While questions remain about the survival of Iridium's mobile communications satellite system, competitor Globalstar has arranged a further $500 million credit facility. This brings to $3.8 billion the amount raised to set up the system.
Initial Globalstar commercial services will start in September, with 32 operational satellites and nine ground-based "gateways". By the end of the year, there will be 48 satellites in orbit, with four spares. The 22 remaining gateways will start operating during the first half of next year.
Iridium, meanwhile, has until 15 August to renegotiate its $800 million bank loans, after slashing the price of its handsets and calls in a bid to attract further investment. The company has halved the cost of buying and using its satellite-based mobile telephone system. In the USA, the handset price has been reduced from $3,000 to less than $1,500 and call costs cut to $1.59/min in a bid to stimulate demand. Service providers worldwide are following suit.
The move follows Iridium's failure to meet subscriber targets set by investors.
Meanwhile, market analysts are concerned about the third major market entrant, ICO Global Communications, which is preparing to launch its first satellite this summer on a Proton K booster.
ICO has fallen $93 million short of its target of raising $500 million from shareholders by June, and has extended its discounted share offer. The company has raised $3 billion of the $4.7 billion required to deploy and operate its 10-satellite medium earth orbit system.
Source: Flight International
