pleased to welcome Richard Greco, who will join ICO as chief
executive officer on 17 May. He brings 20 years of senior management experience in international
telecommunications, including his most recent record in establishing a successful satellite-based
business from scratch. His strong operational and cost-management skills combined with his
experience in launching innovative and differentiated products will be particularly relevant to ICO's
future."
Mr. Greco will be responsible for the company's day-to-day operational management and execution of
the company's business plan. Mr. Lundberg will continue to serve as ICO's executive chairman and
provide strategic leadership and vision, manage the relationship with the Board of Directors, and lead
relations with the company's stakeholders.
On 7 April, ICO announced a rights offering in which ICO shareholders may purchase one additional
ICO ordinary share at $5 per share for each ICO ordinary share they own on the record date. ICO
shareholders may also oversubscribe for additional shares, which will be subject to availability. Subject
to the review by the U.S. Securities and Exchange Commission, the rights offering is expected to begin
in early May and to be completed before the end of May. All registered ICO shareholders will receive
a copy of ICO's prospectus and related materials by mail soon after the registration with the S.E.C.
becomes effective. The minimum gross proceeds required for the offering to be completed is $500
million. Proceeds from the offering will be used principally to continue funding the creation of ICO's
satellite, ground, and distribution network for global mobile satellite telecommunications. The rights
offering will be made only by means of a prospectus.
Mr. Lundberg concluded, "In summary, the ICO system is developing on plan. We expect to offer the
best combination of high-quality services, wide choice of handsets, and excellent customer care, all at
competitive prices."
Certain of the matters discussed in this news release are forward-looking statements that involve risks
and uncertainties, including, without limitation, technical, regulatory, operating, competitive and market
risks, risks relating to ICO being a development-stage company, and other risks and uncertainties.
These are detailed in ICO's documents filed with the U.S. Securities and Exchange Commission.
Editors' Notes:
ICO Global Communications (NASDAQ: ICOGF) was established in January 1995 as a private
company to provide global mobile personal communications services by satellite, including digital
voice, data, fax and messaging services. It has raised about $3 billion to date from equity and debt
investors. Among its investors are more than 60 strategic partners and investors, comprising
telecommunications and technology companies from more than 50 markets around the world. In July
of 1998, ICO was listed on NASDAQ in New York and became a public company.
ICO expects to begin mobile satellite services operations in the year 2000. Its satellite services are
expected to be used by international and domestic cellular users who roam outside areas covered by
compatible cellular networks from business, industry and government organisations, mining,
transportation, aeronautical, maritime, media and other sectors, as well as residents of rural and remote
areas lacking adequate local communications.
ICO's services will be based on a new generation of pocket-sized mobile phones that will allow users
to make and receive calls at any time, anywhere in the world. The handsets will be dual mode, capable
of working on satellite, cellular and PCS networks. Using their handsets, customers will be able to
roam between ICO and mobile networks around the world. If no cellular network is available, the
handset will roam to ICO's satellite network to offer customers unrestricted mobility and accessibility
for their communications needs.
Affordable services will be available to a wide range of users - from people living and working in
remote rural areas to the international business traveller. In addition ICO will offer services to the road
transport, maritime and aeronautical sectors.
CONTACT: Michael Johnson, ICO Global Communications Tel: +44 (0)181 600 1255 Fax: +44
(0)181 600 0604 e-mail: michael.johnson@ico.com Tom Myers, ICO Global Communications Tel:
+44 (0)181 563 0301 Fax: +44 (0)181 741 0856 e-mail: tom.myers@ico.com WWW:
ico.com
*M2 COMMUNICATIONS DISCLAIMS ALL LIABILITY FOR INFORMATION PROVIDED
WITHIN M2 PRESSWIRE. DATA SUPPLIED BY NAMED PARTY/PARTIES.*
Headlines Previous Story Next Story
ICOGF V%M2 P%M2PR
|
