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Iridium Files for Bankruptcy 102

Posted by Roblimo from the great-ideas-gone-bad dept.
MadShark writes "I found this article on Excite about Iridium LLC filing for bankruptcy after defaulting on 1.5 billion dollars in loans. But don't be too hasty about throwing out that handset. The article also says, "Motorola said it would continue full operational support for Iridium and all current and future subscribers during the company's reorganization. It said it would continue to invest in the technology and to develop the next generation of Iridium products."
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Iridium Files for Bankruptcy More

Iridium Files for Bankruptcy

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  • Iridium uses sat based switching. Globarstar uses all ground based switching.
  • Okay, all INTERNATIONAL CALLS must be switched on the ground.. how about that.

    Meaning the Telco's couldn't let someone call from USA to England over sat without making a long distance. And the switching capabilities are't very good.

    Also, no Sat to Sat switching either.
  • What happens after that? Do they burn up or something? An occasional Iridium flare is neat, but I don't want to live in a world where the night sky is littered with @#$*! Iridium satellites.

    End of life for this class of satellite is not when it re-enters, but when the expected reliability of the electronics, battery, and solar array fall below a certain desired level. Typically, some amount of propellant is reserved to do a deorbit burn to take the satellite out of its position, and cause it to fall back into the atmosphere and burn up over a long (25 years?) period.

  • The main problem Iridium has now is that they have to change their marketing strategy. This is going to take time. By the time they even start to break even, not considering paying the loans they have, they are going to have to launch new satellites. These LEOs only have about a 5 year lifespan. So if they can turn this company around they will run out of time because of the satellite lifespan.
  • Actually, Iridium does satellite to satellite switching. Globalstar does ground switching. Both systems have pros and cons. The advantage of switching on the ground is that you keep the satelites simpler==less expensive and have fewer regulatory problems. The con is more ground station and more exposure to weather outages due to the ground station placement.
    --
  • I did a job a while back for Inmarsat. Inmarsat are lucky - they have geostationary satellites, which are a patently good idea because they stay where you put them, so to speak. Of course there is almost no room for geostatic satellites left but hey...

    GEO sats have drawbacks too. Most importantly, it takes a fsck-load of propellant to get out there.

    So, you have hundreds of high speed satellites wizzing around requiring a load of fuel to keep on track. (And when the fuel runs out, the satellite is dead and needs replacing)

    A GEO satellite requires an order of magnitude or two more propellant than a Low Earth Orbit Sat. Frequency of replacement of the satellite is driven less by running out of fuel than by the life of the electronics. Also, GEO satellites do _not_ just "stay put". The amount of fuel needed to keep a GEO sat from drifting across the sky is incredibly higher than that needed by a LEO sat to stay on track.

    Another point - GEO satellites require the largest launch vehicles to get up there. LEO sats can be launched on just about anything, and in a constellation like this one, several sats can be launched by a single launch vehicle.

    And if a single one goes wrong, the chances of it colliding with another are remarkably high, thus wiping out the whole lot in that orbit. (Well, risiking doing so...)

    Hmm... FUD. While it is within the realm of possibility, and certainly taken into account during the design, these things are spaced so far apart that collision just isn't going to be that much of a danger.

    Some issues you didn't mention that I find to be much bigger... Unlike GEO, these sats are up near the radiation belts (which is why electronics life is the limiting factor for the system.) And simply _producing_ the quantity of satellites these constellations need is a logistical trick that aerospace companies are not used to. And a constellation of hundreds of satellites are really, really expensive.

    Like anything else in life, there's trades. GEO sats are good for some applications, LEO constellations good for others. Personally, I wonder if constellation systems can provide all that much more than ground based systems. That said, I do think things like Iridium are cool, and I hope some of the follow-on systems have a chance to get off the ground. I'm sure there's a niche to be found someplace, and the idea of being telecommute from anywhere in the world (i.e., travel the globe without ever taking a day off work) is just too cool. ;-)

  • Most likely because the State Department made them disable coverage over Cuba.
  • The idea is cool... so cool that they would probably outlaw vacations (as in "day off"). Be careful what you wish for...
  • According to legend handed down during Motorola brain... er... training, the idea for Iridium came from some VPs wife who couldn't use her cell phone to make a phone call in the Carribean. The VP came up with this concept for a cellular phone that would work anywhere in the world.

    10 years, billions of dollars later...

    An engineer in the group I work in took an Iridium phone with him to the Carribean a few months ago to try it out. He tried to make a phone call... it didn't work.



  • 'j' is what engineers use when we mean sqrt(-1). 'I' and 'i' are used for current so using 'i' for sqrt(-1) would make electrical engineering equations impossible read since imaginary numbers are used all the time in electrical analysis. Other engineers also use j to mean sqrt(-1) because the same techniques and equations that are applied to electrical engineering can be applied to other systems so it's nice to keep things consistent.
    --
  • I did a job a while back for Inmarsat. Inmarsat are lucky - they have geostationary satellites, which are a patently good idea because they stay where you put them, so to speak. Of course there is almost no room for geostatic satellites left but hey...

    When anyone in the inmarsat offices mentioned iridium everyone burst out giggling. Low Earth Orbit is a JOKE. Do you have any idea how FAST those things have to go to stay up at such a low altitude? And because the go so fast they are only overhead for a short length of time, so you need so damn many. So, you have hundreds of high speed satellites wizzing around requiring a load of fuel to keep on track. (And when the fuel runs out, the satellite is dead and needs replacing)

    And if a single one goes wrong, the chances of it colliding with another are remarkably high, thus wiping out the whole lot in that orbit. (Well, risiking doing so...)

    It's a joke. And of course since a given satellite is overhead for so little time, the swignalling is far more complex, requiring all the land stations to be more failure prone blah blah blah.

    Sure, Inmarsat have bugger all bandwidth left, but at least you can get a signal from pretty much anywhere but the poles.
  • So you make your sound card say "one" and "zero" and the computer on the other end of the phone line uses voice recognition to rebuild the data stream.

    Once you have that working you set up a constellation where 64 different words represent various combination of bit sequences so you send several bits per word...

  • what Iridium was expecting. Their prices were insane, it was wayt too expensive to just make a phone call, how many people trek through the Himalayas and take a phone with them? Isn't the point of going out in the wilderness to get away from civilization? They should have user a smaller constellation of higher altitude satillites, similar to the US military MILSTAR satillites. With higher altitude they could have a longer lifetime (15-20+ years) and have a wider coverage area. The idea was sound in a way, but they really should have done alot of marketing in smaller developing nations where a decent telephony infrastructure doesn't exist but is needed. They could have also sold their services to airline companies that could benefit from a global communication system, that way their planes could more readily get accurate weather information. That would have made them more money than trying to sell to wealthy american travelers wanting to call home to check on their stock broker and maid.
  • funny.. but there is no truth to that at all. Iridium used launch sites all over the world.. including former USSR, China, and the US.
    The majority of the space vehicles were launched from the US.
  • iridium satellites go from horizon to horizon in about 12 minutes. Your call is handed off to the next one in the constellation. It's worked great for me. The inmarsat phones need to be quite a bit bigger and heavier to reach the geosync. orbit. The iridium phones, especially the kyocera satellite phones are really quite compact and convienient to carry around.
  • so, Iridium's busted.. and Motorola continues to carry the torch for them... if Motorola's this "in" with Iridium, why didn't they just take over Iridium, and save them the disgrace of filing for bankruptcy?
  • There do not appear to currently be any Iridium Modems.

    There are serious technical problems with using a analog modem over a satelite telephone link. The compression and noise supression algorithms assume a voice call (certain frequencies, relatively long pauses between words). Using a regular analog modem would never work well and might not work at all. They could, however, develop a digital modem to directly interface with the digital satellite link but the bit rates would never be that high.

    It probably makes sense for data customers to wait for the Teledesic system which is optimized for data traffic.
    --
  • I've been really captivated by this whole thing. Watching a company go down in a spectacular ball of flames is kind of neat.

    When I first heard about Iridium, I had a bad feeling. Guess I should have given the investors a clue. :)

  • hmmmm. (Score:1)

    by jafac ( 1449 )
    Maybe asking people to pay exorbitant amounts for brain cancer wasn't such a good business model anyway.

    I say they should ditch the satellites one by one over major US cities on New Years Eve for a truly spectacular fireworks display.

    "The number of suckers born each minute doubles every 18 months."
    -jafac's law
  • Let me get this straight...

    Iridium needs a cheap launch, so...

    Motorola decides to launch in China, so...

    China can't get their booster to work, so...

    After heavy DNC contributions, the Vice President signs a waiver authorizing limited missile tech to China, so...

    Iridium sats are launched, but...

    China uses the same tech to create the "Long March", so...

    they announce first-strike capability against the U.S., so...

    Clinton does nothing, so...

    now they can nuke us, and we did it all so that Iridium sats could launch, and now...

    THEY'RE BANKRUPT?

    That's fantastic. We've given our most probable major enemy first-strike capability just so the DNC can afford to re-elect Gore, and the company that paid everyone off can't even bother to stick around and provide decent service.


    Aw, heck.

  • Now there's a real outstanding debt... Reminds me of wizards in Discworld that always knew when they were going to die: 'they died happily drinking the last of their winecellar and incidentally owing quite large sums of money'
  • When you have stockholders, investing a couple billion dollars in a risky venture is quite hard to sneak past them. So spinning it off to another company and getting people to invest in it to spread the risk is a good idea. It was quite a cool idea, but I think it just got overtaken by the internet, GSM roaming (thats 1900 PCS for you US guys), ever cheapening international call rates, and the competition (GlobalStar and someone else?) nuked them. I think this was all discussed here last time it came up: 1/ the satellites are only good for 5 years and so they have to replace the first one in another year or two. 2/ the satellites don't have much data bandwidth 3/ its (still) damned expensive compared to picking up a prepaid phone for $100 and using that. Certainly the International Space Station wouldn't be built by a public company, and thats got a similar type of risk (lots of maintenance, potential for big explosions). Bruce
  • Does anyone know if they would have gone bankrupt on their own or did the whole "we must be able to listen in and know where you are so no play for you" govt force them to go bankrupt? It would be really embarrassing for our allegedly pro-business govt forced them to go under (especially as that law was borderline useless since the kidz will all encrypt one day anyway). You have to admit tho, sending 3zillion satellites into space is pretty ballsy :! Maybe they could sue the govt *ponder*?

    -avi
  • Just because they're 'in' with Iridium does not mean they want to take the fall for them. 1.5 billion is a lot of money, even for a giant like Motorola. Everyone knew Iridium was going to default on this loan. Here's [suntimes.com] a good article from the Chicago Sun-Times today about Motorola and Iridium and why Motorola is still positive despite huge financial losses. Motorola still thinks technology for the sake of technology will pay off in the end. -Rich
  • They went bankrupt because they didn't get enough customers. The service was aimed at world business travellers but early phones didn't work in cities or buildings so they were only useful in truly remote locations like oil platforms and the like. New phones use local cellular service if available.

    The other problem is that they do not have complete worldwide coverage because they bypass local phone monopolies and thus had difficulty getting regulatory approval in all areas.
    --
  • Knowing some people who have looked into data over Satellite phones..

    Iridium is capable of something like 4800 bps. There is an amazing amount of compression of the data that it's pretty poor when it comes to transmitting data.

    A few of the other competitors have data options on their phones... but Iridium/Motorola apparently ignored that need.

  • If they end up going into bankruptcy somebody will get those sattelites for a song. It might be possible for some company to offer the service at a reasonable price if they don't have that huge debt to pay off.

  • I think the whole idea of the low orbit satellites for communications is a good idea, but they should have planned ahead for this sort of thing. They can't expect everyone to drop their current cell phones and pick up an iridium one (assuming you can even find one at this point). If I recall, they're supposed to have 288 satellites to be accessible anywhere on earth, and they don't have nearly that many right now. While it's a lot more expensive than cellular, most people will opt for the much cheaper option. I think they planned on being ready and in full swing by 2003 (without getting much in the way of revenues in), so I guess the question is... it's only 1999, what happened?
  • Actually, Iridium failed purely because of bad business logistics. Iridium provides a way of using one cell phone anywhere in the world, regardless of whether or not you're near a cell base station. However, there has been such a boom in the cellular service industry that even many third world countries have cell base stations. Iridium didn't provide a market demanded service. It's sort of nice that you can connect through a satellite, but certainly not necessary-- or cost effective. I heard the first Iridium phones sold for $3000.

    If Iridium had launched five years ago, maybe the technology need would have been there, but the cost would have been even more prohibitive. Iridium is living proof that hype doesn't pay the bills.

    Incidently, they had 20,000 subscribers, and needed 1,000,000 to break even.

    -Ted
  • i believe your thinking of teledesic(sp?) [big bills entry]. Iridium intially was slated to have like 80 some and then reduced it to 77. And if i remeber correctly Iridium went "live" a few months ago. I dont think LEO satalite fones are ever going to be big, land based cellular is just too pervasive. Hell some place (SE asia) have better cellular coverage than wire based phones! The /only/ place satallite coverage has an advantage is at sea, and i just dont see that much demand. Not to mention that those phones are just about pushing the safe limits on transmitting power (before they start to produce REAL health problems)
    --
  • The data option isn't really available yet. They are holding out for faster speeds.

  • If they end up going into bankruptcy somebody will get those sattelites for a song. It might be possible for some company to offer the service at a reasonable price if they don't have that huge debt to pay off.

    The reason they're filing for bankruptcy is because they've gotten less than 10% of their planned number of subscribers. The reasons for this are varied, but they include greater competition from PCS and cellular phones, and the fact that the phones haven't been working well indoors.

  • I've heard that too. One of the long term problems with Iridium was that they would have to incur large amounts of debt every five years because they would have to launch a whole new set of satellites.

    The service would never have gotten cheaper over time (by much at least) because the operational costs for the system are beyond belief.

  • Wow man, major highschool math class frustrated teacher flashback there. Thanks :-)
  • The Long March rocket predates Iridium by quite a bit.

  • Disgrace? This is 1999 no disgrace. The other thing is Motorola owns alot of Iridiums debt. I think more then the stock they own in Iridium. Rumour has it they have been buying more of Iridiums debt in the market. They have also been pushing a plan to refiance the company. Most [all?] of the debt gets converted into equity. The current shareholders get basically zero. Maybe a little more but I wouldn't bet on it. Motorola is no worse off. Iridium has a much lower debt load. Everybody but the shareholders gets something.
  • One of the good things, maybe the only one, to come out of Iridium, is assembly-line snap-together (no joke!) satellites. There is no reason satellites have to be very clean, it's not like space bacteria are going to grow on them. I would not be surprised, therefore, that a satellite was sitting in a fairly normal lab space. I think Teledesic hired Moto to build their birds.
  • While this would work, it would be remarkably expensive and slow. It would never be faster than a digital modem with a direct connection to the link which I suspect would max out at 4800-9600 bps.
    --
  • The Long March rocket predates Iridium by quite a bit.

    True enough. Anybody can build a big rocket. Guidance is the issue... and they didn't have that, until our future President, *shudder*, handed the guidance tech over.


    Now they've got it. Iridium boosts fine... and so do MIRVs.


  • Iridium used launch sites all over the world.. including former USSR, China, and the US.

    The fact that China was not the only launch site does not eliminate the fact that China was a launch site. So it's not funny... and there is truth to it.

  • This just goes to prove that great ideas and big corporate backers do not always work out. Keep that in mind the next time you invest in a company.

  • Hmm...maybe a Motorola spinoff? Could it have been a plot from day one?

    The main problem I see with that is that if they have to replace the satellites in a year or two, it doesn't seem like that would give them enough of a jump...

  • There's a couple other companies who offer this sort of service (all of whom are on shaky fiscal ground) but they can't use the same sattelites for technical reasons. Not to mention no one wants to continue maintenance when the estimated cost of yearly maintenance will be US $1billion.

    -Rich
  • they went bankrupt because nobody can figure out how or where to buy one of their phones.
  • Damn, they're continuing .. I was hoping to buy a couple of them satellites for $20 on ebay or something ;-)

    Hey can I borrow one of the Iridium credit-cards? they have $1.5bln debt, they won't notice if I add a couple $100K extra, I would like to buy some computer gear :-) Not to mention a Jaguar XP8

    oh well..
  • Your mistake: exp(j*x)=cos(x)+j*sin(x)

    so...

    -2*exp(j*PI) =
    -2*(cos(PI) + j*sin(PI)) =
    -2*(-1 + j*0) =
    2

    So it was his two cents, and you fail Math.
  • In this context, I wouldn't even go so far as to say it was a good idea. In fact, I would probably characterize it as a very, very bad idea.

    The market simply was never there to recoup such a large investment. Who want's to pay those prices (and carry such a big bulky thing around) to talk anywhere in the world?

    Well, the answer to that is, aparently, 20,000 people. :/
  • Actually, I read (on www.theregister.com) a few weeks ago how the US Government had BAILED OUT the Iridium Network by purchasing a large number of accounts. It was reported that this was being done to keep the network solvent. This leads me to believe that the US Government didn't just approve of Iridium, they wanted to give it any help they could to keep it alive.
  • I had a buddy who worked for Motorola when the whole thing was dreamed up. It was called Iridium because the number of satellites was equal to the atomic number of Iridium. Cute huh?

    Except to shave costs they cut the planned number of satellites. My friend checked his CRC and found that the number was equal to the atomic number of the element dysprocium. "Dysprocium" is Greek for "Unable to Talk" (I am not making this up).
  • No kidding...

    hopefully he's not one of the idiots that
    believe 0.9999... (repeating infinitely)
    and 1 are two different numbers

    zero point nine bar equals one
  • What happens after that? Do they burn up or something? An occasional Iridium flare is neat, but I don't want to live in a world where the night sky is littered with @#$*! Iridium satellites.
  • The problem was where you said in your message that "you think."

    You don't think. You react.

    The government sunk a sizeable amount of money into keeping the Iridium network alive.

    Your ignorant post has prompted me to go look up the URL on theregister.com (hardly a lapdog of the US government).

    US government Props Up Iridium [theregister.co.uk]
    posted 20/7/99 4:22 pm
    excerpt:

    The US government continued its attempt to prop up troubled satellite-based cellphone company Iridium, yesterday. The Department of State signed a $1.4 million cheque for 1000 Motorola-made Iridium handsets.

    The US government is rather keen on Iridium -- it bought another huge pile of phones back in June. It has its own gateway into the network, and according to the release issued about yesterday's purchase, "other US government agencies" plan to make use of it.

  • As people have mentioned, the Operations and Maintanence on this constellation is going to cost quite a bit (to say the least). However, if you think about it, this is a system that the Department of Defense may want, and they'll get it for a song. Whether or not you like that...

    Phones not working well indoors is by design.

    Sure MOT got most of the Iridium money, but much of it was money spent buying parts or doing development, so all they get is a bunch of legacy code. And the experience of negotiating a few launch contracts.

    2 year lifetime is something that I don't really buy; they're probably saying that to make sure they don't get sued if their satellites went down too fast. Of course, there are lots of things that can fail on satellites, so you can never be sure.

    Those of you who hope that Teledesic will be nice, fast, sanely priced, and well designed, remember who's the prime contractor =)
  • I think the possibility of global, untracable (FBI Suit, "Yeah, the call is coming from the eastern
    hemisphere") communications scared the crap out of our own (US) gov'

    Hard to trace, perhaps, but VERY easy to tap. Just point an antenna at every satellite and you've got 'em all. What signal goes up must come down - at least while all the handsets are on the planet's surface. Tapping regular cellular, meanwhle, needs a receiver in each cell of interest unless you can tap the network feeding the base stations.

    And you might be able to get some location info from the satellites, too.

  • For what they're trying to charge, that shouldn't be a problem

    Generic Man
  • Iridium was a flawed concept anyhow. First, all switching had to be done on the GROUND. Doh! Lots of ground stations.

    Secondly, what kind of bandwidth did they offer? Atlease they could have offered the ability to have 128Kb/s. They had the chance. I talked to severel moto guys back when they were testing Iridium over South Africa. They said, Who in the world would want bandwidth??

    The only one I have much hope for is Teledesic (Admittidly funded in part by BillG).. They will offer a T1 anywhere.

    Let em burn. Dummies.
    pan
  • "Well my 2i cents" would be my 2 imaginary cents. So 2j would be "my 2 (real) cents" FWIW.

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