NEW IRIDIUM READY TO ATTACK GLOBAL MARKET
Rising from ashes, new owners of Iridium will begin offering “cheaper, more reliable, pole-to-pole service” Fri. In interview between sessions at Satellite 2001, CEO Dan Colussy, Exec. Vp Dannie Stamp, Chief Marketing Officer Ginger Washburn and Chief Technology Officer Mark Adams met with Communications Daily to push merits of new system and management of revamped company. Iridium Satellite LLC bought more than $5.5 billion of assets of now defunct Iridium company, including low-orbiting satellite network, from U.S. Bankruptcy Court in N.Y. Dec. for $25 million. New owners immediately signed 2-year, $72 million deal with Dept. of Defense and revamped business plan with strong concentration on maritime, oil, aviation, gas, mining, construction, forestry, military and govt. markets. Stamp said “truly mobile, truly global” voice services would be available through 66-satellite network and Tempe, Ariz., gateway to land-based networks.
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Colussy, who has streamlined staff and cut operational costs, believes Iridium is “poised for success” after finding formula that will cut costs per min. to $1.50 from $7 per min. New phones will retail for less than $1,000, down from $3,495 for old models. Adams said service providers will set pricing with no additional roaming or long distance charges. Operating expenses are about $7 million per month, about 10% of old company’s. “Iridium is positioned strongly for commercial success,” he said. New business plan has sharply reduced break-even point, Colussy said: “We're very pleased we've been able to roll out this system and stay on schedule.”
New company has signed nonexclusive deals with 13 service providers to market services worldwide. Washburn said there already was backlog of orders and Motorola “can’t make the phones fast enough.” Company wouldn’t provide any numbers, but Adams said there were orders for “tens of thousands” of phones. Estimated 22,000 Iridium phones are already in marketplace and most of those users will keep service as well, Adams said. Still under best-case scenario, company will use only 50% of its call- routing capacity in next 7 years, Colussy said, giving company tremendous room to grow. Sales have been “much stronger than I expected,” Washburn said. “Motorola is really struggling to keep pace and get phones out the door,” Stamp said.
Iridium plans to offer bulk deals on air time with Africa, China, India and Russia to take advantage of “all the minutes that are going to waste,” Colussy said. Service providers in remote areas of those countries will be able to resell min. Iridium is negotiating with China for sale of hundreds of thousands of min. for domestic use, Colussy said. Through deal with DoD, company will pick up 20,000 govt. subscribers and another 2 U.S. govt. agencies are discussing possible deal with company, Colussy said. He also said Iridium would launch commercial and individual service later. In addition, Colussy said minority stakeholders in venture Herb Wilkins and Tyrone Brown are starting new World Telephone Co. div. to provide service in African sub-Sahara that possibly will be backed by World Bank. “They plan to take it country by country.”