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To: djane who wrote (4221)	4/27/1999 3:55:00 AM
From: djane	Read Replies (1) \| Respond to of 29987

WashPost. Iridium Reports Larger Loss. Pioneering D.C. Telecom Firm Misses Target for Subscribers By John Schwartz Washington Post Staff Writer Tuesday, April 27, 1999; Page E03 Iridium LLC, the company that pioneered hand-held, easy-to-use satellite phones, announced a larger first-quarter loss than analysts had expected. Iridium also acknowledged that it had signed up only a fraction of the customers it had hoped to have by now. Iridium reported a net loss of $505.4 million ($3.45 a share), compared with a $203.6 million loss a year earlier. According to First Call, analysts had anticipated a first-quarter loss of $3.17 a share. The company reported first-quarter revenue of $1.45 billion. A year earlier, it was a start-up, with no revenue. "We were very disappointed with our first-quarter customer and revenue numbers," John A. Richardson, the company's interim chief executive, said in a statement. While Iridium has built a network "that is providing high-quality service to our customers," he said, "clearly, we have a great deal of work to do to improve our marketing, distribution and sales activities all over the world." The company also announced yesterday that its executive vice president of marketing and distribution, Mauro Sentinelli, would leave the company after his contract expires this month. This comes on the heels of the resignation last Thursday of Iridium's chief executive, Edward F. Staiano. The company's chief financial officer, Roy T. Grant, quit in March amid strained relations with bankers. Late last month the company secured a 60-day waiver from its bankers to meet some of the terms on its $800 million line of credit, including a target of 27,000 subscribers and cumulative revenue of $30 million. Iridium, which generated worldwide headlines in 1990 when it announced ambitious plans to ring the world with 77 telecommunications satellites -- later scaled back to 66 -- has so far signed up only 10,294 subscribers for its service. The company said it was "hindered" in its attempt to draw customers by problems in manufacturing its distinctive brick-sized handsets and by other "distribution and importation issues," including an inability to field a properly trained and equipped sales force. Analysts had hoped that Iridium would be able to boast of 100,000 customers by the beginning of this year, and Staiano has said the company needs 500,000 customers to break even. Wall Street, which has grown accustomed to bad news from Iridium in recent months, took yesterday's loss in stride, with the company's stock, which trades under the name Iridium World Communications Ltd., closing at $16.37 1/2, up 37 1/2 cents on the Nasdaq Stock Market. Although the company's phones are far more portable and easier to use than conventional satellite telephones, they do not compare favorably to cellular telephones. They can be fitted with cards that allow them access to local networks, but are heavier than standard cell phones. "What the company tried to do was go after a market that they thought would be easy to penetrate -- but in fact, it's very difficult," said Timothy O'Neil, an analyst with SoundView Technology Group. As most business travelers go to regions of the globe that have some cellular service, O'Neil said, Iridium has to focus on those potential customers who really do roam the world -- including workers in aeronautical, maritime and mining fields. For everyone else, O'Neil said, the company should stress its other strength: the convenience of having one phone and pager with a single monthly bill around the world. © Copyright 1999 The Washington Post Company