Motorola Hangs Up On Iridium Customers

Motorola Inc. has warned customers of its faltering Iridium LLC satellite telephone system to expect a probable shutdown of the system after Mar. 17, the deadline by which the unit's $3 million of emergency interim funding is scheduled to expire. Motorola has provided those customers with contact numbers for competing satellite telecom operators. Motorola, which owns 18% of Iridium and which operates and maintains the beleaguered company's satellite telephone service under contract, issued its warning to Iridium's customers in a news release posted on its corporate Web site Mar. 6, the same day that Judge Cornelius Blackshear of the U.S. Bankruptcy Court for the Southern District of New York allowed Iridium to draw $3 million of cash collateral in order to continue operations through Mar. 17, while it tried to find a buyer or investor to put up additional funds. Iridium, which promised customers global wireless services, has been a major flop for Chicago-based Motorola. Cost and cumbersome equipment are two of many factors that kept customers away, according to reports. Iridium entered Chapter 11 on Aug. 13, 1999, groaning under a $4 billion debt load, including nearly $1.5 billion of defaulted high yield bonds.

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