Reviving Iridium

Resurrecting Iridium Contd...

In December 2000, Iridium Satellite got the much needed boost when the US Department of Defense (DoD), awarded a $72 million contract to the company for providing satellite communications services for the next two years. By the end of March 2001, Iridium Satellite had re-launched its commercial services.

The company also incorporated certain technological improvements in the satellites and handsets, which improved quality of voice and equipment performance.

The company's research showed that each satellite could function well for around seven years. Since many of these satellites had already been in orbit for 2-3 years before the launch of the service to customers, they had only 4-5 years of satellite life left.

However, with the above improvements, the company ensured longer life for its satellite constellation. In late 2001, Iridium Satellite also changed the design of its handsets.

The company launched handsets weighing less than 400 grams that were as light and small as regular cellular phones. The cost of calls had also become cheaper than that of calls made on GSM mobile phones. Iridium charged a flat rate of $1.50/minute to call any other phone in the world, without any constraint on the duration of the call made.

Reportedly, Iridium also claimed to have attained the status of being able to provide 100% global coverage. The company also took steps to enhance its customer service and support by setting up 24/7-customer support call centers.

This improved its acceptance in the market and enhanced its goodwill. With all these favorable developments, it seemed that Iridium was resurrected and was on the road to success. The company had come a long way into becoming the most advanced telephone and paging service till date.

Exhibits

Exhibit I: Players in the MSS Market
Exhibit II: Iridium's Satellite System Configuration

Case Details

Case Code : BSTR031
Themes: Turnaround Strategy
Case Length : 11 Pages
Period : 1999-2001
Organization : Iridium LLC
Pub Date : 2002
Teaching Note : Available
Countries : USA
Industry : Telecommunication

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