While the bankruptcies of Iridium L.L.C. and ICO Global Communications have cast doubt on the mobile satellite services market, fixed satellite services provider Teledesic L.L.C. believes it may find a way to benefit from these difficulties.
Teledesic is wireless visionary Craig McCaw’s idea for an “Internet in the sky,” a satellite-based global broadband network not expected to offer service before 2004.
But the company said it is examining possibilities that may allow it to launch service sooner by taking advantage of Iridium’s and ICO’s plights.
“Teledesic has decided to explore a variety of early-entry opportunities,” said Bill Owens, Teledesic’s co-chief executive officer. “We believe these new opportunities may enable Teledesic to more quickly establish a leadership position in the satellite communications marketplace while also generating early revenue.”
The company did not specifically mention Iridium or ICO, but Owens made reference to struggles experienced in the satellite industry.
“Despite current conditions in the satellite communications market, Teledesic is in an enviable position,” he said. “We have money in the bank. We have the time necessary to evaluate opportunities created by the unfortunate difficulties of others.”
The company has raised $1.5 billion in private financing to date, and is backed by the big names of McCaw and Microsoft Corp. Chairman Bill Gates. Also listed as an investor is Motorola Inc., which has the largest exposure to the faltering Iridium and may be leveraging its contractor relationship with Teledesic to lessen its financial risk.
“We remain fully committed to Teledesic’s vision of delivering global, broadband communications, but we believe it is prudent for us to continue the review of our proposed system with Motorola,” Owens said.
It is unclear what opportunities the Iridium and ICO bankruptcies might provide Teledesic. Both low-earth-orbit satellite companies built or are in the process of building narrowband voice networks. Teledesic requires a lot more bandwidth and spectrum than the existing constellations can provide.
Analysts speaking on background said they can’t see what opportunities a narrowband satellite system can provide a broadband data system. Short of uploading new software into the satellites themselves, there is no way to alter the satellites once they have been launched and placed in orbit.
Neither Teledesic nor Motorola are commenting on exactly what potential opportunities exist as a result of the recent bankruptcies, nor are Iridium and ICO.
In other Iridium news, Japanese Iridium investor and carrier DDI Corp. and Iridium handset provider Kyocera Corp. reportedly plan to contribute $46 million to the Iridium restructuring effort.
