New Iridium comes out swinging

Iridium, having been given a new lease of life, announced it is planning an

aggressive marketing campaign to sell millions of available minutes of wireless

communication time available from its constellation of 66 satellites.

The company’s new owners, Iridium Satellite LLC, building on the $72

million contract awarded by the Pentagon, said they will market airtime on the

system for around $1.50 per minute to customers in the aviation and maritime

services, oil and gas, mining, heavy construction, forestry and emergency

services. That compares to the previous rate of $3-$7 per minute, which doomed

Iridium’s first attempt at becoming a major wireless service provider.

Iridium also said it will offer bulk discount rates to customers in China,

Russia, India and elsewhere in the developing world. "We don't have a

shortage of airtime to wholesale at extremely competitive rates," said Dan

Colussy, chairman of the Iridium Satellite, an investor group, which is trying

to save iridium from becoming the most expensive high-tech business fiasco of

all time.

"We're going to be a niche company," said Colussy who added that

besides discussion with customers in Russia, China and India, Iridium is talking

with service providers in Southeast Asia, the Middle East, Latin America and

Africa. The latter is considered a big potential market since it was second only

to North America in use of the original Iridium.

Meanwhile, the US Defense Department and other government agencies will be

using Iridium for secure point-to-point encrypted data transmission. The

Pentagon will get unlimited airtime access for up to 20,000 users for $3 million

a month. Colussy said similar packages for mixed civilian-military use might be

negotiated with other governments.

Analysts said the new operation has a real chance of success. It purchased

the entire $6 billion constellation for a scant $25 million and is not burdened

by any debt. "You can see the tremendous change in fundamentals,"

Colussy said, adding that the company now plans to add 12 more satellites by

March 2002.