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To: djane who wrote (4226)	4/27/1999 4:49:00 AM
From: djane	Respond to of 29987

No Immediate Solution for Troubled Iridium By Vanessa Clark 26 April 1999 Iridium LLC remained tight-lipped at the announcement of its first quarter results today, refusing to disclose any detailed business strategy designed to improve sales and revenue. The company, which saw its chief executive leave on Friday, announced revenues of $1,451,000 and a loss of $505 million for the first quarter ending 31 March. As of then, it had approximately 10,294 customers Ed Staiano, Iridium's chief executive and vice chairman quit on Friday after sales growth missed forecasts and the company's shares plunged. "Now as we move into an era of marketing and financing, basically the board felt that new blood was needed at the top," Robert Kenzio, Iridium's chairman, told the International Herald Tribune. Iridium's chief financial officer, Roy Grant, quit last month and the company announced today that Mauro Sentinelli, executive vice president of marketing, will not have his contract renewed when it expires at the end of May. Speaking on behalf of John Richardson, interim ceo, who is set to take up his position this afternoon, Leo Mondale, senior vice president of strategic planning, said that as the company is in the process of rethinking its business plan as part of its negotiations with its bankers to renegotiate its terms by the end of May, he could not reveal any details until the plans were finalized. He did say the company would focus on sales and marketing training to "get people to understand what it is [they] have," and "spread what works worldwide." He said that current "usuage patterns are not indicative of long-term patterns" as users are still evaluating and testing the service. Alarmingly, the company revealed that it has very little knowledge about the demographics of existing subscribers since it only has indirect relationships with its customers through regional service providers. These are typically jealous of their ownershop of subscribers, said Mondale. Iridium will be looking into post-sales successes and failures and work with its regional gateways and service providers "to get a handle on what works and what doesn't," said Mondale. Mondale avoided making any sales or subscription predictions for the rest of the year, saying "things take longer than you think they will." He hinted at the rethinking of pricing and handsets but said there were no concrete plans yet. "We are not announcing new products though, as we believe the present are sell-able," he said. Motorola has just launced the full range of accessories for its phones, and Kyocera's phones have fianlly come on the market after software problems. Referring to satellite outages earlier last quarter when one of Iridiums 66 GEO satellites had to be replaced, Mondale said the company is "pleased with the overall integrity of the system...performance has been good." Meanwhile, the U.K.'s Financial Times reported that Iridium faces further upheaval after shareholders filed a lawsuit against it, citing a writ filed at the District Court of Columbia. The suit alleges that Iridium executives failed to alert investors to difficulties with the satellite system and the possible adverse effects this would have on subscribers and revenue, the newspaper said. Iridium's 10,294 customers consist of 7,188 satellite-homed voice customers, 1,031 cellular-homed voice customers and 2,075 satellite paging customers. Iridium's financiers had set it targets of at least $4 million in revenue, at least $30 million in accrued revenue and at least 52,000 subscribers by May 31. Related Stories CEO's Shock Departure Batters Iridium Again © EMAP Media 1999