Global satellite telephony provider Iridium will be working with its creditors to restructure the $US800 million credit agreement it has with its banks, having failed to reach subscriber and revenue targets for its first trading quarter.
The targets were set at 52,000 subscribers, $US4 million in cash and $US30 million in accrued revenue by the end of March. Iridium would not confirm how many subscribers it has, saying only that numbers are "likely to fall short of target figures". Industry analysts suggest less than 20,000 people worldwide have signed up.
The delay in subscriber growth, Iridium says, has been due to distribution problems, including shortages of phones, pagers and trained sales channels. Demand for the product, Iridium says, is still strong. The company expected a 2% to 3% penetration of the Australian and New Zealand market within two years.