Checkout The Latest Story About Motorola Grounding Iridium Satellite Phone Release
Iridium, the satellite phone industry, has been working hard to re-invent itself following its 1999 bankruptcy. Last September it returned towards the stock marketplace through a reverse takeover, and has set about raising cash for a brand new fleet of low-earth orbiting satellites.
In the 1990s Iridium launched with the idea of promoting satphones to a broad user market, but was quickly overtaken through the mobile telephone industry. It became chiefly a niche provider of phones to aid workers and the military.
Now, Matt Desch, chief executive, believes there might be a big new marketplace to become exploited in monitoring all sorts of objects, from trucks and also cargo containers to polar bears, by satellite mobile phone .
Iridium was hopeful of getting backing for the $2.7bn project from either the US or French export credit agency
Now there is really a snag. One-time parent company Motorola, which spun out Iridium in 1998, is suing the organization for "at least $24.68m", related to old loan agreements in between the two businesses. More worryingly, Motorola could terminate crucial intellectual property licences for Iridium, which would make it not possible for the industry to run its satellite system.
Without having usable IP, there won't be much point in building or launching the satellites, even if the cash can be raised. Iridium says it's still in talks with Motorola to resolve the concern, however the case could well end up in court.
If this leads to delays, its terrible news. Iridium's current satellites are not getting any younger - they have to be modified in the next four years or so - and other competitors such as Inmarsat, Orbcomm and Globalstar are preparing rival services.
Iridium shares, which debuted at almost $10 have now lost around 30 per cent of their value.
The Motorola issue demonstrates once again the dangers of the space business. In orbit, the satellites are at danger of colliding with space junk - one Iridium satellite was taken out just last year when it crashed with a defunct Russian satellite . About the ground, it risks becoming hit by the legal debris of its previous financial collapse.
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Satellite phones have repeatedly proven themselves invaluable to emergency responders, business continuity managers and planners and others who need reliable communications in places where no other systems exist.