WASHINGTON -- It’s like a scene from the cult classic The Night of the Living Dead.
Iridium, the bankrupt, cash-strapped satellite telephone company that has been left for dead, may get a new lease on life.
"There are some qualified investors who are in [a] dialog with the banks," said Ronald Taylor, vice president of Motorola Space Systems, when asked if there was any truth to the rumors that cellular-phone pioneer Craig McCaw may come to the company’s rescue.
In March, the maverick entrepreneur and his investment group backed out of a $600 million plan to resuscitate Iridium. They decided instead to throw their weight behind ICO Global Communications, which is expected to emerge from Chapter 11 bankruptcy on May 15.
McCaw is expected to combine ICO with his Bellevue, Washington-based Teledesic to create a satellite system that can transmit voice and data to both fixed and mobile communication devices.
Teledesic spokesman Roger Nyhus denied this week that McCaw, et al. are once again smitten with Iridium. "It’s a done deal. We’re through with it," he said.
The 66 satellites that allow users to make phone calls from anywhere in the world are still in orbit, Taylor said to reporters while on a panel here discussing finance and market issues of aerospace companies.
Taylor begged off further details about who these potential buyers may be.
Iridium was hatched in 1998 with grandiose plans and plenty of cash from industry heavyweight Motorola, which holds an 18-percent stake in the company.
But complaints about exorbitant prices -- about $3,000 per phone and up to $6 a minute for calls -- dogged the company. Consumers also found the brick-size phones awkward to use. Iridium responded by slashing prices last summer, but it was too late. Consumers were already lost to other new rivals, such as Loral Space & Communications’ Globalstar.
By August 1999, the company was rife with debt and filed for bankruptcy. What followed was a string of failed attempts by several suitors to save it from its demise.
Last summer was a tough time for the mobile satellite-services sector. In addition to Iridium, ICO Global Communications found itself short of cash and ended up in bankruptcy court.
This meltdown has put pressure on the industry to keep the company from going down in history as one of the biggest high-tech fiascoes of the 20th century.
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