Iridium Saved?

Ekeron writes: "Spaceflightnow.com reports that: 'The U.S. Bankruptcy Court for the Southern District of New York today approved the bid of Iridium Satellite LLC to purchase the operating assets of Iridium LLC and its subsidiaries. Iridium Satellite LLC will continue to provide commercial satellite communications to the U.S. Government and plans to re-launch affordable satellite communications services to those industry segments that have a particular need for satellite communications (government, military, humanitarian, heavy industry, maritime, aviation, adventure) within 60 days.' Get the full story at: Spaceflightnow."

Comments

Makes sense

[crow]

The original Iridium business model failed because they couldn't recoup their investment (pay back the debt) in the satellites.

Now that they are bankrupt, it only makes sense that someone would pick them up for next to nothing. Now the new company doesn't have the debt overhead from launching all those satellites. This means that they only have to maintain operational break-even to stay alive. They don't have to pay the interest on their debt.

Of course, this only works until the satellites run out of fuel (they have to periodically adjust their orbits or go down in flames). Then they have to start launching replacement satellites. However, if they can build up enough of a user base before then, they might be able to pull it off. (And the replacement satellites could provide all sorts of additional capabilities.)

Re:saved, or scavenged?

[11223]

What intellectaul property? The stuff in the Iridium system (like the rather, erhm, distinctive vocoder) is all 10 years old. It's old, and it's creaky. The satellite system is really the only reason they want it.

Intellectual property also might refer to their software for running the system, which is quite necessary.

Put Mir in the Off-Again column

[Cy Guy]

Russia's cabinet just approved plan to crash Mir into the Pacific in February, 2001.

Mir should be a bit more eventful than de-orbiting Iridium satellites since "Much of the giant spacecraft will burn up on re-entry into the Earth's atmosphere before most of the remainder ditches into the sea. Officials have said that parts of the craft could hit land."

Re:Space Junk

[jafac]

worse still, I've read that astronomers HATE Irridium, because these satellites are exceptionally bright, and have this flaring behavior, which has been known to put a damper on observation.

Put a stake in it!

[wowbagger]

How many times must we stake this undead beast?

I mean, here I am, I've come up with a means to provide global telephone coverage (the description of which is to large to fit into this margin), so how can I deploy my monopo^H^H^H^H^Hcompetitive service with this sword of Damocles over my head?

Somebody call the Slayer....

Re:Theres only one thing left to do...

[Pink Daisy]

Sounds good to me. Someone got venture capital to give me to start this thing?

My business plan is to shoot down crazy satellites one by one with a "laser". I'll hire a bunch of Anonymous Cowards to build it, then launch it into space.

If it works especially well, I'll start shooting down normal satellites one by one, also, and if I ever get to shooting down satellites owned by companies that make money, I'll demand ransom before shooting them down, and maybe you can get some return on your investment.

Iridium down in flames - NOT

[ackthpt]

I never believed for a second that these satellites would be brought down. My bet was all we've heard and read up to now was an effort to shake creditors (they're worthless, can't be used for anything else, too expensive to maintain, etc.) I'm betting they get the assets cheap enough that Iridium will be turning a tidy profit on a more realistic set of goals.

--

Re:Iridium down in flames - NOT

[phil reed]

Sure. Turn a tidy profit, if you don't have to pay for the launch of 66 satellites. It's the early investors that get to eat the up-front costs.


...phil

Usual claptrap about Iridium and their marketing

[Johnny Grep]

You're right, Iridium didn't focus on the right market segment for this service. They went with the whole nine yards, in fact. They needed to focus on ONE segment, then get on another one. Sounds like Motorola to me, heh. (Don't try to understand that one, I was a cellular dealer for a while, and it's somewhat of a running joke in the business.)

One of their problems: VERY expensive equipment (but they do come in fancy trapezoidal boxes with a neat holographic design), and frankly, if Iridium had come up with better marketing and maybe a little bit better support from other companies in the industry (for example, Globalstar has Qualcomm, Ericsson and some other manufacturer to support them) they might have been fine.

The other problem with Iridium was their high pricing for service. Believe me, 150CDN$/mo (?) for 2 sat zones of paging coverage with VoiceNet (PageNet's voicemail/dispatch service) is a lot of dough. 4 zones would cover North America including Alaska, if I recall correctly. I can get that type of service with PageMart (now Weblink Wireless in the USA, Bell Mobility in Canada) for a bit less. Don't quote me on that price though, it's been long since I got my last Iridium bill.

Space Junk

[brianvan]

It's nice that people want to save Iridium... and Mir too, for that matter... but...

This is kind of a pack rat mentality with satellites, don't you think?

I mean, I see all these Slashdotters who don't want to see all these satellites end up in the Pacific Ocean somewhere, but can we actually think of a good use for any of these things? Probably not. Mir is/was useful, but it's old, slightly dangerous, and about to become obsolete by the ISS (or any other future projects like it). On the other hand, Iridium was practically useful to almost no-one, although their sale now indicates that someone thought of something it could do...

And it does have a substantial cost to government/commercial agencies to keep track of and control these things in orbit. "Sentimental value" means pretty much nothing to taxpayers and stockholders...

But... more importantly... we have to realize the concept of sunk costs, and we must make practical decisions for the future... that is, do we spend money keeping these satellites up, or do we use that money for better satellites down the line?

In this particular case, it would have been interesting to see Iridium make it as a company. But if they didn't, and we had to de-orbit the satellites, why boo-hoo about it? It's a responsible decision. And no one's going to be operating a ham-radio network or something like that off of all those very expensive satellites, so unless someone's got a great use for them, why bother?

The upside is that we get to see more Iridium Flares... (if someone remembers what I'm talking about, there's a website for it, but I forgot the link...)

Re:Space Junk

[brianvan]

Oh, I have no doubt of the possible uses of the Iridium constellation/network. I was just saying that none of them were particuarly practical, even though it would do the world some good to keep the satellites up for some of those purposes. (which it looks like will happen)

Also, the cost of launching such satellites from square one is always a consideration when deciding whether or not to use an existing constellation, but you also have to think that satellites are not very versatile to begin with - they're designed to fit their purpose, and usually don't come with a lot of extras. I was quite surprised, for example, that the bandwidth coming off of the Iridium satellites was rather paltry (something like 9.6 kbps) when, perhaps, if they could handle 300kbps channels instead, Iridium could have been a portable broadband contender. Retrofitting satellites for increased capacity, however, is not an option... it's at least far cheaper (and possible) to just launch another bunch of satellites.

And, I think it's better to put money in the bank for a future constellation of cheaper, higher bandwidth (T3 speeds to anywhere!) satellites rather than spend it all just keeping track of and maintaining an existing, somewhat unuseful network.

Of course, in this case, the satellites are cheap anyway: the reason why Iridium is defunct as a business is that they couldn't make enough money to keep up with their massive debt payments. So, now they're bankrupt, and their creditors (the satellite builders and launchers) get paid virtually nothing - which in the end, means that the satellites now cost almost nothing to build and launch, for whoever wants them. I might be exaggerating the cost of maintaining the constellation - that part might be actually very cheap, hence cash burn wouldn't be a problem for anyone who gets the assets but not the debt. :)

Re:Space Junk

[Galvatron]

When most of the money spent on a satillite is spent simply on getting it into orbit, the mentality becomes understandable. Depending on how much it as sold for (presumably not much, given that bankrupcy sales are generally pretty cheap), the new firm very well may be able to make money, as it doesn't have the startup cost of launching scores of satallites.

Another Fedex?

[Baldrson]

People who invested in the creation of Federal Express lost that money for the most part. It's an unfortunate fact that pioneers have an enormous mortality rate.

Iridium could go on to be as successful as Federal Express -- it just didn't meet early expectations and while that isn't death for business in the long run, it is highly damaging for the early participants.

Of Course Iridium Will Be Saved...

[LHOOQtius_ov_Borg]

Nobody likes the idea of a bunch of unused satellites... Government and industry groups will keep trying to find ways to prop-up an Iridium company because they want all those satellites...

The government never has enough satellites, really, maybe this is the first reverse pork: government somehow conned industry into pissing away a whole lot of money on something for them for a change ;->

But seriously, I think the original Iridium tried to move too quickly into too broad of a market. They frittered away a lot of money on ads and PR to people who had no use for the stuff, and didn't concentrate on a smaller, specialist market that could actually use the system.

The military likes to subcontract to commercial providers, and will probably be happy to have unsecure comms moved off their proprietary network. Humanitarian? Most groups have no money, but the UN does... So do shipping companies, and constant contact with your vessels (whatever they may be) can cut costs drastically by allowing for more precise dynamic rerouting of whatever your cargo is through your system. The adventure industry is also quite wealthy - hey, I bet Survivor III producers will sign up immediately ;-)

You and I may not need this service, but some people do, and maybe Motorola, in addition to lack of focus, just put the wrong people on selling it...

oh yeah.

[Docrates]

riiiiight, and Mir was going to be saved by MirCorp... unless space exploration/exploitation starts getting some real commercial sense, and stops the sentimentalism, we're stuck to the ground except for the selected few.

sure i know people will start telling me how it's cheaper to use iridium satellites than to launch new ones, and to those i say: research! why do you think it didn't work in the first place?, they're technically flawed and too expensive to maintain. yes on a 5-8 year plan, it's chepaer to launch new equipment.

NOTICE: ARTICLE LINKS WRONG!

[mindslip]

Dear Slashdot users:

Please note that we have linked the article "Iridium Saved?" in error. It should go to:

At Last, Mir to be Ditched

In fact, Mir has yet again been saved, and Iridium has once again been ditched.

Slashdot apologizes for continuously reporting the news before happens on these two issues.

I wonder who those bankers are...

[spellcheckur]

It absolutely baffles me who would finance this buyout. Unless they have some magic powers, or some secret agenda, they should be in for a ride.

In early 1999, I visited Motorola and spoke to some of their engineers. One of them laughingly referred to the Iridium (or "Satellite Series Phone") division as the place where "old engineers go to die." I didn't exactly understand what he meant until I actually used the equipment.

Don't get me wrong, it's a great idea, I, personally, believe there is some (albeit limited) market for direct-to-satellite communication, but it's only as good as the implementation. Has anyone else actually used iridium? It's miserable!

Besides being big and clunky, there are fundamental problems that haven't been addressed.

• Satellite handoff is still shaky; in areas where as little as 10% of the sky is occluded (the world ain't flat... most of you have hills or buildings blocking some part of the sky), you can miss handoff. Some of the pass times for the satellites are about 2 minutes... I had a phone at my disposal for about six weeks, and it was rare that I was able to make a call longer than 30seconds. Usually I'd get through "I'm using Iridium, so if I get cut off..."
• It seems the handset designers failed to build in any multipath rejection. Even when the signal quality was high, calls routinely had an echo or ended up garbled. I'm no expert on the topic, but one of my friends who designs GPS equipment says that MPR is pretty-much a straightforward process that was clearly ignored.
• Service is subject to the hiccups of the "local" telephone service. For political reasons, Iridium put one terrestrial downlink on each continent. As part of their licensing agreements with all of the countries, calls have to be routed through the nearest downlink. Calls go up, they come right back down. I was in the Himalaya and my calls went up and down... to India! More than once, disturbances of the land lines in India blacked out central Asia for hours on end.
• Iridium won't do data, at least not well. Each sattellite connection has a maximum of 2400 baud... and only if you route through the US downlink (which, if you were paying attention, means that you have to be in North America). Once upon a time, a long time ago, the Mot engineers were trying to build a data module to allow multiple connections and load balancing, but I don't think it ever materialized.

And the economic challenges:

• Globalstar, a competitor is on the verge of closing its doors from lack of clients. How does dividing a client base of essentially zero generate revenue?
• Back when Iridium first declared bankruptcy, the original loaning institutions feared that they may have to pay more to deorbit the satellites. It sent the debt price for Iridium LLC to nothing. Not only did investors go to $#!^, the banks were now liable for the costs of keeping the birds up or bringing them down. Whoever bought it must have assumed those liabilities...
• The constellation reqires maintenence. Even if they don't have any (or much) initial cost left to recoup, the satellites have a 5-15 year lifespan. Starting in about 2003, they're going to have to start replacing birds if they have any chance of maintaining service.

It seems to me that Iridiums "assets" are inferior, expensive equipment, with a limited lifespan and big price tag. What do they have of real value? Military contracts and communication licenses with almost every nation. The real question: do those assets offset the liability assumed by the constellation. It will be interesting to see what Iridium Satellite LLC will do with the contracts.

Keep watching /. My bet is that we see another "Iridium Crashes" headline soon.

On another note, the (already suffering) Globalstar (GSTRF) didn't change on this news.

Nobody seems to care about this one.

saved, or scavenged?

[1337-p0z3r]

From the article:

1. Under the agreement, Iridium Satellite LLC will purchase all of the existing assets of Iridium LLC, including the satellite constellation, the terrestrial network, Iridium real property and intellectual property owned by Iridium LLC.

I've heard that despite costing billions, Iridium was disposable because of the tens of billions of dollars in related technology that was developed alongside of it, which basically paid for the experiment many times over. Investement recouped, next project please. No problem.

But is that going to happen again? Does Iridium Satellite LLC really want to use the system, or are they only able to get at the wonderful intellectual property through buying the whole damned thing? Is Iridium Satellite small enough that it can find profit where others thought it wasn't to be found before?

I'm kinda glad that they're staying up.. although it would have made some excellent viewing, watching each satellite plunge through the atmosphere...

"There's a party," she said,
"We'll sing and we'll dance,
It's come as you are."

If at first you don't succeed.... fail again

[MosesJones]

So their target groups are

The Goverment... who already own loads of their own sats.

Humanitarian Groups, who just have LOADS of spare cash... not.

and a few others.

Am I the only one who thinks that the fact that the humble mobile (GSM) will work over a goodly proportion of the globe and is cheap and reliable is quite an effective way for those that require such communication to get it. Put up a few more cells in a country and you shut out the need for a very very expensive satellite.

What will the satellite offer... 100% coverage. And how many organisations need that, bugger all. And for the cases where they are out of touch with mobile will they use the sat solution everywhere else as well as just the out of touch places... probably not.

And boo.com is back as well.

Are we seeing another period in economics, there was boom and bust, now we have stupidity and sanity cycles.

Re:If at first you don't succeed.... fail again

[SEWilco]

I was also amused to see the "industry segments" humanitarian and adventure. I know what they mean, but it echoes a few extra times in my semantic network.

dammit! I wanted to tape the fireworks!

[omenoracle]

Good for them! Although, you know it would have been impressive to watch them burn up in atmosphere on the way back down. Of course this still leaves the question of what do you do with a satallite phone that is too big and too expensive for mere mortals to use.......well at least I'll know my tax dollars are being spent on something that's cool. ehhh.....no.

Mir-ridium

[peter303]

Maybe they could combine the Mir and Iridium space projects somehow to save them. Both are on-again off-again to be crashed into the sea.

This is getting old...

[gTsiros]

...one day it is saved, then it is scheduled for destruction, then it is saved again, then it is ...blahblah...

i am beginning to think that all this story exists only too keep some balance in the worldwide economy policy of taking advatage and things. like, a drain or something.

did you know that lots of (edible) food is thrown away while it could very well be given to the poor? think the rest yourself

Iridum Saved, News at 11!

[Greyfox]

Really, Iridum's been saved more times now than the Internet's been in danger of collapsing. Come on. Iridum won't be news again until it's been safely bought or safely in the pacific ocean.

Maybe they can drop Iridum and Mir at the same time, and the specific combination of space fungii they've accumulated can get together and breed and form a new breed of earth-eating space fungus. That would be an amusing end to an anoying couple of stories...

This just in, folks...

[Dannon]

We have just learned that our earlier projection of Irididium going to 'crash and burn' may have been premature. Latest reports indicate that 'salvation' may indeed be holding a slight lead. Therefore, we at Slashdot News Network are moving Iridium back into the 'too close to call' category. Once again, Iridium is 'too close to call'.
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