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To: djane who wrote (5413)	6/28/1999 2:19:00 PM
From: djane	Read Replies (1) \| Respond to of 29987

Iridium Floats New Approach To Market From the June 28, 1999, issue of Wireless Week By Monica Alleven Seven Seas Communications, a reseller of Iridium LLC service, lowered airtime rates earlier this month. With Iridium's price cuts last week, Seven Seas will be able in July to drastically reduce prices on Iridium handsets, from $2,295 each to about $1,000. That might help sell more phones and service plans, but Seven Seas still waits for adapters that are inserted into phones so customers can use digital service in buildings and other places where satellite service is problematic. The lack of adapters is indicative of Iridium's struggle all along, from the handset delays to a revised pricing/marketing strategy that, according to many critics, came woefully too late. Ironically, Iridium's new CEO says the company was "miles" too early, launching service before all the pieces were in place. Iridium, mired in negotiations with banks and lenders to head off bankruptcy, expects the price changes will help pull itself out of oblivion. CEO John Richardson last week said the hope is to gain 300,000 to 400,000 subscribers by year's end, but he admits that's a "wish." As of last quarter, the satellite service provider served only 10,294 subscribers. Analyst Tim O'Neil of Soundview Technology predicts the company might reach 90,000 total subscribers by year-end. Iridium's dire financial situation, puts it in a catch-22 situation where it can't acquire enough subscribers because potential corporate customers want to see more stable financing yet lenders want to see more subscribers before they dole out more money. The company has until Aug. 15 to meet a bond payment, and it continues negotiations with various creditors. Richardson said he was encouraged after talks with Motorola's top executives; Motorola is an 18 percent owner in Iridium and original instigator of the venture. Iridium's price cuts didn't appear to change a lot of opinions about its immediate future. Iridium's stock was up to $10 last week after hitting a 52-week low of $4.96. The upsurge may have been a result of a short squeeze, whereby a sharp increase in a stock occurs after short sellers rush to cover themselves, O'Neil said. For its part, Seven Seas always has targeted the types of oil and gas, mining and other industries Iridium is now focusing on. The reseller wants to offer Iridium's service alongside Oceancell and Inmarsat satellite services because Iridium's 66-satellite system will provide service, for example, in northern Alaska for oil and gas customers where Inmarsat can't reach, said Seven Seas Marketing Communications Director Patti Aston. "It really rounds out the whole service offering." Since it lowered Iridium service costs from a high of $7 per minute to as low as $1.59 per minute, "we have seen a very positive response," she said. "We're seeing movement with it." All Iridium needs is a lot more movement like that, on a lot more fronts. \| Home Page \| Site Map \| Search Archive \| PowerSearch \| \| International \| Wireless Web Sites \| Hot Stories \| Please send comments and suggestions on this Web site to wwweb@cahners.com Wireless Week, P.O. Box 266008, Highlands Ranch, CO 80163-6008 Voice: 303-470-4800, Fax: 303-470-4892 Published by Cahners Business Information © Copyright 1999. All rights reserved.