Motorola Prepares to Decommission Iridium Network

Motorola, the primary backer of bankrupt satellite venture Iridium LLC, is in the process of drawing up a schedule to decommission Iridium's 66 LEO (low-earth orbit) satellites, a Motorola spokesman confirmed Thursday.

"There is no time frame for when we'll finalize decommissioning," Motorola spokesman Scott Wyman said. A bankruptcy court in March gave Motorola permission to decommission the Iridium satellite network, he added. Since March, Motorola has had to spend several millions of U.S. dollars every month to maintain the network, Wyman said.

He wouldn't be drawn on the decommissioning process itself, which observers believe will likely involve the Iridium satellites being left to burn up in the Earth's atmosphere. The process could take up to two years, according to observers. Motorola is already in talks with a number of parties about the decommissioning process and the schedule for carrying out the destruction of the satellites, including government agencies, Wyman said.

As of Thursday 5 p.m. Pacific Standard Time, one of Iridium's 10 gateway companies, Iridium North America, will unhook from the service that currently interconnects the satellite network with the PSTN (public switched telephone network), according to information from the company posted on Motorola's Web site. This means that anyone calling from a landline phone to a Iridium satellite phone or vice versa won't be able to complete their call, although calls placed between two Iridium phones will still go through, Iridium North America said. Iridium North America is a separate company from Motorola.

"However, please be aware that any and all remaining Iridium service could end at ANY TIME -- WITHOUT ANY ADVANCE NOTICE," the Iridium North America statement to its users read. "Again, if you have not already done so, we urge you to make immediate arrangements for alternative communications or move to a location where alternative communications are available." The final nail in Iridium's coffin, which reportedly had debts in the order of US$4.4 billion, was seeing its latest possible white knight pull out of plans to acquire the satellite communications company's assets. Late last month, New York merchant bank Castle Harlan Inc. announced that it wasn't going to go ahead with its intended purchase of Iridium's assets, concluding it was "economically inadvisable" to proceed with the acquisition. [See "Castle Harlan Halts Iridium Acquisition," July 18.]A bankruptcy court hearing due Wednesday requested by Castle Harlan as a cut-off point for the court receiving any competing bids was therefore canceled.

Iridium has been in search of a buyer ever since the company filed for bankruptcy protection in August of last year after defaulting on two loans.

Since that time, more than 30 parties have expressed interest publicly or privately in purchasing Iridium, according to Wyman. Currently, Motorola isn't in conversation with any company about acquiring Iridium, he added.

In March of this year, Iridium told the U.S. Bankruptcy Court for the Southern District of New York that a buyer for its operations couldn't be found and that Motorola would shut down Iridium's satellite service. [See "UPDATE - Iridium to Cut Service Tonight," March 17.]Since March, although Iridium effectively ceased commercial operations, Motorola has continued to offer a limited Iridium service run by a skeleton staff. Along with Iridium North America, two other Iridium gateways are believed to be still up and running, one in Europe and one in the Middle East and Africa.

Iridium never managed to attract customers in sufficient numbers, only amassing over 50,000 customers since it first begun operations. Motorola currently estimates that there are 5,000 Iridium subscribers. Iridium tried to offer its satellite communications as an alternative to cellular telecommunications, a plan that failed due to overpricing of its service and troubles with the Iridium handsets, according to analysts.

Iridium, in Washington, D.C., can be reached at http://www.iridium.com/.

Motorola, based in Schaumburg, Illinois, can be contacted at +1-847-576-5000 or at http://www.mot.com/.

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